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If you have a patent, you MUST have a product or be working on a product using the technology in question or you cannot litigate others using your idea.

That doesn't help in the case where non-innovative patents are used in an anti-competitive manner. Such as the patents Apple is asserting against HTC.

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Sure, it may not help in THAT case but it would help with people hoarding patents for the sole purpose of suing others. There isn't going to be a single solution that solves the patent problem. It will be a combination of rules like 1) you must have a product on the market using the patent 2) no business method patents 3) software patents are limited to 2-3 years etc etc

The problem with "must have product in the market" is the same as with the idea of fixing the domain name system by adding a requirement of "use it or lose it".

Who gets to decide what "having a product in the market" means?

It's impossible to generalize this to an objective set of rules. Thus we'd soon be back on square 1 (read: in the court room).

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