"Both products (iPhone, iPod touch) utilize PowerVR MBX Lite systems..."

So you sue Apple instead? I'm not trying to sound like an idiot, but if Apple is using something from PowerVR, who is responsible here?

A patent holder with a valid beef can go after anyone utilizing the technology without permission: vendors, clients, middlemen, etc.

I suspect Apple's purchase agreement with them thoroughly protects Apple from such claims. I'm guessing worst that happens is that PowerVR takes a mandatory license and we continue to enjoy ever-improved versions of iPhone and iTouch.

did either Alliance Semi or their current "holding company"(probably just a bunch of lawyers mining lawsuit-worthy patents) ever actually produce or truly intend to produce products using this technology. Smells like someone had the idea to patent something, just let others do the hard work of development/tooling/production, and once the final products became a hit they just swooped in and cried foul. US civil law is so jacked-up.

"The technology initially was patented by Alliance Semiconductor, although it was eventually sold to a holding company."

Patent law is intended to protect innovation. i.e. to make sure a small inventor will get properly recognized and remunerated for inventing something. When a patent is held by a holding company, what innovation is being protected?

"Shared Memory Graphics was formed just last month and received rights to both patents."

Received rights to an undefended patent? I think they should be suing the holding company for selling them a useless piece of paper.

Patent law is intended to protect innovation. i.e. to make sure a small inventor will get properly recognized and remunerated for inventing something. When a patent is held by a holding company, what innovation is being protected?

So, you want different rules for patents, depending on who owns it? And who determines whether the company that owns it is a holding company, or just has not been able to get production going, or an individual who developed it, or what?

If Apple gets a patent on a design/idea, but hasn't done anything with it, and MS goes off, steals the concept, and produces a product, you'd be fine with this, since Apple never actually tried to produce it?

The problem with patents in the US isn't the holding companies, or the people 'coming up with ideas' and waiting for others to develop them.

The biggest problem is the USPTO accepting overly broad, generic, vague, and downright laughable patent applications without apparently any idea what is actually being patented.

Received rights to an undefended patent? I think they should be suing the holding company for selling them a useless piece of paper.

Um, the holding company did the buying, not the selling. And the paper is useless only if they can't win/settle the suits.

And I wouldn't be surprised to find out the holding company was made up of both lawyers and the previous patent owner. There's money to be made in lawsuits, and this is a way to protect the patent holder from reverse claims (LLC yourself, then go bankrupt if necessary).

From this excerpt:
Despite the availability of each product for years, the filing does not suggest the companies were previously notified of the infringement or provided an opportunity to negotiate privately.

What would be something that would be really, really, really nice to be added to patent law would be having to reveal 'infringement discovery time'. Get proof of when they discovered the infringement, as opposed to letting people infringe until success was made, then suing to get the most money.

But I'm sure they'd just come out with some other loophole, like creating a holding company and claiming they didn't know about the infringement until after the sale took place.

[i]If Apple gets a patent on a design/idea, but hasn't done anything with it, and MS goes off, steals the concept, and produces a product, you'd be fine with this, since Apple never actually tried to produce it?[/i]

Sounds like a good idea to me. A good idea in that the fundamental idea of patents is to allow inventors to profit from developments that benefit the public good. They expire because the people who created the system realized that after some period it is more valuable to the public at large if an idea becomes free. The originator is given a reasonable time to profit from it, then it goes to the greater good. That's why drug patents are shorter, I assume--the greater benefit to the public good is more important with medicine, therefore they are made "free" faster.

If an inventor comes up with something and does nothing to benefit the public good, they're going against the spirit, if not currently the letter, of the law. I'm not saying there's any good way to actually do this with patent law, but I am saying if you did everyone would benefit but the lawyers and a few large companies hoarding ideas to keep them away from competitors.