OK, I have to declare an interest - I work for a "large American company" and have filed a number of software patents. That probably puts me on the other side of the fence
Anyway, I don't generally agree that software patents are a bad thing. Generally. Patent searches are not very good, and the fact that you have a patent doesn't mean a thing until you enforce it in court, when the prior art search will be much more careful (and quite often successful). There are many example of daft patents - the "progress bar" or "enter key" type - but many of these (or almost all?) would be impossible to enforce, e.g. BT's attempt to enforce a patent on hyperlinks.
Ignoring these, the main use for software patents is defensive. Say another "large American company" notices that my "large American company" has infringed one of their patents. The patent lawyers go off to look in our collection, find something they've infringed (there's always something ... that's why we collect all these patents) and we cross-licence. Happens all the time, and keeps every large software company in the world from fighting every other large software company in the courts all the time. Not such a bad thing. Small companies are different, and tend to get "acquired" by someone bigger in order to settle the dispute - which is usually a Good Thing for the owner and a Bad Thing for the staff, but that's another story.
There's another issue, rare but becoming more common. These are companies who hold patent portfolios but produce no products, so there is nothing to cross licence. These are generally the spurious type of patent, but not always. They wait until they see an infringement, and then sue - sometimes just in the hope of a settlement to avoid a court case, sometimes with a genuine infringement. Microsoft have recently got hit hard by one of these suits, and I expect there are more to come across the industry.
Hell, some software patents are a result of innovation, and the patent is being used for the purpose for which it was intended - to protect the investment in research made by the company. I'd like to think that mine come here
As some light relief after all that...
http://www.theonion.com/onion3311/microsoftpatents.html