In its recent judgment in Wright and others v. BTC Core and others [2023] EWHC 222 (Ch), the English High Court had cause to consider whether copyright could in principle subsist in: (i) the White Paper entitled Bitcoin: A Peer-to-Peer Electronic Cash System (the White Paper); and (ii) the file format used to create blocks on the Bitcoin blockchain (the Bitcoin File Format). The English High Court distinguished between the White Paper, in which the Court found that copyright could subsist as a conventional literary work, and the Bitcoin File Format which the Court considered to lack sufficient content to be classified as a ‘work’ to which copyright could attach.
Background
These proceedings are part of a series of claims brought by Dr Craig Wright in the English High Court relating to his claim that he created the Bitcoin system; wrote the original Bitcoin code; authored the White Paper; and shared the White Paper with the public under the pseudonym Satoshi Nakamoto.
In these particular proceedings, Dr Wright claims to be the owner of certain database rights in three databases and that he (or companies he controls) owns the copyright which subsists in both the White Paper and what he calls the 'Bitcoin File Format'. Dr Wright objects to two ‘Airdrops’ which effected significant changes to the Bitcoin system (resulting in the creation of the BTC Blockchain and the BCH Blockchain). Dr Wright is of the view that the database rights and copyrights which he/his companies claim to own provide him with a means of preventing or controlling the further operation of the BTC and BCH Blockchains.
The present judgment concerned only an (uncontested) application by Dr Wright for permission to serve the claim on certain defendants outside the jurisdiction. As part of such an application, a claimant must satisfy the Court that there is a serious issue to be tried, meaning the claim must have a real (not fanciful) prospect of success. While the Court was satisfied on the papers that the claims in database rights and infringement of copyright in the White Paper raised a serious issue to be tried and so service of those claims out of the jurisdiction was permitted, the Court wished to hear from the claimants on the issue of whether copyright could exist in the Bitcoin File Format.
Can copyright exist in the Bitcoin File Format?
The Court was not satisfied that the Bitcoin File Format met the test for a 'work' to which copyright can attach.
By way of reminder, in order for subject matter to be classified as a ‘work’ under copyright law: (i) it must be original – i.e. the author’s own intellectual creation; and (ii) the ‘work’ must be the expression of this creation. This expression must be in a manner that makes that creation identifiable with sufficient precision and objectivity (sometimes known as ‘fixation’).
The Court accepted that the originality / intellectual creativity element of the test was met by the Bitcoin File Format. It further accepted that it is possible for certain file formats to contain sufficient content to be classified as ‘work’ (such as XML file formats); however, the question of whether a file format contained sufficient content was a question of fact.
Dr Wright argued that the Bitcoin File Format involves data in a block being stored according to a particular structure (the Bitcoin File Format), and this was recorded in the early blocks of the Blockchain.
The Court found that the claimants had multiple opportunities to explain what in the Bitcoin File Format, as expressed in each block, would comprise ‘content not just structure’, but had failed to do so. Put another way, the blocks Dr Wright said recorded the Bitcoin File Format did not contain content indicating the structure of the format, they were just blocks which conformed to that structure. Therefore, the structure of the Bitcoin File Format was not fixed in a copyright sense in a material form in those blocks. The Court observed that it was not surprising that a block does not contain content which would indicate the structure, as this would be both unnecessary and a "very inefficient use of memory".
The Court went on to state that, although the law of copyright will "continue to face challenges with new digital technologies", it did not see any prospect of the law in its current form allowing copyright protection "of a subject-matter which is not expressed or fixed anywhere", confirming that the fixation requirement will remain for digital technologies.
What can we take from this case?
Seeking to shoehorn new technologies into the existing legal framework continues to prove a challenge both for those wanting to enforce rights relating to these technologies and for the Courts. Despite the outcome, this case demonstrates the English Courts’ willingness to grapple with these issues and to apply existing legal principles to new technologies.
This judgment is not, however, the end of the chapter for Dr Wright’s claims to copyright in the White Paper and the Bitcoin File Format. The Court granted Dr Wright permission to serve out in respect of his claim to copyright in the White Paper – should that matter proceed to trial, the English Court will have to determine whether Dr Wright was in fact the author of the White Paper and whether he has a claim to copyright in it. As for Dr Wright’s claim to copyright in the Bitcoin File Format, while the High Court refused permission to appeal, Dr Wright has indicated an intention to seek permission to appeal from the Court of Appeal.