While patents aren't a silver bullet that will protect your growing business from competition, they are an important part of your business and something that VCs look for as part of a solid business plan. You can read more about why you should have patents and how to build an effective patent strategy over at Guy Kawasaki's blog.
Patents still play an important role in building a defensible business—they’re just not the whole enchilada. In most cases, entrepreneurs need to avoid the knee-jerk reaction of “Patent Everything!” and should instead follow a carefully planned, comprehensive intellectual property strategy to achieve defensibility.
Be sure to also read Guy's original post on the defensibility.