Earlier this year, we reported on the first instance proceedings in Wright & Ors v BTC & Ors, in which Dr Wright, who asserts to be the inventor of the Bitcoin system, alleges that a number of defendants have infringed his database rights in the Bitcoin Blockchain, and his copyright in the foundational Bitcoin White Paper and the Bitcoin File Format. Our article on the case can be found here.
Since some of the defendants were based outside of the jurisdiction, Dr Wright required permission of the court to serve his claim form. For this, he needed to show that there is a serious issue to be tried on the merits of the case. Mr Justice Mellor was satisfied that this test was fulfilled and allowed Dr Wright’s application in respect of all causes of action, except in relation to the infringement of copyright in the Bitcoin File Format. In the judge’s view, there was no evidence that the Bitcoin File Format was “recorded” for the purposes of s. 3(2) of the CDPA 1988. In other words, Dr Wright failed to show that the fixation requirement was met, which is a necessary condition for copyright to subsist in a work. He was therefore denied permission to serve this part of his claim.
In Wright & Ors v BTC & Ors [2023] EWCA Civ 868, the Court of Appeal has now overturned that first instance refusal. Writing the judgment for an unanimous court, Lord Justice Arnold held that for a number of reasons the first instance judge had erred in finding that Dr Wright’s Bitcoin File Format claim raised no serious issues for trial. Most importantly:
- The judge’s finding that “no relevant ‘work’ has been identified containing content which defines the structure of the Bitcoin File Format” had confused the ‘work’ with the ‘fixation’. The Bitcoin File Format, i.e. the work in question, had been clearly identified. The question when it was fixed was a different one.
- It was not correct for the judge to find that there needed to be some content which defines the structure of the Bitcoin File Format for the purpose of fixation. All that is required is that the structure is completely and unambiguously recorded.
- The judge did not apply the correct test for fixation, which was laid down by the ECJ in C-310/17 Levola Hengelo. He should have asked whether the Bitcoin File Format was identifiable with sufficient precision and objectivity.
- The judge had failed to consider the rationale for the requirement of fixation which, Lord Justice Arnold explained, serves two purposes: to evidence the existence of the work and to delimit the scope of protection.
As a result, Dr Wright will now be able to serve his claims in their original form, including in relation to the Bitcoin File Format.
It is worth noting that the Court of Appeal decision does not mean that copyright definitely subsists in the Bitcoin File Format; merely that this is a serious issue for trial. A number of statements in the Court of Appeal judgment suggest that Dr Wright’s claim could still fail, including for instance because the Bitcoin File Format may not be an intellectual creation (since it has been dictated by technical considerations), or because it may be an idea rather than a work, and thus is not protected by copyright. However, these questions will require further factual investigation and detailed argument. Fans of intricate copyright questions will look forward to the outcome of the main proceedings.
For further information, please contact:
Paul Joseph, Partner, Linklaters
paul.joseph@linklaters.com
