Bitcoin - COPA v Wright
 |
| Author Satoshi Nakamoto Source Wikimedia |
Chancery Division (Mr Justice Mellor) Crypto Open Patent Alliance v Wright [2024] EWHC 1198 (Ch) (20 May 2024)
Bitcoin was the world's first cryptocurrency, a digital currency that does not depend on a government, bank or other central institution to function. It is said to have been created by one Satoshi Nakamoto. Nobody knows the identity of that person or even whether that person is a single individual or a team. An Australian computer scientist called Craig Steven Wright ("Dr Wright") claims to be Satoshi Nakamoto but his claim has been disputed by an organization called the Crypto Open Patents Alliance ("COPA"). By an action instituted on 9 April 2023, COPA alleged that Dr Wright was not Sakamoto.
Other Proceedings
Dr Wright and two companies that he controlled called Wright International Investments Ltd. and Wright International Investments UK Ltd. responded by issuing passing-off proceedings against two sets of defendants. They also issued proceedings against BTC Core and 25 other defendants including COPA for infringement of database rights and copyright. At a case management conference on 15 June 2023, the court stayed the passing off actions until after Dr Wright's claim to be Satoshi Nakamoto had been decided. It also ordered the determination of the identity of Satoshi Nakamoto to be a preliminary issue in the database right and copyright infringement proceedings.
Other Proceedings
Dr Wright and two companies that he controlled called Wright International Investments Ltd. and Wright International Investments UK Ltd. responded by issuing passing-off proceedings against two sets of defendants. They also issued proceedings against BTC Core and 25 other defendants including COPA for infringement of database rights and copyright. At a case management conference on 15 June 2023, the court stayed the passing off actions until after Dr Wright's claim to be Satoshi Nakamoto had been decided. It also ordered the determination of the identity of Satoshi Nakamoto to be a preliminary issue in the database right and copyright infringement proceedings.
Identity of Satoshi Nakamoto
The issue was tried by Mr Justice Mellor on 23 dates between 5 Feb and 14 March 2024. His lordship handed down judgment in Crypto Open Patent Alliance v Wright [2024] EWHC 1198 (Ch) on 20 May 2024. At the end of the trial, the learned judge told the world that Dr Wright was not Satoshi Nakamoto. He set out the reasons for his announcement in his judgment.
Dr Wright's Claim
Dr Wright claimed to be the creator of Bitcoin and the author of Bitcoin: A Peer-to-Peer Electronic Cash System ("the Bitcoin White Paper") and the Bitcoin source code. In para [103] of his judgment, Mr Justice Mellor held that COPA bore the legal burden of proving that Dr Wright was not the author of that White Paper. However, he also held at para [105] that Dr Wright bore the burden of proving that he was Satoshi Nakamoto.
Summary
Mr Justice Mellor's judgment consists of 945 paragraphs and a 799-paragraph appendix on his findings regarding COPA's pleaded forgery allegations.
The case is summarized in the following sentence from paras [1] and [2]:
"[1] .................. Dr Wright also claims to be a person with a unique intellect, with numerous degrees and PhDs in a wide range of subjects, the unique combination of which led him (so it is said) to devise the Bitcoin system.
The case is summarized in the following sentence from paras [1] and [2]:
"[1] .................. Dr Wright also claims to be a person with a unique intellect, with numerous degrees and PhDs in a wide range of subjects, the unique combination of which led him (so it is said) to devise the Bitcoin system.
[2] Thus, Dr Wright presents himself as an extremely clever person. However, in my judgment, he is not nearly as clever as he thinks he is. In both his written evidence and in days of oral evidence under cross-examination, I am entirely satisfied that Dr Wright lied to the Court extensively and repeatedly. Most of his lies related to the documents he had forged which purported to support his claim. All his lies and forged documents were in support of his biggest lie: his claim to be Satoshi Nakamoto."
At para [11] the judge listed the factors in support of Dr Wright's claim to be Satoshi Nakamoto:
"11.1. His unique combination of skills, knowledge, qualifications and interests in various concepts which combined to result in the creation of Bitcoin.
11.2. The evidence from his business associates and family which is consistent with his claim (albeit largely circumstantial).
11.3. The evidence from the 'proof' sessions in 2016.
11.4. The very substantial body of evidence comprised in Dr Wright's own witness statements.
11.5. The content of his Reliance Documents which he emphasised was more significant than their metadata."
At para [11] the judge listed the factors in support of Dr Wright's claim to be Satoshi Nakamoto:
"11.1. His unique combination of skills, knowledge, qualifications and interests in various concepts which combined to result in the creation of Bitcoin.
11.2. The evidence from his business associates and family which is consistent with his claim (albeit largely circumstantial).
