Bit by Bit: Copyright in the Bitcoin blockchain

Bitcoin is the first and most well-known cryptocurrency, and is based on the technology known as blockchain. Blockchain acts as a decentralised public ledger storing digital transactions in the form of blocks in chronological order.

In July of this year, an appeal of an order of the High Court was allowed regarding an alleged copyright infringement of the Bitcoin file format (read the preliminary judgment here). The Bitcoin file format is a file format used to determine the format of every block on the Bitcoin blockchain.

Dr Craig Wright, the Appellant in this case, claims to be the original creator of the Bitcoin source code and publisher of the infamous Bitcoin white paper entitled “Bitcoin: A Peer-to-Peer Electronic Cash System” which was published under the mysterious pseudonym Satoshi Nakamoto. Dr Wright claims copyright in the Bitcoin file format, the Bitcoin white paper, and three associated Bitcoin blockchain databases.

One key requirement for copyright subsistence is referred to as the “fixation requirement”. In other words, in order for copyright to subsist, the work must be recorded in writing or otherwise. The High Court found that the creation of the genesis block back on the 3rd January 2009, which was created in accordance with the relevant file format, did not satisfy this requirement because the copyrighted work itself had not been identified.

In a preliminary hearing, the Court of Appeal found that the High Court had confused the fixation requirement with the work itself, and that Dr Wright had successfully identified the work - identified as the Bitcoin file format. The case has therefore been allowed to proceed to appeal. However, Dr Wright will need to establish how and when the Bitcoin file format was recorded in order for a successful claim.

In recent years, blockchain technology has emerged as one of the fastest growing digital innovations. While some question the value of digital tokens as currency or otherwise, there are undoubtedly valid and useful applications of this still emerging technology. It follows therefore that intellectual property for blockchain technology is widely sought.

When considering which form of IP protection to rely upon, it is important to understand that copyright may not be used to protect ideas, procedures, or methods of operation. In relation to Dr Wright’s claim, this means that the general concept of blockchain, as described in the Bitcoin white paper, may not be protected under the law of copyright. Dr Wright’s case also highlights the condition that copyrighted work must be precisely and objectively identifiable, which could in certain circumstances be difficult to achieve.

When compared to copyright, patents are capable of providing broader protection for inventive concepts such as blockchain. It is interesting to contemplate how blockchain would have evolved if the notional Satoshi Nakamoto had filed for patent protection prior to publication of their infamous white paper. For example, would the technology have flourished and matured sooner due to an increased commercial interest?