UK Court of Appeal rules Craig Wright’s copyright claim over Bitcoin file format can proceed

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Dr. Craig Wright notched another win in the United Kingdom’s Court of Appeal today, as the court granted Dr. Wright’s appeal over his copyright in the Bitcoin file format. As a result, his copyright and database rights case against the BTC partnership—which includes Core developers and entities within the ecosystem such as Coinbase (NASDAQ: COIN)—will proceed on all fronts.

Dr. Wright had originally sued the BTC partnership which includes 26 defendants all of whom are involved in the use or promotion of the BTC network, arguing that the two airdrops which effectively carved out the BTC network from the original Bitcoin were breaches of his copyright in the Bitcoin white paper and the Bitcoin file format, and had additionally amounted to breaches of his database rights in the Bitcoin blockchain. Given how much of the industry went on to revolve around this new BTC, a finding that its creation was a breach of Dr. Wright’s rights has the potential to alter the digital asset industry forever.

The High Court allowed the suit to be served on the defendants with respect to the copyright claim in the white paper and the database rights claim in the Bitcoin blockchain. However, the judge found that there was no serious issue to be tried in respect of the Bitcoin file format claim, finding that the Bitcoin file format was not defined with sufficient precision and objectivity in order to be subject to copyright—a requirement known as ‘fixation.’

Today, the court of appeal unanimously overruled the lower court. They found that the lower judge had ‘several flaws’ in his reasoning, beginning with the finding that Dr. Wright had failed to identify any relevant ‘work’ which defines the structure of the Bitcoin file format:

“The work Dr. Wright relies upon, the Bitcoin File Format, has been clearly identified. The question of how and when that work was fixed is a different one. Dr. Wright’s case is that the work was fixed when the first block in the Bitcoin blockchain was written on 3 January 2009.”

The Court of Appeal went on to say that there was no requirement that there be additional content defining or describing the format in order for ‘fixation’ to be established. They agreed with Dr. Wright’s argument—which was rejected by the lower court—that third parties have been able to deduce the structure comprising the Bitcoin file format from the blockchain and thus proved that the work was identifiable with sufficient precision and objectivity.

The Court of Appeal’s judgment is a powerful one. Though the Justices were only considering whether Dr. Wright’s claim had a serious prospect of success, the ruling nonetheless amounts to an encouraging rubberstamp from the second-highest court in the country. Now, all three limbs of Dr. Wright’s lawsuit against the BTC partnership will be in play when the case eventually goes to trial. All 26 BTC Core defendants will have to defend against the claim that they breached Dr. Wright’s copyright in the Bitcoin white paper; that they breached his copyright in the Bitcoin file format; and that they breached his rights in the Bitcoin database.