First and foremost, I do think we need a mechanism to protect inventions. Something that will make sure the inventor reaps just rewards for creativity and utility of his work. In part, current patent system does afford such protections, but in a lot of cases it does seem excessive, plus, there may be benefit in achieving similar goals in a different manner.
One such way would be some kind of open licensing, where the inventor retains the authorship, but grants free use of the invention to all comers provided they do not wrap it into some invention of their own which is then patented under different, more restrictive terms. Think about what FOSS, CC, GPL, and similar do for copyright, but for inventions not software (which luckily is still not patentable).
The other way would be to retain essentially the system in use today, with royalties, and suchlike. In this case, however, I would propose a few changes mostly aimed at preventing patent trolling, and similar practices.
For one, it may make sense to shorten the duration of patent protection for different fields of endeavour. I don't necessarily think all the current durations are excessive (unlike for copyright, where they are ridiculously excessive), but making sure they're not overly long should encourage people to actually use their inventions. Which is where my second point, and the main one really, comes in...
Right now, there are too many individuals and companies sitting on patent portfolios of various sizes, doing precisely nothing with them but looking for others who may "infringe" so they can milk them for royalties. I understand, agree, and support, that it shouldn't be allowed for just anyone to freely enrich themselves using other people's inventions. However, if you do not care to actually use your invention for something useful yourself - not even to sell the rights to it to someone who would - then I believe that you should be stripped of your patent rights altogether, and your invention moved into public domain. It is, of course, not always possible to start cashing in on your invention straight away, but some reasonable time frame can surely be figured out after which it becomes obvious that you just can't be bothered, rather than justifiably hindered. In any case, if you see yourself struggling for too long, you should always have an option to sell your rights to someone who could.
One objection could be that if sold close to expiry, patent protection could be seen as too short by the buying party. I think this can be addressed by resetting the clock on such a sale - making sure of course that the clock is reset only in cases where the patent has never been put into production before that point. It would also be necessary to prevent the buyer from immediately, or at least easily, using the patent to go after an alleged infringer. For example, it could be made a condition of such sales that, as part of due diligence, any potential infringement is researched by both the seller and the buyer, and sale possibly prevented, or at least delayed, if any are uncovered - being considered that the original owner should have looked after his right better. It may also make sense to limit the number of times an unused patent can change hands, either by limiting the number of sales, or progressively shortening the protection time frame after each subsequent sale. This is important, as otherwise it could become possible to extend a patent's validity indefinitely - something not even possible in the current regime.
I am sure that the above is full of all sorts of holes, but then I am not a lawyer - of any kind, especially not a patent one. However, I am also sure that changes along those, or similar lines, and in particular the ones that would prevent people sitting on unused patents, are both necessary, and beneficial. Otherwise, we will continue seeing "inventors" suing world+dog over stale patents for technologies they may have envisioned themselves, but for all their cleverness and resources couldn't find a way to turn into cash for years, if not decades. And that will, surely, be a good thing.