3 April 2026
4 min read
A new UK Supreme Court ruling in Emotional Perception reshapes software and AI patentability, opening clearer routes to protection and Patent Box relief.
For years, UK software and AI companies have been told that “you can’t patent software.” Recent developments in UK case law show that the story is more nuanced, and potentially more favourable, than that.
In February 2026, the UK Supreme Court handed down a landmark decision in Emotional Perception, an AI-related patent case with potentially wide implications for computer-implemented inventions in the UK. The judgment moves away from the long-standing Aerotel approach and brings UK practice closer to that of the European Patent Office at the exclusion stage.
Importantly, the decision does not mean that all AI or software-based inventions are now patentable, nor did it confirm that the patent in question would ultimately be granted.
But it did make one thing clearer: If your innovation solves a genuine technical problem, it may have a stronger route to patent protection than many businesses assumed.
What’s actually changed?
The Court has signalled that:
Why this matters for your business
1) The route to patent protection for AI and software is becoming clearer
This has real commercial implications; you may have more protectable IP than you think. That means AI-heavy businesses, particularly those working on infrastructure, optimisation, security, or data-processing architecture, may have more patentable inventions than they previously assumed.
2) Patents can support long-term tax efficiency
Patents aren’t just about protection; they can also support your tax position. Patent Box relief allows companies to apply a reduced rate of Corporation Tax to profits derived from qualifying intellectual property. If more AI and software innovations are capable of meeting the patentability threshold, the scale of the Patent Box opportunity available to digital businesses could increase over time.
That means: more patentable innovation →more qualifying IP →greater potential long-term tax benefit through Patent Box
3) Early IP planning becomes even more important
To take advantage of this change and be able to benefit from both patent protection and Patent Box, make sure that you:
✔ Identify potential technical inventions early, not years after launch
✔ Capture evidence of the underlying technical problem and how the solution differs from routine practice
✔ Align patent filings with their broader R&D and commercial roadmap, so that Patent Box elections can follow when revenue starts to flow
This is where a more joined-up approach to R&D, IP strategy and tax planning becomes increasingly important.
What should you be doing now?
Take a closer look at what you’re already doing.
Revisit your development pipeline for patentable inventions : Many AI and software teams have historically assumed their work is “just code” and relied on copyright or trade secrets. It may now be worth revisiting key models, algorithms or system architectures with an IP specialist, particularly where the work delivers measurable improvements in performance, scalability, efficiency or security.
Join up R&D, patents and taxable profits:The more clearly a patent can be tied to specific R&D projects – and to the products or services that generate revenue – the easier it becomes to support a Patent Box position. This is particularly relevant where AI models or platforms are reused across multiple offerings.
Plan for an evolving Patent Box landscape: As the treatment of AI and software patents continues to develop, we may see increased use of Patent Box in these sectors, alongside closer scrutiny of how profits are attributed to patented innovations. If you are already tracking IP-linked revenues and costs you will be better placed to respond to the opportunity.
The bottom line
The latest Supreme Court decision does not suddenly make every AI feature patentable, nor does it guarantee Patent Box relief. But it does suggest that technically grounded AI and software innovation may have a stronger footing in the UK patent system than many businesses previously assumed.
The questions to start asking yourself now are:
If you have any questions about Patent Box or IP Planning, please contact the ABGi Team. We’ll get back to you to discuss your unique needs and explain how we can assist.