11.3. The evidence from the 'proof' sessions in 2016.
11.4. The very substantial body of evidence comprised in Dr Wright's own witness statements.
11.5. The content of his Reliance Documents which he emphasised was more significant than their metadata."
At para [13] his lordship set out the factors against Dr Wriight being Satoshi Nakamoto:
"13.1. First, the attributes and behaviour which one would expect Satoshi to exhibit and prove (on the assumption that he would set out to prove he was Satoshi - on which see below), and those he would not. Under this head, the principal points are:
13.1.1. First, Satoshi would be most unlikely to have any real difficulty in proving he was Satoshi. For example, he would be able to present some insight or knowledge from the very early materials which no-one but the creator of Bitcoin would know - perhaps something hidden in the Genesis block. Or he would have been able to transfer Bitcoin out of some of the very early blocks which are generally accepted to have been mined by Satoshi, to prove that he owned those Bitcoin. He would not have lost every private key to those early blocks.
13.1.2. Second, I do not believe that Satoshi would ever have resorted to forgery in his attempt to prove he was Satoshi. He would not have backdated documents or altered the clock on his computer(s), for the simple reason that there was and is no need for him to do so. (For completeness I add that, in the very unlikely event that he did engage in some forgery, upon that being discovered, he would own up and explain why it was he had been driven to forgery. He would not have engaged in yet more forgery or engaged in technobabble in his attempts to justify it).
13.1.3. Third, the contemporaneous materials written by Satoshi, including the White Paper, the posts and his email exchanges with individuals, convey an impression of a calm, knowledgeable, collaborative, precise person with little or no arrogance, willing to acknowledge and implement ideas and suggestions from others who had shown an interest in Bitcoin.
13.1.4. Fourth, due to his collaborative and non-confrontational nature, I consider it is most unlikely that Satoshi would ever have resorted to litigation against the Developers. Satoshi would have recognised that differences in views led to the hard forks in the Bitcoin Blockchain and moved on.
13.2. Second and by contrast, the attributes and behaviours which Dr Wright has exhibited and which were proved to my satisfaction in this Trial:
13.2.1. Dr Wright is an individual with some strong views about Bitcoin and details of its implementation. However, I was struck by the fact that all of his knowledge and supposed insights could well have been obtained by careful study of the publicly available materials relating to the early years of Bitcoin. In my judgment, in none of his evidence did he reveal any insight or knowledge unique to Satoshi.
13.2.2. Furthermore, in his evidence, Dr Wright made significant errors which Satoshi would never have made, even after this length of time. Some of these relate to Satoshi's interactions with individuals not previously made public. Others relate to technical matters which Dr Wright simply got wrong but which Satoshi would not have got wrong.
13.2.3. Dr Wright has had many years to prepare to prove that he was/is Satoshi. I have concluded (in the detailed findings I make below and in the Appendix) that, as he faced greater and more significant challenges to his claim, he took his lies and forgery to ever greater levels. I explain this in much greater detail below.
13.2.4. The picture painted by Dr Wright in his evidence was, in essence, that he was solely responsible for creating Bitcoin, that he was much cleverer than anyone else, that anyone who questioned his claim or his evidence was not qualified to do so or just didn't understand what he was saying. In my judgment, the arrogance he displayed was at odds with what comes through from Satoshi's writing. In short, in his writing and attitude Dr Wright just doesn't sound or act like Satoshi."
"13.1. First, the attributes and behaviour which one would expect Satoshi to exhibit and prove (on the assumption that he would set out to prove he was Satoshi - on which see below), and those he would not. Under this head, the principal points are:
13.1.1. First, Satoshi would be most unlikely to have any real difficulty in proving he was Satoshi. For example, he would be able to present some insight or knowledge from the very early materials which no-one but the creator of Bitcoin would know - perhaps something hidden in the Genesis block. Or he would have been able to transfer Bitcoin out of some of the very early blocks which are generally accepted to have been mined by Satoshi, to prove that he owned those Bitcoin. He would not have lost every private key to those early blocks.
13.1.2. Second, I do not believe that Satoshi would ever have resorted to forgery in his attempt to prove he was Satoshi. He would not have backdated documents or altered the clock on his computer(s), for the simple reason that there was and is no need for him to do so. (For completeness I add that, in the very unlikely event that he did engage in some forgery, upon that being discovered, he would own up and explain why it was he had been driven to forgery. He would not have engaged in yet more forgery or engaged in technobabble in his attempts to justify it).
13.1.3. Third, the contemporaneous materials written by Satoshi, including the White Paper, the posts and his email exchanges with individuals, convey an impression of a calm, knowledgeable, collaborative, precise person with little or no arrogance, willing to acknowledge and implement ideas and suggestions from others who had shown an interest in Bitcoin.
13.1.4. Fourth, due to his collaborative and non-confrontational nature, I consider it is most unlikely that Satoshi would ever have resorted to litigation against the Developers. Satoshi would have recognised that differences in views led to the hard forks in the Bitcoin Blockchain and moved on.
