Retaliation against the real parties in interest by the victims, destruction of the business reputation of anyone associated with this behavior and the reluctance of anyone else to implicitly condone it by doing business with them, causing outrage in Congress or the courts thereby spurring them to respond by making changes to the law that destroy the market value of a multi-billion dollar patent investment, ...
The first step in this is speaking up and saying, "Hey, this is really obviously wrong".
Part of the reason that the law doesn't have to get every incentive and disincentive right is because there are other mechanisms available.
I'd like to say that I was going to avoid doing business with these parties, but I already wasn't doing business with these parties, at least not to the best of my knoweldge.
This is a possible disincentive, but it doesn't currently exist. Calling public outrage against patent abuse a disincentive is the same as calling changes to the current patent system a disincentive: they don't currently exist.
I'm not sure what you mean by "don't currently exist" -- there is a general consensus that some form of patent reform bill is going to pass in the not too distant future:
By launching the mother of all trolls to the disgust of the industry at large, they're adding fuel to the fire and making it more likely that stronger anti-troll legislation will pass. Certainly you can expect Google to dump several million dollars more into lobbying for it now. But if that legislation passes and decimates the weaponization capacity of the patent arsenal they just paid billions of dollars for, they've just wasted billions of dollars.
Similarly, the general consensus here seems to be that what they're doing is totally unacceptable. Here where we have the people who choose which platforms to develop for, whose choices collectively make or break those platforms. Yesterday if you had a choice between hiring an extra developer to develop a Windows Phone version of your app or using the money to improve or advertise the Android version, you were more likely than you are today to do the thing that benefits Microsoft. Similarly, if you're Samsung or Asustek or Huawei and Microsoft has just loosed the troll upon you, well, good luck trying to negotiate favorable terms for any of them to ship Microsoft technology in any of their products.
And on top of all of that, how can they not expect Google to respond? If you start a war you can expect the other side to return fire. Maybe not in kind (by setting loose their own patent trolling entity), or maybe they will, but one way or another it's not like Google is incapable of striking back. What happens when they throw a billion dollars into WINE and Samba? Or add support for Kerberos, LDAP and Group Policy to the Google API so that companies don't need Windows domain controllers anymore? Doing things like that probably wouldn't move the needle on Google's bottom line, but it would stab Microsoft in the face. Which is what happens when you make enemies.
> By launching the mother of all trolls to the disgust of the industry at large, they're adding fuel to the fire and making it more likely that stronger anti-troll legislation will pass.
As I understand it, this company was formed during the purchase of the Nortel patents, which happened a couple of years ago. Not just right now. The company which was formed from investment of Apple, Microsoft, etc, is not under their direct control anymore. They basically paid a bunch of money to grant themselves immunity from these patents while creating a hazard / barrier to others.
They intentionally put the patents in the hands of a troll. Moreover, since the trolls generally don't have the capital to buy the patents up front, the transfer deals generally involve the selling party getting a large cut of the shakedown money the troll collects from its victims, so it's quite likely that they haven't recovered what they paid for the patents.
The fact that the timing of this happening at the same time as patent reform is on the table wasn't predictable some years ago is just part of the point -- you can't always predict blowback. The risk is part of the cost.
