The issue arose pre-trial, in the context of an application by Dr Wright for permission to serve proceedings outside of the jurisdiction. To obtain permission it was not necessary for Dr Wright to demonstrate that copyright does, in fact, subsist in the Bitcoin file format, but instead that there was a real prospect of successfully establishing that fact at trial. At first instance, the court did not agree there was a real prospect but this was overturned on appeal.

The Bitcoin file format

The Bitcoin system is made up of a series (or chain) of digital files (or blocks) that record information specific to transactions of the digital currency, Bitcoin. The information in each digital file must be recorded in a specific format. Dr Wright claims that copyright exists in the format/structure of those digital files, that is in the Bitcoin file format.

High Court decision

The judge at first instance was in “no doubt” as to the structure of the Bitcoin file format. The major issue, as the judge saw it, was that the Bitcoin file format had not been recorded, defined or set out in a material form.

Dr Wright argued that the Bitcoin file format was defined when the Bitcoin system was run and digital files were created in that format. From those files, the Bitcoin file format was identifiable.
However, the judge deemed that the files created in that format simply reflected the Bitcoin file format, they did not in themselves define the Bitcoin file format. As such, his view was that in copyright terms, there was no “fixation” of the Bitcoin file format, and so there was no identifiable “work” in which copyright could subsist.

Appeal

The fundamental issue on which the Court of Appeal differed from the High Court was whether the Bitcoin file format had to be separately defined (for example, in a standalone template setting out the file structure) in order for there to be fixation, and so for copyright to potentially subsist. The short answer is no.

While the structure must be fixed, “it does not necessarily follow that content defining (or describing or indicating) the structure is required in order to fix it. All that is required is that the structure be completely and unambiguously recorded” (emphasis added).

The running of the Bitcoin system, and so the reading and writing of files in the Bitcoin file format, could fulfil that requirement. Evidence submitted by Dr Wright also supported that conclusion, as it demonstrated that third parties had been able to deduce the Bitcoin file format from looking at digital files in the Bitcoin system.

The consequences of this are two-fold:

• the Bitcoin file format could exist as a “work” capable of copyright protection; and
• the Bitcoin file format was identifiable with sufficient precision and objectivity, so that the scope of copyright protection it enjoyed could be understood by the proprietor and third parties.

In short

These judgments provide useful clarification on the “fixation” requirement in copyright law under English law. It is important to remember, however, that the Court of Appeal judgment only goes so far as to say that Dr Wright has a real prospect of succeeding at trial on the argument that copyright subsists in the Bitcoin file format. That is a relatively low bar. The Court of Appeal expresses reservations about whether the Bitcoin file format could meet the test for copyright subsistence. In particular, where the Bitcoin file format is potentially only differentiated from other file formats because of technical considerations, does it meet the originality test? The conclusions at trial could provide welcome clarification on copyright subsistence in the context of databases and computer programmes.