Quick Answer: AI patent litigation has shifted decisively in favor of patent owners. Beginning in 2024 and cementing through 2025, the USPTO and federal courts have changed the standard for software and AI-implemented inventions, making it significantly harder for large companies to steal patented technology without consequence. If you hold a patent or are building technology worth protecting, this is one of the most important legal developments in years.
For a long time, the dirty little secret in Silicon Valley was this: patents don’t matter because you can’t enforce them.
I’m Jeff Schell. I’m a venture partner with an international venture capital firm and a patent attorney. I track federal circuit patent court decisions daily so you don’t have to. And I’m here to tell you that secret is dead.
Here’s what changed, why it matters, and what you should do about it now.
What “Efficient Infringement” Meant and Why It Worked
To understand the current state of AI patent litigation, you need to understand where we’ve been.
In 2014, the Supreme Court’s decision in Alice Corp. v. CLS Bank decimated software patents. The ruling effectively made it illegal to patent abstract ideas implemented on a computer, and courts began throwing out software patents at an alarming rate. If your invention was software-implemented, even if it was genuinely novel, the odds of winning a patent lawsuit dropped dramatically.
What Changed: The Pendulum Has Swung Back Hard
Starting in 2024 and cementing through 2025, both the USPTO and the federal courts revised the standard for patents involving software-implemented inventions. The shift is fundamental, not cosmetic.
Courts now recognize AI as a specific machine tool, not just abstract math. This distinction is critical. Under the old standard, many AI and software inventions were dismissed as too abstract to patent. Today, judges are evaluating these inventions differently, recognizing that a specific AI model, a defined training method, or a novel data architecture is a concrete technical improvement, not a mathematical abstraction.
Recent AI patent litigation has resulted in courts upholding patents covering:
- Data structure improvements
- User interface mechanics
- Specific methods of training artificial intelligence
These are precisely the categories of invention courts were dismissing a decade ago. The same types of patents big tech once felt comfortable ignoring are now holding up in court. For a closer look at the legal standards driving this shift, the USPTO’s published guidance on AI and software patentability is worth reviewing alongside recent Federal Circuit decisions.
Jeff’s Take
I’ve been practicing patent law and sitting on the investor side of the table for a long time, and what’s happening right now in AI patent litigation is genuinely unusual. The legal environment for software and AI patents is the most favorable it has been since before Alice. But here’s what I want founders to understand: this does not mean any software patent is suddenly valuable. What changed is that a well-drafted patent, one that clearly describes a specific technical improvement to a specific technical problem, now has real teeth. The patents that were always poorly written are still weak. The difference is that the good ones can now actually be enforced, which changes the entire strategic calculus around how and when to file.
Discretionary Denial: The New Shield for Patent Owners
One of the most consequential and least discussed changes in AI patent litigation involves something called discretionary denial.
For years, large companies had a powerful tool beyond district court: the Patent Trial and Appeal Board (PTAB) and its Inter Partes Review (IPR) process. When a startup tried to enforce a patent, a bigger defendant could simply file an IPR petition asking the PTAB to invalidate the patent. This parallel challenge was cheap for the challenger and expensive for the patent owner, and the PTAB granted these petitions at a high rate.
That dynamic has changed significantly. The USPTO Director has reassigned authority over IPR institution decisions and has begun exercising discretionary denial, rejecting petitions from third parties seeking to challenge patent validity, particularly for software and AI-implemented inventions.
For patent holders, this is a structural improvement. A well-drafted patent is now harder to kill through an IPR challenge, and enforcing your rights in district court is less likely to be derailed by a parallel PTAB proceeding. We wrote a detailed breakdown of how these new USPTO interim procedures could boost patent value for small innovators if you want to go deeper on the mechanics.
Why Efficient Infringement Is Now a Dangerous Strategy
Under the old rules, the worst-case scenario for a company that copied your patented technology was a settlement on favorable terms. The infringer’s lawyers knew the patent was vulnerable to challenge and that the court might dismiss the case on eligibility grounds before it ever reached a jury.
Under today’s rules, that calculus has changed completely.
If a company willfully infringes your patent, meaning they knew about your patent and copied your invention anyway, they now face the possibility of triple damages for willful infringement. And unlike in 2015, judges are increasingly allowing AI patent litigation to go to trial rather than dismissing it on eligibility grounds.
