If I were a VC, I would make it a covenant in any seed investment that the company had to open-source everything if they didn't make it to profitability.
I honestly feel, in this day and age, patents don't really help you until you get to the scale that they do (purely defensive) unless you're a troll.
Don't feed the trolls.
I think in the case of Lightform, their core projection mapping algorithm is already public and has open source implementations. It's called "structured light". A quick search turned up this open source implementation: https://github.com/jhdewitt/sltk
couldn't they even get in trouble with their investors for having failed to achieve profitability with this misguided "open" strategy?
/devil's-advocate
Their "moat" was never the mapping algorithm itself; it was the suite of tools (hardware and software) that allowed users to easily map content without understanding the details of that algorithm.
I don't think their problem was that everyone was flocking to the open source tools. I think their problem is that the market for automatic projection mapping is extremely small.