13.2. Second and by contrast, the attributes and behaviours which Dr Wright has exhibited and which were proved to my satisfaction in this Trial:
13.2.1. Dr Wright is an individual with some strong views about Bitcoin and details of its implementation. However, I was struck by the fact that all of his knowledge and supposed insights could well have been obtained by careful study of the publicly available materials relating to the early years of Bitcoin. In my judgment, in none of his evidence did he reveal any insight or knowledge unique to Satoshi.
13.2.2. Furthermore, in his evidence, Dr Wright made significant errors which Satoshi would never have made, even after this length of time. Some of these relate to Satoshi's interactions with individuals not previously made public. Others relate to technical matters which Dr Wright simply got wrong but which Satoshi would not have got wrong.
13.2.3. Dr Wright has had many years to prepare to prove that he was/is Satoshi. I have concluded (in the detailed findings I make below and in the Appendix) that, as he faced greater and more significant challenges to his claim, he took his lies and forgery to ever greater levels. I explain this in much greater detail below.
13.2.4. The picture painted by Dr Wright in his evidence was, in essence, that he was solely responsible for creating Bitcoin, that he was much cleverer than anyone else, that anyone who questioned his claim or his evidence was not qualified to do so or just didn't understand what he was saying. In my judgment, the arrogance he displayed was at odds with what comes through from Satoshi's writing. In short, in his writing and attitude Dr Wright just doesn't sound or act like Satoshi."
The judge added at para [14]:
The judgment is concerned mainly with issues of fact. The only legal issues were procedural. Because fraud and forgery had been alleged, his lordship considered the relevant principles in some detail.
Pleading
He reminded himself of the principles governing pleading and proof of fraud in paras [23] and [24] of Lord Justice Arnold's judgment in Sofer v Swissindependent Trustees SA [2020] EWCA Civ 699:
"[23] ........ (i) Fraud or dishonesty must be specifically alleged and sufficiently particularised, and will not be sufficiently particularised if the facts alleged are consistent with innocence: Three Rivers District Council v Governor and Company of the Bank of England (No.3) [2003] 2 AC 1.
(ii) Dishonesty can be inferred from primary facts, provided that those primary facts are themselves pleaded. There must be some fact which tilts the balance and justifies an inference of dishonesty, and this fact must be pleaded: Three Rivers at [186] (Lord Millett).
(iii) The claimant does not have to plead primary facts which are only consistent with dishonesty. The correct test is whether or not, on the basis of the primary facts pleaded, an inference of dishonesty is more likely than one of innocence or negligence: JSC Bank of Moscow v Kekhman [2015] EWHC 3073 (Comm) at [20]-[23] (Flaux J, as he then was).
(iv) Particulars of dishonesty must be read as a whole and in context: Walker v Stones [2001] QB 902 at 944B (Sir Christopher Slade).
[24] To these principles there should be added the following general points about particulars:
(i) The purpose of giving particulars is to allow the defendant to know the case he has to meet: Three Rivers at [185]-[186]; McPhilemy v Times Newspapers [1999] 3 All ER 775 at 793B (Lord Woolf MR).
(ii) When giving particulars, no more than a concise statement of the facts relied upon is required: McPhilemy at 793B.
(iii) Unless there is some obvious purpose in fighting over the terms of a pleading, contests over their terms are to be discouraged: McPhilemy at 793D."
"[23] ........ (i) Fraud or dishonesty must be specifically alleged and sufficiently particularised, and will not be sufficiently particularised if the facts alleged are consistent with innocence: Three Rivers District Council v Governor and Company of the Bank of England (No.3) [2003] 2 AC 1.
(ii) Dishonesty can be inferred from primary facts, provided that those primary facts are themselves pleaded. There must be some fact which tilts the balance and justifies an inference of dishonesty, and this fact must be pleaded: Three Rivers at [186] (Lord Millett).
(iii) The claimant does not have to plead primary facts which are only consistent with dishonesty. The correct test is whether or not, on the basis of the primary facts pleaded, an inference of dishonesty is more likely than one of innocence or negligence: JSC Bank of Moscow v Kekhman [2015] EWHC 3073 (Comm) at [20]-[23] (Flaux J, as he then was).
(iv) Particulars of dishonesty must be read as a whole and in context: Walker v Stones [2001] QB 902 at 944B (Sir Christopher Slade).
[24] To these principles there should be added the following general points about particulars:
(i) The purpose of giving particulars is to allow the defendant to know the case he has to meet: Three Rivers at [185]-[186]; McPhilemy v Times Newspapers [1999] 3 All ER 775 at 793B (Lord Woolf MR).
(ii) When giving particulars, no more than a concise statement of the facts relied upon is required: McPhilemy at 793B.
(iii) Unless there is some obvious purpose in fighting over the terms of a pleading, contests over their terms are to be discouraged: McPhilemy at 793D."
