The soundbite is

If people had understood how patents would be granted when most of today's ideas were invented, and had taken out patents, the industry would be at a complete standstill today.

The memo is interesting besides the mention of patents. In 1991 Microsoft did not yet totally dominate desktop software. Much of the memo is taken up by discussion of the various kinds of infighting among the big software vendors - the relationship to IBM, Adobe's superiority in printing (this was back when printing was a difficulty) and so on. One of the worries back then was patents. Microsoft didn't own the desktop space yet, so the Microsoft outlook on patents was patents as threat not patents as opportunity. Now obviously the roles are reversed as is Microsoft's position on patents. No surprises there and one of the reasons to be wary of software patents.
In 1991 BillG recommended this memo on the particular problems for patents related to software.
Some of the problems listed are historical artifacts (e.g. poor patent database search facilities), but some still apply. I stress the objection related to the innovative proces described by Clayton Christensen. It's given a slightly different spin here:

In Software, Independent Reinvention Is Commonplace

A patent is an absolute monopoly; everyone is forbidden to use the patented process, even those who reinvent it independently. This policy implicitly assumes that inventions are rare and precious, since only in those circumstances is it beneficial.
The field of software is one of constant reinvention; as some people say, programmers throw away more "inventions" each week than other people develop in a year. And the comparative ease of designing large software systems makes it easy for many people to do work in the field. A programmer solves many problems in developing each program. These solutions are likely to be reinvented frequently as other programmers tackle similar problems.
The prevalence of independent reinvention negates the usual purpose of patents. Patents are intended to encourage inventions and, above all, the disclosure of inventions. If a technique will be reinvented frequently, there is no need to encourage more people to invent it; since some of the developers will choose to publish it (if publication is merited), there is no point in encouraging a particular inventor to publish it--not at the cost of inhibiting use of the technique.