Dr Craig Steven Wright & Ors v BTC Core (a partnership) & Ors

The Court of Appeal allowed the appellants' appeal against Mellor J's refusal to grant permission to serve the claim form out of the jurisdiction in respect of the claim for infringement of copyright in the "Bitcoin File Format". The court held that the judge had erred in law in his approach to the requirement of fixation under section 3(2) of the Copyright, Designs and Patents Act 1988 (the domestic enactment of the fixation concept in international law) and in failing to apply the tests developed by the Court of Justice of the European Union (notably Levola) for identifying a "work" and assessing whether the alleged fixation made the subject-matter identifiable with sufficient precision and objectivity.

The appeal court concluded that the Bitcoin File Format had been adequately identified as the putative work and that the judge had conflated the existence of the work with the separate question of how it was fixed. The court considered that the fixation contended for — the first block(s) written to the Bitcoin blockchain in January 2009 — could, on the presently available material, serve both to evidence the existence of the work and to delimit its scope, and that the claim therefore had a real prospect of success. The court therefore allowed permission to serve out of the jurisdiction.

Background and parties

• The claimants, led by Dr Craig Wright, alleged he authored the Bitcoin system, the original Bitcoin source code and the White Paper and claimed copyright in the Bitcoin File Format and the White Paper together with database rights in parts of the Bitcoin blockchain. The defendants included BTC Core and multiple individuals and companies, many outside the jurisdiction.
• The claim form was issued on 1 August 2022. The claimants sought permission on 15 December 2022 to serve the claim form on defendants outside the jurisdiction. Mellor J refused permission in respect of the claim alleging infringement of copyright in the Bitcoin File Format, holding the claim had no real prospect because copyright had not been "recorded, in writing or otherwise" as required by section 3(2) CDPA.

Nature of the relief sought

The appellants sought permission to serve the claim form out of the jurisdiction in respect of the copyright claim relating to the Bitcoin File Format (and other relief in the broader proceedings), permission being conditional on there being a serious issue to be tried.

Issues framed by the court

1. Whether the Bitcoin File Format is a "work" capable of copyright protection, having regard to the European and international framework and the distinction between expression and ideas, methods or procedures;
2. Whether the alleged work had been fixed in accordance with section 3(2) CDPA (the fixation requirement); and
3. Whether the alleged work met the originality requirement (the author's own intellectual creation).

Key legal framework relied upon

The court considered the Berne Convention, TRIPS, the WIPO Copyright Treaty, the Software Directive (2009/24/EC) and the Information Society Directive (2001/29/EC) and domestic law, particularly section 3(2) CDPA which gives effect to the fixation requirement, and relevant CJEU authority (notably Infopaq and Levola) and domestic jurisprudence (including SAS Institute v World Programming Ltd).

Court's reasoning and conclusion

• The Court of Appeal held the judge had wrongly conflated the putative work and the means of its fixation, and had required the presence of explicit content within a block which "defines" or labels structure (for example, flags or XML-like markers) as a precondition of fixation. That requirement was unnecessary: fixation may be established by a recording that unambiguously and completely records the structure of the work even if the recording does not explicitly contain descriptive content indicating the structure.
• The court applied and relied on the Levola formulation that a work must be identifiable with sufficient precision and objectivity; it held the judge failed to apply that test and to consider the twin purposes of fixation (evidencing existence and delimiting scope). The appellants adduced evidence (assumed for present purposes by the judge) that third parties had been able to deduce the block structure from blockchain data; that fact supported the contention that the structure was identifiable with sufficient precision and objectivity.
• The court recognised issues of originality and the potential for the format to be governed by technical constraints but accepted the judge's earlier view (for present procedural purposes) that there was a real prospect on originality which requires fuller factual inquiry.

Procedural outcome

Because the claim for copyright in the Bitcoin File Format had a real prospect of success, the court allowed the appeal and granted the relief sought on the application to serve the claim form out of the jurisdiction in respect of that cause of action.

This was an appeal and the appeal was allowed. The Court of Appeal held that Mellor J had erred in law by conflating the existence of the putative work with the separate requirement of fixation under section 3(2) CDPA, by effectively requiring explicit descriptive content within a block to demonstrate fixation, and by failing to apply the Levola test for whether a subject-matter is identifiable with sufficient precision and objectivity. On the material before the court it was concluded that the appellants had a real prospect of demonstrating fixation (the first block(s) written to the blockchain in January 2009) and so permission to serve out of the jurisdiction should have been granted.

This appeal was from an order of Mr Justice Mellor dated 7 February 2023, [2023] EWHC 222 (Ch), refusing the claimants permission to serve the claim form out of the jurisdiction in respect of the copyright claim in the Bitcoin File Format. The claim form had been issued 1 August 2022; the permission application was made on 15 December 2022; the oral hearing before Mellor J occurred on 3 February 2023. The appeal was heard in the Court of Appeal on 12 July 2023 and decided on 20 July 2023 ([2023] EWCA Civ 868).