His lordship directed himself at [114] that:
"Overall, "pleading is not a game and it is about fairness and fairly understanding the case that has to be met, and points about whether a case has been adequately pleaded are to be looked at in that context": see National Bank Trust v Yurov [2020] EWHC 100 (Comm) at §249 and the cases there cited."
"Overall, "pleading is not a game and it is about fairness and fairly understanding the case that has to be met, and points about whether a case has been adequately pleaded are to be looked at in that context": see National Bank Trust v Yurov [2020] EWHC 100 (Comm) at §249 and the cases there cited."
Evidence - Importance of Documentation
Mr Justice Mellor referred to Lord Goff's observation in Armagas Ltd v Mundogas SA (The Ocean Frost) 1985 1 Lloyd's Rep 1 at page 57 that the courts have long recognized in cases of fraud the importance of testing the veracity of accounts "by reference to the objective facts proved independently of [witnesses'] testimony, in particular by reference to the documents in the case, and also to pay particular regard to their motives and to the overall probabilities." Citing paras [48] and [49] of Lord Justice's Males judgment in Simetra Global Assets Ltd v Ikon Finance Ltd [2019] 4 WLR 112 he noted that it had become commonplace in commercial litigation that contemporaneous documents "are generally regarded as far more reliable than the oral evidence of witnesses, still less their demeanour while giving evidence." He quoted para [22] of Mr Justice Leggatt's judgment in Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC 3560 (Comm):
"In the light of these considerations, the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses' recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose - though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth."
"In the light of these considerations, the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses' recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose - though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth."
As forgery had been alleged he added at [117]:
"In the circumstances of this case, it is important to point out that the Court must be satisfied that the purportedly contemporaneous documents are reliable. If any of the purportedly contemporaneous documents are alleged to be forged, these allegations add an extra layer of complexity to the assessment of the evidence."
"In the circumstances of this case, it is important to point out that the Court must be satisfied that the purportedly contemporaneous documents are reliable. If any of the purportedly contemporaneous documents are alleged to be forged, these allegations add an extra layer of complexity to the assessment of the evidence."
"[23]. ... Memory plays tricks on people. It is perfectly possible for an honest witness to have a firm memory of events which they believe to be true, but which in fact is not correct.
...
[30] Although Leggatt J's words have been sometimes taken as an encouragement to place no reliance on witness recollection, particularly when there is an abundance of reliable contemporaneous documentation, the Court of Appeal has confirmed that the assessment of the credibility of a witness' evidence should be a part of a single compendious exercise of finding the facts based on all of the available evidence; see Kogan v Martin [2019] EWCA Civ 1645 and Natwest Markets Plc, Mercuria Energy Europe Trading v Bilta (UK) Ltd (In Liquidation) [2021] EWCA Civ 680 at paragraphs 50 and 51.
[31] Each witness's evidence has to be weighed in the context of the reliably established facts (including those which can safely be distilled from contemporaneous documentation bearing in mind that the documentation itself may be unreliable or incomplete), the motives and biases in play, the possible unreliability or corruption of human memory and the inherent probabilities. Where there is reliable contemporaneous documentation, it will be natural to place weight on that. Where documents add little to the analysis, other secure footholds in the evidence need, if possible, to be found to decide whether it is more likely than not that the witness' memory is reliable or mistaken."
Expert Evidence
After referring to para [10] of New Media Distribution Co SEZC v Kagalovsky [2018] EWHC 2742 (Ch) and paras [5] to [15] of Glaxo Wellcome UK Ltd v Sandoz Ltd [2019] RPC 26, his lordship said that statements of fact should not be used to deliver expert evidence the admission of which is subject to proper safeguards. He noted that the Court may disallow opinion evidence put in witness statements though that would not prevent witnesses of fact from giving opinion evidence directly related to their factual evidence.
Noting para [34] of Whiting v First Keolis Transpennine Ltd [2018] EWCA Civ 4 the judge said that "where experts are agreed on a matter within their technical expertise, a judge will only rarely reject that evidence; and should not do so without applying considerable caution and giving adequate reasons"
He approved the following submissions on the legal principles regarding the preparation of expert evidence at para [121] of his judgment:
"[121.1]. In Imperial Chemical Industries Limited v Merit Merrell Technology Limited [2018] EWHC 1577, at [237], Fraser J reiterated that: 'The principles that govern expert evidence must be carefully adhered to, both by the experts themselves, and the legal advisers who instruct them.' He went on to set out examples of the application of the well-known principles in The Ikarian Reefer [1993] 2 Lloyds LR 68, the first being that 'expert evidence presented to the Court should be, and should be seen to be, the independent product of the expert uninfluenced as to form or content by the exigencies of litigation (Whitehouse v Jordan [1981] 1 WLR 246 at 256, per Lord Wilberforce)' (emphasis added), the second being that an expert should provide, to the court, independent assistance by way of "objective, unbiased opinion' as to matters in his area of expertise. This duty is echoed in paragraph 2.1 and 2.2 of Practice Direction 35:
'2.1 Expert evidence should be the independent product of the expert uninfluenced by the pressures of litigation.
