The clause says you can not enforce any patents, copyrighted works or trademarks that is a part of an AWS service which you have used or are using. The service do not include code which you have brought to it.

In the extreme case that would allow amazon to steal code from customers and put that as a part of a customers currently running services, thus washing away the legal restrictions that copyright, patents and trademarks would otherwise create. I doubt that it would happen in practice since its a bit obvious scheme which would disregard authors intent of using AWS, and judges seems to have a history of following authors intent rather than legal loopholes.

What you're missing is that this is a FUD article.

AWS' terms basically come down to "if you use AWS, you lose the right to patent-troll AWS". The article is trying to spin it as "OH NOES NOW YOU GET TEH VIRAL FROM THE EEEEEEEEEEVIL GPL", though I have no idea on what theory they would base a claim that agreeing not to assert against Amazon and its contractors/vendors would somehow constitute GPL'ing your own code.

I don't think this is right. The terms of the IP non-assert clause say nothing about patent trolling. What the clause says is actually pretty simple: no customer of AWS services can assert a patent claim against Amazon related to an AWS service that the customer used--and that is equally true whether you have a legitimate patent infringement claim, or if you're trolling.

The article's open source point is perhaps a bit tendentious (or underexplained), but, contrary to the impression you convey, it is only a very small part of the article. The bulk of the article raises entirely real issues.

Edit: I think the open source issue is this: if an AWS customer uses open source software (or, more simply, if an OSS project is hosted on OSS) how far up the user/employer/vendor/contributor chain does the non-assert clause reach? If I contribute to project X, which is hosted on AWS, do I become a party to the non-assert clause? What about my employer? What if I contribute to the project as part of my employment? I think this concern is probably not too significant (particularly since it only bars someone from asserting a claim related to the AWS service used), but I don't think it's fair to call this FUD, much less to call the whole article FUD because it includes this as an ancillary point.

The part I'd like more clairification on, is the claim that by using AWS you cannot assert IP claims against any AWS customer.

That seems exceedingly broad.

As to the FUD:

Conflict of interest. Former Patent Chief at MSFT putting an article out on Legal Issues for the #1 Cloud Provider, and MSFT Competitor, Amazon.

Wonder how much MSFT stock the Author is holding?

It is specific to AWS services. It protects you from going after ABC company who is using an AWS service (that you also use) that infringes on your IP.

In other words if Amazon stole something and you use it, you can't go after another client of Amazon's for using that service.

If however they also infringed on you, you could, as you aren't going after them for using the service.

(Note that IANAL so my understanding my be incorrect)

I don't believe this to be correct because no court has established what patent-troll means and the contract certainly doesn't say 'patent-troll' so the test of whether it is allowed or not will not be if someone is patent-trolling amazon but whatever a court determines the contract means.