It really isn't FUD, actually, despite the attribution.
First, You promise not to bring IP lawsuits against Amazon or it's customers, actually. Second, in fact, yes, if Amazon uses your open source (in some way that is a violation of the license), and you use AWS, you can't sue them.
Which is what the parent asked, and in fact, the clause specifically prohibits.
(Whether I like these clauses or not is another matter).
“Service Offerings” means the Services (including associated APIs), the AWS Content, the AWS Marks, the AWS Site, and any other product or service provided by us under this Agreement. Service Offerings do not include Third Party Content.
“Service” means each of the web services made available by us or our affiliates, including those web services described in the Service Terms.
Right now we have one case which hasn't been settled and which apparently did involve a business partner. I think we'd need n > 1 or at least a final ruling before making the kind of sweeping claims presented originally.
I don't see that term supporting the sweeping claims made in that article but you're certainly free to disagree. Ultimately I think this is somewhat moot until Amazon actually initiates action against anyone – the Appistry case was initiated by them and seems like to fail since the claims in e.g. https://www.google.com/patents/US7379959 don't appear to include anything which wasn't common HPC practice in 2002 – and we see how the courts react to it.
This is easily explained by the attribution:
“Bart Eppenauer, former chief patent counsel at Microsoft and now managing partner of law firm Shook Hardy & Bacon’s Seattle office”
A quick search leads to http://www.shb.com/news/2013/11/shook-to-open-seattle-office... which suggests that their Seattle office was founded to expand their IP practice:
“Eppenauer has served as chief patent counsel at Microsoft Corp. in Redmond, Wash., since 2003. In that role, he led the Patent Group in the Legal and Corporate Affairs Department, where he developed Microsoft’s patent portfolio of over 35,000 issued patents worldwide and managed a team of more than 100 patent professionals offering patent counseling and product development support across all of Microsoft’s business and research divisions. With extensive experience in complex, multilateral IP transactions and license agreements, Eppenauer has also worked closely with government and judicial officials, academics, and industry leaders worldwide on IP policy issues, in addition to participating in the recent passage of major U.S. patent reform legislation.”
So we have an attorney leaving a company with a track record of aggressive IP enforcement to open an IP-focused office for a law firm which does things like send people to chair conferences on monetizing IP (http://cf-conferences.com/conferences/ip-strategy-seattle-20...) telling businesses that he's deeply concerned about their ability to hire people like them to bring expensive IP lawsuits.