2.2 Experts should assist the court by providing objective, unbiased opinions on matters within their expertise, and should not assume the role of an advocate.'
121.2. As stated by the editors of Phipson on Evidence, at 33-29: 'In some cases the expert expresses his views to the lawyer who prepares the first draft or outline of the report for the expert to review. Whilst this can be permissible if properly done, in most cases this should be avoided as it runs the risk that the expert's views may become influenced by the lawyer's own views.'
121.3. If an expert's report is found not to be compliant with the principles of independence or impartiality, there are a wide variety of sanctions available to the court. Typically, the court will either refuse to admit the evidence of the expert, or, more frequently, the matter will be taken into account when considering the weight to attach to that expert's evidence. {Expert Evidence: Law and Practice, 9-013; Phipson on Evidence, 33-78}."
"[121.1]. In Imperial Chemical Industries Limited v Merit Merrell Technology Limited [2018] EWHC 1577, at [237], Fraser J reiterated that: 'The principles that govern expert evidence must be carefully adhered to, both by the experts themselves, and the legal advisers who instruct them.' He went on to set out examples of the application of the well-known principles in The Ikarian Reefer [1993] 2 Lloyds LR 68, the first being that 'expert evidence presented to the Court should be, and should be seen to be, the independent product of the expert uninfluenced as to form or content by the exigencies of litigation (Whitehouse v Jordan [1981] 1 WLR 246 at 256, per Lord Wilberforce)' (emphasis added), the second being that an expert should provide, to the court, independent assistance by way of "objective, unbiased opinion' as to matters in his area of expertise. This duty is echoed in paragraph 2.1 and 2.2 of Practice Direction 35:
'2.1 Expert evidence should be the independent product of the expert uninfluenced by the pressures of litigation.
2.2 Experts should assist the court by providing objective, unbiased opinions on matters within their expertise, and should not assume the role of an advocate.'
121.2. As stated by the editors of Phipson on Evidence, at 33-29: 'In some cases the expert expresses his views to the lawyer who prepares the first draft or outline of the report for the expert to review. Whilst this can be permissible if properly done, in most cases this should be avoided as it runs the risk that the expert's views may become influenced by the lawyer's own views.'
121.3. If an expert's report is found not to be compliant with the principles of independence or impartiality, there are a wide variety of sanctions available to the court. Typically, the court will either refuse to admit the evidence of the expert, or, more frequently, the matter will be taken into account when considering the weight to attach to that expert's evidence. {Expert Evidence: Law and Practice, 9-013; Phipson on Evidence, 33-78}."
Inferences
Mr Justice Mellor directed himself that the Court may draw adverse inferences from a party's failure to deploy forms of evidence or proof that he or she could reasonably have been expected to adduce. He quoted the Court of Appeal's judgment in Wisniewski v Central Manchester Health Authority [1998] PIQR P324 at 340 that in appropriate cases "a court may be entitled to draw adverse inferences from the absence or silence of a witness who might be expected to have material evidence to give on an issue in the action" unless a credible reason is given for the witness's absence. He recalled that Lord Leggatt jad explained in Efobi v Royal Mail Group Ltd [2021] 1 WLR 3863 at para [41] that this was "a matter of ordinary rationality" and a feature of the process of a Court drawing inferences:"So far as possible, tribunals should feel free to draw, or to decline to draw, inferences from the facts of the case before them using their common sense without the need to consult law books when doing so. Whether any positive significance should be attached to the fact that a person has not given evidence depends entirely on the context and particular circumstances. Relevant considerations will naturally include such matters as whether the witness was available to give evidence, what relevant evidence it is reasonable to expect that the witness would have been able to give, what other relevant evidence there was bearing on the point(s) on which the witness could potentially have given relevant evidence, and the significance of those points in the context of the case as a whole."
Character and Credibility Evidence
After referring to various passages of Phipson, the judge reminded himself that evidence may be admissible "when it affects the weight of other evidence tendered, e.g. evidence that affects the credit of a witness" and that evidence of character may be admissible as directly relevant to factual issues in the case,
Hearsay
The judge reminded himself of the provisions of the Civil Evidence Act 1995.
Background
Between paras [21] and [24] he set out the early history of Bitcoin. From [25] to [42] he chronicled Dr Wright's career in Australia including the time when he first claimed to be Satoshi Nakamoto. Para [43] lists various incidents that took place after Dr Wright had moved to the UK in which he attempted to assert his claim. Paras [43] to [46] discuss various legai proceedings around the world relating to that claim.
