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Craig Wright had his appeal on Bitcoin's copyright denied by the judge: There can't be copyright claims on files used in the Bitcoin blockchain

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by COINS NEWS 74 Views

Pretty much the title. TL;DR at the end. The original document, which was released yesterday, can be found here.

CW was trying to appeal on the copyright of the "Bitcoin File Format":

  1. 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.

On the claims

14 In this action, Dr Wright claims to be the owner of certain database rights which he says subsist in three databases, namely (i) the Bitcoin Blockchain, (ii) the Bitcoin Blockchain as it stood on 1 August 2017 at 14.11 – up to and including block 478,558 and (iii) another part of the Bitcoin Blockchain made in a particular period (the details of which do not matter for present purposes). Dr Wright also says he (or one of the Claimants) owns the copyright which subsist in (a) the White Paper and (b) what is called in the Particulars of Claim 'the Bitcoin File File Format'.

15 Dr Wright brings this claim because he objects to two 'Airdrops', each of which effected what he terms 'significant' changes to his Bitcoin System and which deviated from the principles and protocols he had created and specified. The first Airdrop occurred on 1 August 2017 and resulted in what Dr Wright calls the BTC Network. Nodes on the Bitcoin Network continued to operate the existing Bitcoin System but the Airdrop effectively created a branch in the chain, so that from block 478,558, the Bitcoin Blockchain continued adding blocks mined by its nodes thereby extending the Bitcoin Blockchain, with the BTC Blockchain running in parallel. The ticker 'BTC' has been adopted for the digital cash system operated by the BTC Network.

16 The second Airdrop occurred on 15 November 2018 and created another new peer-to-peer network (the 'current BCH Network'), again which Dr Wright says implemented significant changes to his Bitcoin System. So from that date another parallel blockchain emerged, this called the BCH Blockchain. The ticker BCH is used for the digital cash system operated by the BCH Network.

17 Although Dr Wright says he did not coin the ticker BSV (Bitcoin Satoshi Vision), it is now used to designate the original Bitcoin digital cash system.

On the ruling

40 As the Advocate General states in point 57 of his Opinion, to accept that the functionality of a computer program can be protected by copyright would amount to making it possible to monopolise ideas, to the detriment of technological progress and industrial development.

Not only that, but

37 For present purposes, this ruling says nothing more than the format of data files might be protected as literary works. Whether an individual file format is protectible depends on the facts.

Some things have been decided on CW's favour, though:

50 There were a number of points made in Counsel's submissions with which I have no difficulty whatsoever. Indeed, each of the following points I had already assumed in Dr Wright's favour, either explicitly or implicitly:

i) That Dr Wright expended substantial skill and judgement in creating the Bitcoin File Format, such that the originality/intellectual creativity requirement is met – in other words I have ignored any potential issue as mentioned by Arnold J. in SAS No.3 at [41];

ii) That Dr Wright devised and created the Bitcoin File Format in the course of writing the code for the Bitcoin System;

iii) There is no reason why two works cannot be created in parallel with one another and in the course of the same creative process.

However, when it comes to copyrights,

54 It remains the case that no relevant 'work' has been identified containing content which defines the structure of the Bitcoin File Format. [...]

Other points:

56 The Claimants were presented with a possible fifth opportunity during the hearing when I asked Counsel whether, in the light of the discussion which had taken place, the Claimants wished to file any further evidence. As mentioned above, Counsel offered extracts from textbooks which show that third parties have divined the structure of a block in the Bitcoin Blockchain. As also mentioned above, I have assumed that is the case, but it does not assist the Claimants on the key issue in any way.

57 It is most revealing that, despite all these opportunities, the Claimants have not filed any evidence to the effect that a block contains content indicating the structure, as opposed to simply reflecting it. By 'content indicating the structure', I mean, by way of a crude example, a flag or symbol in the block which signals 'this is the start of the header' or 'this is the end of the header', or an equivalent of the sort of content which is found in an XML file format. Whilst I entirely accept that each block conforms to the structure described in Schedule 2 to the Particulars of Claim and is an instance or manifestation of that structure, the absence of such evidence confirms my initial view that, whether one considers the point at which the first, second or subsequent block(s) were written embodying the structure of the file format, nowhere was the structure of Bitcoin File Format fixed in a copyright sense in a material form in any of those blocks.

58 It is also highly pertinent that the Claimants did not file any evidence to the effect that my rather basic understanding of the position as regards a block (see my question 1) and the understanding set out in the quote under paragraph 10 above) was incorrect. I am driven to the conclusion there are no overt signs in a block which indicate the structure as described in Schedule 2 to the Particulars of Claim. Akin to the conclusion set out at the end of [128] in SAS No.3: there is no evidence that the Bitcoin File Format is set out in any part of the software or early blocks written to the Bitcoin Blockchain, as opposed to the Bitcoin Software simply reading and writing files in that format.

[...]

59 I also observe that it is not at all surprising that a block does not contain content (whether flags or symbols) which indicate the structure. Not only would they be unnecessary, their inclusion would also be a very inefficient use of memory.

62 Whilst I accept that the law of copyright will continue to face challenges with new digital technologies, I do not see any prospect of the law as currently stated and understood in the caselaw allowing copyright protection of subject-matter which is not expressed or fixed anywhere.

[...]

64 The Claimants may consider themselves unlucky to have had their application for leave to serve out come before a Judge with at least some understanding of the technology involved here. However, since I identified the issue and have given the Claimants numerous opportunities to address it, I am unable to take what might be termed the 'easy' option and allow this claim to literary copyright to proceed. If, as I have found, there is no serious issue to be tried, I see no reason why any of the Defendants should be burdened with this particular claim. Counsel happened to mention that some of the Defendants might not defend the claim, giving rise to the prospect of the Claimants obtaining judgment in default against them. Again, in view of my conclusion, I see no reason why the Claimants should obtain a judgment in default on the claim for infringement of copyright in the Bitcoin File Format.

[...]

67 Consistent with my conclusion, I refuse permission to appeal. If the Court of Appeal disagrees, then the Claimants will obtain permission to appeal from that Court.

TL;DR

CW filed an appeal on the copyrights on the files used in the Bitcoin system/blockchain. The claim is based on forks that happened in Aug 2017 and Nov 2018. He says he owns copyrights to the Bitcoin database. The judge, who has some understanding of the technology involved, stated that such appeal can't be made as there isn't a clear structure in the blocks, as copyright can be claimed only when the object of judgement is clear in its structure. He used XML as an example: it is stated where the header starts and ends etc. CW can still appeal to the Court.

submitted by /u/reddito321
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