Are Patents Still Relevant in the Age of AI?

The cost to build software is collapsing.

Not slowly. Not incrementally. It’s collapsing fast enough that entire assumptions about startups, competition, and defensibility no longer hold.

AI has changed the economics of software development in two fundamental ways. First, it has reduced the time required to build functional products. Second, it has reduced the number of skilled people required to do so. What once took teams of engineers and years of iteration can now be prototyped, tested, and deployed by a small group—or even a single founder—using modern AI tooling.

That sounds like progress. And it is. But it also creates a problem most entrepreneurs are not prepared to deal with.

When the cost of building software approaches zero, software itself stops being a defensible asset. This is a structural change in technology markets — and it makes the question “Are patents still relevant?” even more urgent.

The Startup Dilemma in an AI-Driven Market

Consider a scenario that happens more often than any founder admits publicly:

An entrepreneur identifies a real problem in a large, underserved market. They articulate the problem clearly. They build a solution that works. They bring it to market. Customers buy it. Revenue exists.

This used to be the hard part.

Historically, speed and cost of development were natural barriers to entry. Even if competitors recognized the opportunity, they still had to invest heavily to catch up. That lag gave startups breathing room to grow, establish a brand, and build momentum.

But AI removed that lag.

Today, a well-funded incumbent can look at a startup’s product and say, “We can do that too” — and actually mean it. They don’t need to reverse-engineer years of development. They don’t need large engineering teams. They don’t need expensive experimentation.

They can replicate core functionality quickly and deploy it immediately to customers they already control.

At that moment, the startup finds out whether it has a real competitive advantage — or whether it merely had a temporary head start.

When Software Stops Being the Advantage

Here’s the uncomfortable truth most founders avoid:

Your product is not your competitive advantage.

Your idea is not your competitive advantage.

Your implementation is not your competitive advantage.

If a well-funded competitor can replicate your value proposition quickly and sell it to your customers, the market will reward whoever delivers the solution most efficiently and at the greatest scale — not whoever was first.

This is why patents matter more now, not less.

But not all patents. Only the ones that give you leverage in a real competitive fight.

Don’t Fall for the “Defensive Patent” Myth

Entrepreneurs are often told they need patents for “defensive purposes.” That phrase sounds comforting, but it is meaningless.

A patent that you are unwilling or unable to enforce is not defensive. It is decorative. It does not stop competition. It does not protect revenue. It does not create leverage.

This misconception — that a patent alone offers protection — is a persistent myth in the startup and legal ecosystem. You see it in posts like “Myth: Patents Have Intrinsic Value”, where the fundamental error is treating a patent like a ticket you cash in for protection.

If your patent cannot be used to change a competitor’s behavior, it does not defend anything.

What Actually Makes a Patent Valuable

A useful patent does not protect your “idea.”

It protects the reason customers buy your product.

Customers don’t buy ideas. They buy solutions to specific problems — functionality that creates value for them in a concrete way.

The hard part of patent strategy — especially in software — is identifying what value customers actually pay for. Early on, founders guess. They hypothesize. They do market research. But until someone actually buys the product with a credit card, everything is hypothetical.

Only after real transactions occur do you learn what actually mattered:

• Was it speed?
• Was it accuracy?
• Was it reliability?
• Was it compliance?
• Was it cost reduction?

You often don’t know in advance.

This creates a fundamental tension in patent strategy: patents must be filed early, but real value is revealed later.

Good patent strategy accounts for this reality instead of pretending it doesn’t exist.

Avoiding the “Big Idea” Patent Trap

One of the most common mistakes founders make is chasing broad, conceptual patents covering the “big vision” instead of the mechanisms that actually matter. These patents attract prior art, invite invalidity challenges, and are difficult to enforce.

The competitive advantage is not the grand vision. It is the specific mechanisms that customers cannot avoid if they want the benefit your product delivers.

That is what should be patented.

This principle is reflected in posts like “Worthless Patents — How to Avoid the Biggest Pitfalls”, which warns that without careful selection of what to patent and how to patent it, you can end up with an asset that does nothing in the real world. :contentReference[oaicite:2]{index=2}

The “Slide to Unlock” Insight

A useful analogy comes from early smartphone litigation.

Apple didn’t sue Samsung for “making a phone.” They sued over specific interactive mechanisms — like slide-to-unlock — because that was a functionality that every competitor would have to replicate to offer an all-touchscreen experience.

That is the mindset founders need.

When you enter a new market and solve a problem no one else has solved, you are forced to do things others have never needed before. Those unique mechanisms — the ones competitors can’t avoid if they want to compete — are where valuable patent territory lives.

Ask the right question:

If a competitor wants to offer the same value proposition, what do they absolutely have to do?

That is the patentable surface.

Not because it is clever. Not because it is abstract. But because it is unavoidable.

Patents Must Be Detectable and Enforceable

A patent that cannot be enforced is worthless. And in modern software, detectability is often the Achilles’ heel.

If you cannot tell a competitor is infringing — because the infringing activity happens entirely inside someone else’s systems — you cannot enforce the patent. That’s why “Detectability is a Key Factor for Patent Value” is core reading for any founder thinking about software patents.

If infringement cannot be observed, even in principle, then your patent is functionally irrelevant.

Patent Strategy Is a CEO Responsibility

This is the part many founders underestimate:

Patent strategy is not a legal checkbox you offload to an attorney.

Patent attorneys are workmen. Their job is to draft applications that comply with USPTO rules and to prosecute claims to issuance. They are not responsible for how enforceable those patents are in the market.

In fact, their incentives and motivations are to feed their families. What does this mean? It means a lot of “advice” that benefits them but goes directly against your aims and goals. (See every provisional patent blog post I have written.)

The “strategy” that your patent attorney is virtually guaranteed to benefit them before it benefits you.

Your job — the CEO and founder — is to decide:

• What competitive advantage matters
• Which competitors matter
• Which features must be protected
• Which claim limitations are unacceptable
• Which risks are tolerable

This aligns with the argument in “Your Patent Attorney Is NOT Giving Business Advice” — that entrepreneurs cannot outsource strategic thinking on patent value.

If you hand this off and let it run open-loop, you will get exactly what you deserve: shiny plaques on the wall and not much more.

When Patents Actually Matter

Here’s the uncomfortable, unavoidable conclusion:

Patents matter more now than ever — but only if they are strategically aligned with competitive advantage.

AI makes replication easy.

That means technical barriers no longer protect you — legal leverage does.

When competitors can duplicate your core value proposition overnight, the only barrier left is exclusionary rights embodied in enforceable patent claims.

But sloppy patents make that barrier porous. And that is worse than having no patent at all.

Founders need to think about patent strategy the same way they think about product-market fit, revenue model, and distribution strategy.

Start Yesterday

There is no perfect moment to begin building a robust IP strategy.

But there is a fact:

The best time to start was yesterday. The second-best time is now.

This is not about filing patents for the sake of filing.

It’s about understanding what truly makes your business defensible in a world where software is cheap and competition is fast.

If patents are going to be the thing that keeps your company alive when the market gets crowded, they must be treated as a core business asset — not an administrative task.

Because when copying begins, it will already be too late to fix it.