Dr Wright's Witnesses of Fact
Para [131] listed Dr Wright's witness statements. Paras [132] to [165] discussed his cross-examination, The judge said at [165] that he was unable to place any reliance on what Dr Wright had said unless it was self-evidently correct or was corroborated by some other piece of evidence on which he could place reliance. Dr Wright's other witnesses of fact were considered between [166] and [248]. Overall, he was able to place very little weight on the beliefs expressed by these witnesses (whether individually or collectively) that Dr Wright was Satoshi Nakamoto, principally because none of them had enough specific information to be able to express anything like a persuasive or definitive view. COPA's Witnesses of Fact
The judge reviewed the cross-examination of COPA's witnesses between [251] and [269] and the statements of witnesses who were not called between [270] and [274]. He also discussed evidence admitted under Civil Evidence Act 1995 notices. In general, he accepted their evidence.
Expert witnesses
Experts were called on autism spectrum disorder, cryptocurrency matters and forensic document analysis.
According to para [68] a report on Dr Wright's disorder was served on 8 Sep 2023. Following evidence from COPA's expert a meeting took place between the parties' experts. They agreed that Dr Wright suffered from the disorder and that certain adjustments should be made to help him give evidence. Then judge made an order to that effect which he mentioned at [129].
His lordship considered the evidence on cryptocurrency between [283] and [294]. He discussed the technical issues between [307] and [336].
He addressed COPA's expert evidence on forensic document analysis between [295] and [306] and COPA's allegations that Dr Wright forged documents to support his case between [337] and [341]. Dr Wright criticized the independence of COPA's expert and the reliability of his report between [359] and [396]. The judge rejected those allegations. He considered Dr Wright's answers to COPA's allegations of forgery which the judge found unconvincing. In particular, he rejected Dr Wright's assertion that he had written the Bitcoin White Paper in LaTeX. He concluded at [561] that "the Bitcoin White Paper was produced by Satoshi Nakamoto in OpenOffice 2.4 and exported as a PDF. In my judgment, Dr Wright's elaborate attempt to carve an alternative narrative by forging documents in LaTeX mark him as a fraud and his claim in these proceedings as a fraudulent claim."
The Bitcoin Source Code
For most of the remainder of his judgment, Mr Justice Mellor considered assertions made by Dr Wright in his first witness statement and compared them with the countervailing evidence. Those assertions covered
- A - Dr Wright; 's skills, knowledge and experience
- B - his alleged investment in the evolution of digital cash systems:
- C - his precursor work and discussion
- D - drafting and sharing the Bitcoin White Paper
- E - his claim to have written the Bitcoin source code in C++
- F - the launch of Bitcoin
- G- further circumstantial evidence post-dating the publication of the White Paper
- H - patent research and development
- I - private proof sessions, and
- J - public proof sessions.
His lordship concluded at para [928]:
"Having (a) reached conclusions on COPA's allegations of forgery, (b) accepted the remaining allegations of inauthenticity which, as far as I am aware, cover Dr Wright's Reliance Documents, (c) not had my attention drawn to any other documents which appear to support Dr Wright's claim and which can be considered reliable, (d) considered the largely circumstantial evidence from the witnesses of fact called to support Dr Wright's case, (e) considered the evidence given in Dr Wright's own witness statements and (f) considered all the evidence adduced by COPA and the Developers, the case that Dr Wright is not Satoshi Nakamoto is overwhelming."
Relief
In addition to announcing that Dr Wright was not Satoshi Nakamoto Mr Justice Mellor indicated that he was minded to make the following declaration:
"First, that Dr Wright is not the author of the Bitcoin White Paper.
Second, Dr Wright is not the person who adopted or operated under the pseudonym Satoshi Nakamoto in the period between 2008 and 2011.
Third, Dr Wright is not the person who created the Bitcoin system.
Fourth, Dr Wright is not the author of the initial versions of the Bitcoin Software."
Dr Wright's counsel referred his lordship to para [78] of Mrs Justice Cockerill's judgment in BNP Paribas SA v Trattamento Rifiuti Metropolitani SpA [2020] EWHC 2436 (Comm):
"'i) The touchstone is utility;
ii) The deployment of negative declarations should be scrutinised and their use rejected where it would serve no useful purpose;
iii) The prime purpose is to do justice in the particular case;
iv) The Court must consider whether the grant of declaratory relief is the most effective way of resolving the issues raised. In answering that question, the Court should consider what other options are available to resolve the issue;
v) This emphasis on doing justice in the particular case is reflected in the limitations which are generally applied. Thus:
a) The court will not entertain purely hypothetical questions. It will not pronounce upon legal situations which may arise, but generally upon those which have arisen.
b) There must in general, be a real and present dispute between the parties before the court as to the existence or extent of a legal right between them.
c) If the issue in dispute is not based on concrete facts the issue can still be treated as hypothetical. This can be characterised as "the missing element which makes a case hypothetical.
