> Then as between large companies, they all need each others' patents and just end up cross licensing everything. All the effort is for nothing because it just cancels out.
As you explain in the next paragraph, that creates a moat the protects the large companies from the small ones.
They compete against each other but they also collectively defend their own kind.
You're describing another major benefit of eliminating software patents.
Even large companies don't actually benefit from that because their suppliers and companies in complementary markets do the same thing, and you lose any time any of those companies can maintain a moat with which to extract rents out of your own market.
These are deadweight economic losses. They hurt everybody to benefit the company doing them, but even that company is suffering a net loss because of all the companies doing it back to them. Yet they still do it because it's a tragedy of the commons, unless you remove the mechanism that enables it, i.e. software patents.
As you explain in the next paragraph, that creates a moat the protects the large companies from the small ones.
They compete against each other but they also collectively defend their own kind.