Wright & Ors v BTC Core & Ors: Establishing Fixation in Digital Formats under UK Copyright Law

Introduction

The case of Wright & Ors v BTC Core & Ors ([2023] EWCA Civ 868) presented a pivotal moment in UK copyright law concerning the protection of digital formats. Dr. Craig Wright, claiming to be the creator of Bitcoin under the pseudonym Satoshi Nakamoto, sought to enforce copyrights over the "Bitcoin File Format" against actions he perceived as infringing his intellectual property rights. The initial ruling by Mellor J in the High Court denied Wright permission to serve claims on defendants outside the jurisdiction regarding copyright infringement. However, upon appeal, the Court of Appeal found significant grounds to overturn the initial decision. This commentary delves into the intricacies of the case, the legal principles applied, and its broader implications for digital copyrights.

Summary of the Judgment

The crux of the case revolved around whether the "Bitcoin File Format" qualifies for copyright protection under the Copyright, Designs and Patents Act 1988, specifically under the requirements of fixation and originality. The High Court judge ruled that Wright failed to demonstrate that the Bitcoin File Format was "fixed" in a material form, a prerequisite for copyright subsistence. This decision was primarily influenced by the interpretation of fixation requirements and the relationship between the technical structure of digital formats and intellectual creation.

On appeal, the Court of Appeal identified procedural and substantive errors in the High Court's reasoning. Notably, the appellate court emphasized that Wright had a genuine prospect of proving that the Bitcoin File Format was sufficiently fixed and original to warrant copyright protection. Consequently, the appeal was allowed, permitting Wright to proceed with serving claims outside the UK jurisdiction on this basis.

Analysis

Precedents Cited

The judgment extensively referenced several key precedents that shaped the court’s interpretation of fixation and originality in copyright law:

SAS Institute Inc v World Programming Ltd (SAS v WPL): This case clarified the boundaries of copyright protection in computer programs, distinguishing between functional elements and expressive content.
Levola Hengelo BV v Smilde Foods BV: Established that for a subject matter to qualify as a "work," it must not only be original but also identifiable with precision and objectivity.
Infopaq International A/S v Danske Dagblades Forening: Reinforced that the protection of copyright extends to works that are original in the sense of being the author’s own intellectual creation.

These precedents collectively underscored the necessity for works to exhibit a personal creative touch and be fixed in a material form to qualify for copyright protection.

Legal Reasoning

The appellate court scrutinized the High Court’s interpretation of fixation under section 3(2) of the Copyright, Designs and Patents Act 1988. The original judge had conflated the "work" with its "fixation," erroneously asserting that no work defining the Bitcoin File Format had been identified. The Court of Appeal corrected this by delineating the distinction between the existence of a work and its fixation.

Key points in the appellate reasoning included:

Distinction Between Work and Fixation: The appellate court emphasized that the Bitcoin File Format as a work was distinct from its fixation. The fixation pertains to the manner and form in which the work is recorded, not the content defining its structure.
Application of Levola Criteria: The court applied the two-fold test from Levola, ensuring that the work was both original and sufficiently identifiable.
Purpose of Fixation Requirement: Highlighted that fixation serves to evidence the existence of a work and delimit its scope, thereby facilitating legal certainty and protection boundaries.

By properly applying these principles, the Court of Appeal concluded that Wright had a real prospect of satisfying the fixation requirement, thus overturning the initial refusal.

Impact

The decision in Wright v BTC Core has significant implications for the protection of digital formats and structures under UK copyright law:

Enhanced Protection for Digital Structures: Recognizes that complex digital formats, like blockchain structures, may qualify for copyright protection if proven to be original and fixed.
Clarification of Fixation and Originality: Provides a clearer framework for distinguishing between the functional aspects of technology and their protectable artistic expressions.
Precedential Value: Sets a precedent for future cases involving digital formats, software structures, and other intangible works, potentially broadening the scope of copyright protection.
Influence on International Jurisprudence: Aligns UK case law more closely with international standards set by agreements like the Berne Convention and TRIPS, particularly concerning the fixation and originality of digital works.

Furthermore, the judgment underscores the importance of meticulous presentation of evidence, especially in demonstrating the fixation and originality of complex digital formats, essential for establishing copyright subsistence.

Complex Concepts Simplified

Fixation

            Fixation refers to the process by which a work is captured in a tangible medium, from which it can be perceived, reproduced, or otherwise communicated. In copyright law, a work must be fixed to qualify for protection. This means it must be recorded in some form, such as written, electronic, or otherwise, that can be perceived either directly or with the aid of a machine or device.
        

Originality

            Originality in copyright terms requires that a work must be the author's own intellectual creation. This doesn't mean that the work must be novel or unique in the broader sense but must demonstrate some degree of creativity or personal touch from the author.
        

Lex Specialis

            A legal rule is considered lex specialis when it is a more specific law that overrides general law in specific cases. In this context, the Software Directive is a lex specialis compared to the Information Society Directive, meaning the former takes precedence when addressing matters pertaining to computer programs.
        

Intellectual Creation

            An intellectual creation refers to a work that originates from the author's intellectual efforts. It involves the author's unique contribution to the work, distinguishing it from mere mechanical or functional elements.
        

Blockchain and Bitcoin File Format

            The Bitcoin File Format refers to the specific structure and data organization within each block of the Bitcoin blockchain. This includes elements like the block header, transaction counts, and transaction data, all of which are integral to the functioning and security of the blockchain.
        

Conclusion

The appellate decision in Wright & Ors v BTC Core & Ors marks a significant advancement in the realm of digital copyright protection. By affirming that the Bitcoin File Format may satisfy the requirements of fixation and originality, the court has potentially broadened the scope of copyright to encompass complex digital structures. This not only fortifies the rights of creators in the digital space but also sets a robust legal foundation for future technological innovations. However, it also underscores the necessity for precise and thorough evidence in demonstrating both the fixation and the creative attributes of digital works. As technology continues to evolve, this case serves as a foundational reference point for the ongoing dialogue between intellectual property law and digital innovation.

Wright v BTC Core: Establishing Fixation in Digital Formats under UK Copyright Law