"First, that Dr Wright is not the author of the Bitcoin White Paper.
Second, Dr Wright is not the person who adopted or operated under the pseudonym Satoshi Nakamoto in the period between 2008 and 2011.
Third, Dr Wright is not the person who created the Bitcoin system.
Fourth, Dr Wright is not the author of the initial versions of the Bitcoin Software."
Dr Wright's counsel referred his lordship to para [78] of Mrs Justice Cockerill's judgment in BNP Paribas SA v Trattamento Rifiuti Metropolitani SpA [2020] EWHC 2436 (Comm):
"'i) The touchstone is utility;
ii) The deployment of negative declarations should be scrutinised and their use rejected where it would serve no useful purpose;
iii) The prime purpose is to do justice in the particular case;
iv) The Court must consider whether the grant of declaratory relief is the most effective way of resolving the issues raised. In answering that question, the Court should consider what other options are available to resolve the issue;
v) This emphasis on doing justice in the particular case is reflected in the limitations which are generally applied. Thus:
a) The court will not entertain purely hypothetical questions. It will not pronounce upon legal situations which may arise, but generally upon those which have arisen.
b) There must in general, be a real and present dispute between the parties before the court as to the existence or extent of a legal right between them.
c) If the issue in dispute is not based on concrete facts the issue can still be treated as hypothetical. This can be characterised as "the missing element which makes a case hypothetical.
vi) Factors such as absence of positive evidence of utility and absence of concrete facts to ground the declarations may not be determinative; Zamir and Woolf note that the latter "can take different forms and can be lacking to differing degrees". However, where there is such a lack in whole or in part the court will wish to be particularly alert to the dangers of producing something which is not only not utile, but may create confusion."
He also directed the judge to the following extract from Lord Diplock's speech in Gouriet v Union of Post Office Workers [1978] AC 435 which he argued was consistent with subparagraph (v) of Mrs Justice Cockerill's judgment:
"...The only kinds of rights with which courts of justice are concerned are legal rights; and a court of civil jurisdiction is concerned with legal rights only when the aid of the court is invoked by one party claiming a right against another party, to protect or enforce the right or to provide a remedy against that other party for infringement of it, or is invoked by either party to settle a dispute between them as to the existence or nature of the right claimed. So for the court to have jurisdiction to declare any legal right it must be one which is claimed by one of the parties as enforceable against an adverse party to the litigation, either as a subsisting right or as one which may come into existence in the future conditionally on the happening of an event ...
... the jurisdiction of the court is not to declare the law generally or to give advisory opinions; it is confined to declaring contested legal rights, subsisting or future, of the parties represented in the litigation before it and not those of anyone else."'
Dr Wright's counsel submitted that the court should not make the above declaration for the following reasons:
"934.1. First, the declaration that Dr Wright is not the author of the Bitcoin White Paper. He characterised this as an answer to a purely academic question which did not engage any legal right or interest of COPA 'not least because COPA does not claim to have authored the Bitcoin White Paper'.
934.2. Second, the declaration that Dr Wright is not the owner of copyright in the Bitcoin White Paper. Lord Grabiner KC submitted this declaration would have no practical utility going beyond the consequences of a Judgment determining the Identity Issue against Dr Wright and would be wholly unnecessary.
934.3. Third, a declaration that any use by COPA of the Bitcoin White Paper will not infringe any copyright owned by Dr Wright, which Lord Grabiner KC submitted would be entirely redundant.
934.4. In his oral submissions, Lord Grabiner KC also addressed the declaration which would arise out of my formulation of the Identity Issue, namely that Dr Wright is or is not Satoshi Nakamoto. I understood him to submit that I could make a declaration in his favour: that Dr Wright is Satoshi Nakamoto, but that it was not seriously arguable that I could make a declaration to the opposite effect: that Dr Wright is not Satoshi Nakamoto."
"...The only kinds of rights with which courts of justice are concerned are legal rights; and a court of civil jurisdiction is concerned with legal rights only when the aid of the court is invoked by one party claiming a right against another party, to protect or enforce the right or to provide a remedy against that other party for infringement of it, or is invoked by either party to settle a dispute between them as to the existence or nature of the right claimed. So for the court to have jurisdiction to declare any legal right it must be one which is claimed by one of the parties as enforceable against an adverse party to the litigation, either as a subsisting right or as one which may come into existence in the future conditionally on the happening of an event ...
... the jurisdiction of the court is not to declare the law generally or to give advisory opinions; it is confined to declaring contested legal rights, subsisting or future, of the parties represented in the litigation before it and not those of anyone else."'
Dr Wright's counsel submitted that the court should not make the above declaration for the following reasons:
"934.1. First, the declaration that Dr Wright is not the author of the Bitcoin White Paper. He characterised this as an answer to a purely academic question which did not engage any legal right or interest of COPA 'not least because COPA does not claim to have authored the Bitcoin White Paper'.
