I'm sceptical that patents are an essential part of the ASIC business either. Hardware designs would still be covered by copyright law, so a competitor would still have to reimplement it from scratch. Which is actually more work than doing so for software because hardware languages use a lower level of abstraction, and the design needs to be tested much more thoroughly because you can't fix bugs post-hoc. Also, giant SoCs present a natural barrier to entry to new companies because a new company needs to have all the blocks, not just one or two. There may be a dozen companies trying to make LTE basebands today, but that situation is unsustainable and we are already seeing exits. In short: ASIC innovation would be profitable even without patents. Also, we seem the same kind of behavior in the hw sector: Qualcomm was found to be abusing its patents: https://en.wikipedia.org/wiki/Qualcomm_Inc._v._Broadcom_Corp.