Chances are that Amazon will get a bunch of lawyers and engineers together to figure out if they are actually violating the patent then (if so) how to circumvent it without disabling KSO. They will also be prepared to challenge the validity of the patent.

On the issue of patent reform, it is needed but it must be done carefully. A use it or lose it rule isn't as simple as it may sound and denying the right of patent holders to sell patents is also detrimental. As an example, what would you do if you were a startup that could not afford to bring a product to market. The inability to sell it to a larger firm means that your patent has no value. Or maybe you're in the same position, so you're trying to license the patent to a bigger firm. Depending upon the nature of the patent, there may be a limited number of companies to negotiate with and they may just stonewall negotiations until the use it or lose it period has passed.

The system definitely needs to be reformed, but replacing one set of rules with another set of rules is likely to create a system where you're replacing one set of abuses with another set of abuses. After all, people get creative when dollar signs creep into their eyes.