934.2. Second, the declaration that Dr Wright is not the owner of copyright in the Bitcoin White Paper. Lord Grabiner KC submitted this declaration would have no practical utility going beyond the consequences of a Judgment determining the Identity Issue against Dr Wright and would be wholly unnecessary.
934.3. Third, a declaration that any use by COPA of the Bitcoin White Paper will not infringe any copyright owned by Dr Wright, which Lord Grabiner KC submitted would be entirely redundant.
934.4. In his oral submissions, Lord Grabiner KC also addressed the declaration which would arise out of my formulation of the Identity Issue, namely that Dr Wright is or is not Satoshi Nakamoto. I understood him to submit that I could make a declaration in his favour: that Dr Wright is Satoshi Nakamoto, but that it was not seriously arguable that I could make a declaration to the opposite effect: that Dr Wright is not Satoshi Nakamoto."
The learned judge rejected those submissions for the following reasons:
"[935]. In considering these submissions, the first point to note is that this case has changed somewhat since it was first pleaded. In particular, this Trial of the Identity Issue has been the trial of a preliminary issue in the BTC Core Claim where the Developers and various members of COPA are sued by Dr Wright and two of his companies for infringement of copyright in the Bitcoin White Paper - the key point being that a copy of the Bitcoin White Paper is in the Bitcoin Blockchain, which, as I understand matters, is reproduced by every node. Furthermore, it is appropriate to keep in mind that in the BTC Core claim, Dr Wright is claiming database right in various manifestations of the Bitcoin Blockchain and, furthermore, the Kraken and Coinbase Defendants (to the passing off claims made against them in those actions) have agreed to be bound by the outcome of this Trial, those actions being stayed in the meantime. In mentioning these matters I am not changing the issue which is the subject of this Trial. The debate here is over what declarations would have utility in the circumstances which now present themselves. In this regard, Mr Hough KC for COPA also reminded me of the various claims for defamation which Dr Wright has brought against various people who have said or implied he is not Satoshi.
[936] Second, it is clear, in my judgment, that in these circumstances COPA does not need a competing claim to be the author of the Bitcoin White Paper for a declaration that Dr Wright is not the author of it to have utility or to remove it from the realm of academic questions.
[937]. Third, in view of the extremely unpleasant threats which Dr Wright has made in the past against some of the individual Developers in particular, I was minded to make declarations to ensure that Dr Wright would not have any possible basis on which to threaten them with copyrights or database rights stemming from the work done by Satoshi Nakamoto.
[938] Fourth, I found Lord Grabiner KC's submission to the effect that I should not grant any declaration to the effect that Dr Wright is not Satoshi Nakamoto (in the event that I so concluded) somewhat surprising, bearing in mind the huge effort and costs which have been expended on all three sides debating that very issue."
"[935]. In considering these submissions, the first point to note is that this case has changed somewhat since it was first pleaded. In particular, this Trial of the Identity Issue has been the trial of a preliminary issue in the BTC Core Claim where the Developers and various members of COPA are sued by Dr Wright and two of his companies for infringement of copyright in the Bitcoin White Paper - the key point being that a copy of the Bitcoin White Paper is in the Bitcoin Blockchain, which, as I understand matters, is reproduced by every node. Furthermore, it is appropriate to keep in mind that in the BTC Core claim, Dr Wright is claiming database right in various manifestations of the Bitcoin Blockchain and, furthermore, the Kraken and Coinbase Defendants (to the passing off claims made against them in those actions) have agreed to be bound by the outcome of this Trial, those actions being stayed in the meantime. In mentioning these matters I am not changing the issue which is the subject of this Trial. The debate here is over what declarations would have utility in the circumstances which now present themselves. In this regard, Mr Hough KC for COPA also reminded me of the various claims for defamation which Dr Wright has brought against various people who have said or implied he is not Satoshi.
[936] Second, it is clear, in my judgment, that in these circumstances COPA does not need a competing claim to be the author of the Bitcoin White Paper for a declaration that Dr Wright is not the author of it to have utility or to remove it from the realm of academic questions.
[937]. Third, in view of the extremely unpleasant threats which Dr Wright has made in the past against some of the individual Developers in particular, I was minded to make declarations to ensure that Dr Wright would not have any possible basis on which to threaten them with copyrights or database rights stemming from the work done by Satoshi Nakamoto.
[938] Fourth, I found Lord Grabiner KC's submission to the effect that I should not grant any declaration to the effect that Dr Wright is not Satoshi Nakamoto (in the event that I so concluded) somewhat surprising, bearing in mind the huge effort and costs which have been expended on all three sides debating that very issue."
The judge deferred granting injunctive relief until a further hearing on the consequences of his judgment,
Further Information
Anyone wishing to discuss this case note may call me on 020 7404 5252 during UK office hours or send me a message through my contact page,
Comments