Quite the contrary in my experience, capitalism typically restrains innovation. Patent trolls are just one of many examples.

Not saying I've got a better idea than capitalism, but I wouldn't consider it ideal.

It may be a factor on slow improvement, but true innovation comes from the passionate minds of geniuses.

This is only the case when you have something to fear from superior competition. That is the capitalist system. Even in the FOSS world, which is largely affected by capitalism the spirit of sharing and collective advancement is incredibly common.

because capitalism.

isn't that the spirit of open source? Yep IS IT.

Well certainly, but in this case the motivation is anticompetitive.

FOSS? The source code isn't the issue here. Qualcomm isn't allowing Google to distribute their proprietary binaries.

the ones that buy Qualcomm chips off the black market?

Hell yeah! If I'm shipping 10M units to my 5 favorite customers, and my documentation comes in Engineer form, I don't want to waste my time writing up 20K pages of documentation (which is about how much it takes) so that hobbyists can buy the chips and then demand support, 5 units at a time.