I first heard this term in regard to a now disallowed practice with regard to patenting, with a far different usage than that detailed above.

The way patent law used to work, you could come up with a patentable idea, have it all sealed and notarized, and then not patent it. Years later, once your "ideas" are in use, you then were able to get a patent and sue the companies using them.

This practice was banned, but not before someone, one Jerome Lemelson, managed to get overly-broad patents on just about all modern technology, which he then used to shakedown big companies like Ford, Intel, Johnson & Johnson, etc. After his death, he passed the patents to a "charitable organization" which used them in the same way but claimed some unspecified amount would go to give scholarships to those pursuing innovative patent law as a career. However, because the United States Constitution prohibits ex post facto law, they are still able to sue with these patents.

Unfortunately, I no longer have the patent in hand, but I recall part of the one that was being used to beat a company over the head went like this (I know this isn't the exact specificaiton):

  1. It is possible to encode numerical data as electric signals and then manipulated.
  2. It is possible to take light, translate it to electric signals and then analyze said image.
Unfortunately, the courts repeatedly allow these patents to stand up, despite their overly-broad specifications. Patents on One-Click shopping and LZW pale in comparison to these patents.