Wright v BTC Core
| Jurisdiction | England & Wales |
| Judge | Mr Justice Mellor |
| Judgment Date | 07 February 2023 |
| Neutral Citation | [2023] EWHC 222 (Ch) |
| Docket Number | Case No: IL-2022-000069 |
| Court | Chancery Division |
[2023] EWHC 222 (Ch)
THE HON Mr Justice Mellor
Case No: IL-2022-000069
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)
Rolls Building, Fetter Lane
London, EC4A 1NL
Michael Hicks (instructed by Harcus Parker Limited) for the Claimants
The Defendants were neither present nor represented
Hearing date: 3 rd February 2023
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Remote hand-down: This judgment will be handed down remotely by circulation to the parties or their representatives by email and release to The National Archives. A copy of the judgment in final form as handed down should be available on The National Archives website shortly thereafter but can otherwise be obtained on request by email to the Judicial Office (press.enquiries@judiciary.uk). The deemed time and date of hand down is 10 am on Tuesday 7 th February 2023.
THE HON Mr Justice Mellor
This judgment is concerned with a short, discrete but important point about whether copyright subsists in a file format used in the Bitcoin System. Unfortunately, there is a lot of background and context I must set out before I get to the short point in question.
Background
The First Claimant, Dr Wright, claims to be the creator of the Bitcoin System, the person who wrote the original Bitcoin code and the author of the White Paper, a document entitled Bitcoin: A Peer-to-Peer Electronic Cash System, which essentially describes the Bitcoin System. He claims he was the person who made the White Paper available to the public on 31 October 2008 under the pseudonym Satoshi Nakamoto.
This action is one of four in the Business & Property Courts involving Dr Wright and there is a common issue in all four actions – what has been called ‘the identity issue’, namely, whether it was Dr Wright who adopted the pseudonym Satoshi Nakamoto when announcing his creation of the Bitcoin System or, perhaps slightly inaccurately, whether Dr Wright was or is Satoshi Nakamoto. That issue will be the subject of trial in due course.
The hearing which gave rise to this judgment was concerned with an aspect of Dr Wright's application for permission to serve this claim out of the jurisdiction. Some of the Defendants are in the jurisdiction and have been served already in a conventional way. The majority of the Defendants are outside the jurisdiction. There is clear authority that, in order to grant a litigant permission to serve his claim on someone outside the jurisdiction, the court must be satisfied that there is a serious issue to be tried on the merits of the claim see Altimo Holdings and Investment Ltd v Kyrgyz Mobile Tel Ltd [2011] UKPC 7 at [71], VTB Capital Plc v Nutritek International Corp [2013] UKSC 5 at [164]. This means that the claim must have a real (as opposed to a fanciful) prospect of success. This standard applies to each cause of action asserted in the claim.
How the issue arose and how it developed
The application for permission to serve out came before me to determine on the papers. Having considered all the material, I was satisfied I should grant permission to serve out on the claims asserted in the draft Amended Particulars of Claim with one exception. This concerned the claim of subsistence and infringement of copyright in an alleged literary work referred to as the Bitcoin File Format. I therefore requested the Claimants to file a short skeleton argument and/or further evidence to address this point: ‘ When and in what form the alleged literary work in the Bitcoin File Format was first recorded, in writing or otherwise.’ I was raising the issue of fixation.
The Second Witness Statement of Dr Wright was filed to address this point, and he did so in the following paragraphs:
‘4. I devised and created the Bitcoin File Format in the course of writing the code for the Bitcoin System. When the software runs and the hashing problem is solved, the software creates blocks in the Bitcoin File Format which are added to the Bitcoin Blockchain file.
5. The first block in the Bitcoin Blockchain is a special block known as the “Genesis Block”. I ran the Bitcoin Software on 3 January 2009 (GMT) and created the Genesis Block on that day. It includes the words “ The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”. (These words are not part of the file format but are simply some of the contents of the Genesis Block). The “Genesis Block” is an anchor value which is unique to Bitcoin.
6. There were issues with the software which took me some days to correct. The second block (now known as Block #1) which is the first “mined” block in the Blockchain was not created until I ran the software on 9 January 2009 (GMT).
