>1) Reforms on how damages are calculated. If you neither sell a product nor license IP to third parties, there is no way you're losing any revenue from an infringement. You should not be awarded even "reasonable royalty" damages if you wouldn't have received any royalties in any case.

What stops them just publishing a sham product whose sole purpose is to be for sale while infringing the patent and then show a few licenses to a couple of fishing buddies?

The real trouble with how damages are calculated for software patents is that there is no good way to determine the degree to which the patent was integral to the success of the product, and juries have had a tendency to grossly overestimate their value. Witness Apple v. Samsung.

I imagine your typical smart phone infringes probably twenty or thirty thousand software patents. Even if you assume that every penny of the device's price is attributable solely to patents (and nothing for, say, manufacturing, shipping or advertising), and the device "only" infringes 10,000 patents, the average value of one of those patents against the sale of ten million $500 devices would be $500,000. Which would hardly be even worth litigating over, given that the lawyers cost more than that. But there is no real way to prove that any given patent subscribes to the averages, and plaintiffs will naturally argue that their patent is worth more than all the other patents, and the jury who finds for them on infringement is predisposed to agree on damages as well. So we get billion dollar awards that should be sub-million dollar awards and the trolls get fully funded to buy more radiological weapons and lobby hard for their own continued existence.

>A lot of troll litigation could be shut down quickly if patent infringement functioned similarly to copyright infringement in requiring direct copying.

What standard could you use to prove that? Correct me if I'm wrong, but if I recall copyright is "similarity and access" and for published works "access" is kind of a formality (because everybody has access), which is why the degree of similarity requires a significant amount of specificity. I don't imagine you could find anyone to argue that Chrome infringes the copyright on Firefox as a result of their similarity.

But that's not going to cut it with patents. The intent of drafting a patent claim is to make it as broad as possible while still getting it through the patent office. Any non-mandatory specificity is the enemy. The only way you could give defendants any hope of actually proving that they didn't copy a patent under a standard like that would be to crank the level of specificity required in patent claims up to the point where you'll just have reinvented copyright and called it a patent.

Which is kind of the issue. Copyright works really well for software. The implementation is the hard part, and that is the part that copyright covers. Patents just don't work at all -- because there are so many ways to implement something in software that the only way a third party would ever actually infringe a software patent is to allow it to be so broad that it covers the problem itself rather than any specific solution to it (e.g. shopping cart patents), or covers any implementation that applies the mathematical formula that describes the optimized result for a specific problem dictated by information theory (e.g. encoding or encryption patents).