"The market" will only sort this out properly if it is efficient. There's too much uncertainty for that to be the case. Put another way, how is a company supposed to come up with an accurate expected value of suing/defending? There are so many unknown factors that have significant impact on the outcome.
Eventually, once a lot of those unknowns become accurately estimable, then yes the market can solve these problems. But there's a giant cost associated with waiting around for that.
How is that more uncertain than anything in business? How many will my product sell? How fast? What's going to happen to materials prices? What are my competitors going to do?
By that logic the market couldn't work for 98% of products.
Legal action I'd suggest is certainly no harder to predict than that and probably easier.
Patents are anti-freemarket - they are restrictions on what one can actually do to their own property. They are government granted monopolies, that's about as anti-freemarket as you can get.
Eventually, once a lot of those unknowns become accurately estimable, then yes the market can solve these problems. But there's a giant cost associated with waiting around for that.