7. Therefore, the Bitcoin File Format in the form which is on the Bitcoin Blockchain was first recorded on 3 January 2009 (GMT) when the software was run as I have described above. The recording was in electronic form on the Bitcoin Blockchain.’
In [8] Dr Wright describes how, over 2007 to 2009, there were earlier pre-release versions of the software and file format created in the course of his development – entirely to be expected. He concludes [8] with this:
‘When these earlier pre-release versions were run as with the version released in January 2009, they would write a block to file. This would have made a record in electronic form of the Bitcoin File Format in the form it stood at the time.’
All this evidence says is that blocks were written to file in the Bitcoin File Format, i.e. the data in a block was stored according to the structure explained in Schedule 2 to the Particulars of Claim (see further below). It does not address the issue of fixation: where was this structure fixed in a material form.
On the basis of those materials, I formed the view that there was no serious issue to be tried. I asked my clerk to communicate a message to this effect to the Claimant's solicitors, indicating that if the Claimants wished to address this point further, a short oral hearing would be appointed. This resulted in the hearing last Friday.
As part of the preparation for the hearing, the Claimants' solicitors asked for an indication of what I would find helpful to cover. My response sent to them was as follows:
‘The alleged literary copyright work is said to be the Bitcoin File Format, as explained in Schedule 2. Paragraph 57 of the Particulars of Claim seems to indicate that the Bitcoin File Format was first recorded in the early blocks of the Blockchain.
However, as the Judge understands the position, each block simply comprises a long list of hex characters. The ‘structure’ derives from what the software is instructed (in its code) to read and process when it reads a block. So the software reads the first 80 bytes and processes those as constituting the header. Those 80 bytes can then be ‘read’ by reference to the structure set out in paragraph 3 of Schedule 2, so the first 4 bytes are processed as constituting the nVersion field and so on. But again, the structure of the block header derives from what the software is instructed to read and process. It is not indicated in the block itself.
Hence the questions:
1) Is the above understanding broadly correct? If erroneous, please explain in what respects.
2) Where, in one of the early blocks, is it possible to discern the structure which is now claimed to be the copyright work;
3) In what sense is the structure (as discernible in one of the early blocks) reproduced in later blocks?’
With the benefit of hindsight, my last two questions are capable of creating something of a red herring, because with the benefit of an understanding of the software and what it reads and writes and possibly by studying many blocks, it is possible to discern the structure of a block. In the course of the hearing, Mr Hicks offered to file further evidence comprising extracts from various books on Bitcoin which show that several people have worked out the structure of a block. I indicated that was not necessary, since I entirely accept that people have been able to work out the structure of a block.
Prior to the hearing I received a helpful Skeleton Argument from Mr Hicks along with a very useful bundle of authorities.
I make clear that for the purpose of determining whether I should grant permission to serve out, I have proceeded on the assumption that everything said by Dr Wright is true (including his claim to be the creator of the Bitcoin System) and, furthermore, that all the allegations of fact contained in the draft Amended Particulars of Claim are true. All allegations which reach that stage will be tested at trial.
The underlying claim
In this action, Dr Wright claims to be the owner of certain database rights which he says subsist in three databases, namely (i)...
To continue reading
Request your trial
-
Dr Craig Steven Wright v BTC Core (A Partnership)
...FROM THE HIGH COURT OF JUSTICE, BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES, INTELLECTUAL PROPERTY LIST (ChD) Mr Justice Mellor [2023] EWHC 222 (Ch) Royal Courts of Justice Strand, London, WC2A 2LL Michael Hicks (instructed by Harcus Parker Ltd) for the The Respondents did not appear ......
-
Dr Craig Steven Wright v Coinbase Global, Inc.
...by consumers in the UK and elsewhere. 14 The fourth action is IL-2022-000069 between Dr Wright (and two companies) and 26 Defendants ( Wright v BTC Core), which I refer to as ‘the BTC Core action’. In this action, Dr Wright claims to be the owner of certain database rights which he says sub......
-
Bitcoin File Format: Protected By Copyright Or Not?
...and the Bitcoin community welcome the recent decision of the English High Court in United Kingdom Wright & Ors v BTC Core & Ors [2023] EWHC 222 (Ch). The Court held that the file format used to create blocks on the Bitcoin Blockchain System (the "Bitcoin File Format") lacks sufficient conte......