My 2c. I think patents are good. the way i see it is that it actually aids innovation, but not necessarily for the big players. without patents, few people would see any value in developing new ideas as the new ideas would just be taken by the big players, pushing the innovators out of business. eventually innovators will move their attention to new avenues that allow them some form of protection for their efforts in new and more profitable markets. that leaves only big players in the market and they will hamper innovation themselves, as that would be the best business (and most profitable) case.
this is the case here, these guys were way advanced, 8 or more years ago, they realised the way forward. it had to be a sound case for a patent to be awarded in the first place. so I think they have every right to sue. They obviously invested time and intellect into the design and should be rewarded for such.
i think just because its not tangible, we shouldn't see it as not valuable. and valuable items should be afforded some form of protection, ie. patents
If MS knew about the design they should have collaborated with the inventors. If they honestly did not now about such a design, and came up with it on their own (8 years too late), they need to pay their dues, as the design is already owned.
This is all assuming the company has the legal rights to the design ofcourse.