Competition is what drives technology forward. The only thing that may have changed is that hardware developments now spread faster to other companies because a lot of it is outsourced.
Software knowledge still spreads through diffusion through the movement of employees between companies, but also is sped up a bit because lots of scientific ideas are distributed through the Internet.
Gates himself admitted that if the current patent system had been in place back when MS got started, it would never have gotten off the ground.
Back during the 70s-80s, a specific set of code was covered by copyright. But the behavior encoded could be reverse engineered.
A famous example is how Compaq clean room reverse engineered the BIOS of the IBM PC, thus opening up the market for the clones.
In constrast there are all kinds of issues with using FAT (FAT32/ExFAT) variants on Android phones because MS have/had patents. And i think Android early on didn't offer things like pinch to zoom because Apple held a patent (not sure what happened there).