But really, come on guys. This isn't a problem with Capitalism, this is a problem with government getting involved in the free market with something like patents and leaving antiquated laws in place instead of moving to the 21st century.
No, it really is a problem with the basic assumptions of Capitalism. When the highest motivation is greed, the public good falls by the wayside. Government patent law is what it is, but it doesn't force people to game the system in an attempt to obtain unlimited patents which they know they're not supposed to have under that system. People deliberately choose to abuse the system for gain, because that is their highest motivator. Paulson locked the bank execs in a room and told them they weren't leaving until they took federal money -- but everyone in that room knew that wasn't legally enforceable. If those execs had really cared about doing the right thing, they would have stood up and said 'No'. The government could not force them to do anything. But who were they to turn down billions of free dollars at the public expense? They chose to harm the community for their own gain when the opportunity was presented.
Look at LG and Sharp being fined for price fixing LCD monitors recently. Again, the system is abused for gain because ultimately, gain is the only goal they are pursuing. Yes, in a perfect world they would compete as a 'free market' is supposed to do, but why should they? In order to do that, they have to be motivated to do so. Why deliberately reduce their profits when they can simply collude and keep their profits higher?
It is for that reason that 'Capitalism', as a single, solitary governing principle in the economy, does not work. It makes the basic assumption that the producers won't deliberately harm the community for profit, and that is not nor has it ever been the case.
Take the auto industry. A lot of people (not necessarily those here on BuF) like to say that what hurt the Big 3 so much was government regulation about safety standards, emissions standards, and the like. But really, do these people believe the world would be better if they were allowed to go back to their safety standards before government stepped in and forced them not to put their workers in as much danger? Before they were forced to build to a certain level of emissions compliance? Global warming is of course debatable, but the smog hanging over places like LA is not.
Government intervention certainly doesn't help matters. But the basic premise is as flawed as any other system. It is better than most other systems because, in the end, it rewards personal effort. But it also has a sinister side of encouraging anti-social activity because that activity, in the end, is more profitable.