The combination of stronger software patent eligibility standards, discretionary denial of IPR petitions, and judges willing to let cases reach juries means efficient infringement is no longer efficient. The risk has shifted back to the infringer.
What This Means If You Hold a Patent
If you have a patent, especially a software or AI patent, your position is fundamentally stronger than it was even two years ago.
You are no longer just a nuisance. You are a threat.
And in business, being a credible threat is sometimes the only way to get a deal done. Whether the outcome you want is a licensing agreement, an investment offer, or an acquisition, you need leverage. A well-drafted, defensible patent is one of the most concrete forms of leverage available to a founder. This is how Silicon Valley has always treated patents: not as legal paperwork but as financial and strategic assets. The difference now is that the legal environment finally supports that view for software and AI companies, not just hardware and biotech.
For a closer look at how this mindset plays out in practice, see our piece on why Silicon Valley looks at patents differently and what that means for founders everywhere.
What This Means If You Haven’t Filed Yet
If you’re building a technology company and haven’t established a patent strategy, the window to act is more valuable than it has been in over a decade. The current AI patent litigation environment rewards founders who file early and file strategically.
That doesn’t mean any patent will do. Vague, broadly written software patents still face scrutiny. The key is filing the right way, with claims that demonstrate a specific technical improvement to a specific technical problem, not simply a business process automated by software. That is the standard that survives Alice, holds up in IPR, and gives you real leverage if AI patent litigation ever becomes necessary.
A few things worth knowing as you think about building your IP portfolio:
- A provisional patent application can establish your priority date quickly, typically for $3,000 to $6,000, while you continue development.
- A non-provisional utility patent is what creates the enforceable right. Understanding the full patent filing process helps you make smarter decisions about timing and investment.
- If you’re in software or AI specifically, working with a software patent attorney who understands both the Alice standard and the current enforcement climate is essential.
For a full breakdown of what protecting your innovation costs at each stage, see our 2026 patent cost guide.
The Sheriff Is Back in Town
The Wild West of efficient infringement is over.
The patent system, the same one that felt broken for most of the last decade, has fundamentally reoriented in favor of patent owners. The USPTO is acting like it means business. Courts are letting AI patent litigation reach juries. And AI and software inventions are being recognized as the real technical innovations they are.
If you’re building something worth protecting, now is the time to protect it. And if someone has been copying your technology and counting on the old environment to shield them, that bet is getting riskier by the day.
Make sure you are on the right side of that shift.
Frequently Asked Questions
What is efficient infringement?
Efficient infringement is a strategy where a company knowingly copies patented technology, calculating that the cost of litigation is lower than the cost of licensing or building around the patent. It became widespread after the Alice decision made software patents harder to enforce. The rise of AI patent litigation, combined with the threat of triple damages for willful infringement, has made this strategy far riskier.
Is AI patent litigation increasing in 2026?
Yes. Courts are now enforcing AI patents that demonstrate a clear technological improvement, such as reducing memory usage, training models faster, or detecting anomalies with less data. Judges are allowing more of these cases to reach juries rather than dismissing them on eligibility grounds, which is a significant shift from the post-Alice era.
What is discretionary denial at the USPTO?
Discretionary denial refers to the USPTO Director’s authority to reject Inter Partes Review (IPR) petitions before they reach a full hearing. This is particularly significant for software and AI patent holders, who previously faced a high risk of having valid patents invalidated through the PTAB process.
What are triple damages in a patent case?
If a court finds that a defendant willfully infringed a patent, meaning they knew about the patent and infringed anyway, the court can award up to three times the actual damages. This exposure is a major reason efficient infringement is no longer a safe strategy for large tech companies.
How do I know if my software or AI invention is patentable?
The key question is whether your invention solves a specific technical problem in a specific technical way, rather than simply automating a business process. A free consultation with Schell IP is the fastest way to evaluate whether your invention qualifies and how to protect it strategically.
What should I do if I already have an AI or software patent?
Now is a strong time to evaluate its enforceability and strategic value in light of the current AI patent litigation environment. Speaking with a patent attorney about your current portfolio, including licensing opportunities, infringement risks, and continuation applications, is a smart next step.
