For the past few years, in my spare time I have been working on oppositions against three European patents granted to nChain Licensing AG, each of which originated from GB priority applications filed in April 2016. Each patent named Craig Wright and fellow Australian Stephane Savanah as co-inventors. For those few people who may still be unaware, Wright has since 2015 been falsely and fraudulently claiming to be the person behind the pseudonym Satoshi Nakamoto, the creator of Bitcoin. Wright's implausible, and easily disprovable, claims were disputed in late 2015 almost as soon as they became public through engineered leaks to the press. It was, however, only after several lengthy, and extremely costly, legal battles involving many others (including myself), that his claims were finally and comprehensively demolished by Mr Justice Mellor in a mammoth judgment handed down on 20 May 2024 (Crypto Open Patent Alliance v Craig Steven Wright [2024] EWHC 1198). The judgment was appealed by Wright, but permission was denied by Lord Justice Arnold in, for him, an unusually brief 3 page judgment issued on 29 November 2024. There are further strands to the Craig Wright story, including a contempt of court finding, alleged tax fraud in both the UK and his native Australia and a likely upcoming criminal prosecution for perjury, but here is not the place to go into them.
Going back to the beginning, the company nChain was set up in 2016 by Wright and his business partner Stefan Matthews, with help from Canadian businessman Robert MacGregor, and enabled by substantial financial backing from Antiguan-based Canadian online gambling tycoon Calvin Ayre. The stated business aim of the company was to patent and commercialise inventions arising from Wright's alleged extensive knowledge of Bitcoin and related technology by virtue of his being Satoshi. As explained in the 2016 article by Andrew O'Hagan, "The Satoshi Affair":
They would complete the work on his inventions and patent applications – he appeared to have hundreds of them – and the whole lot would be sold as the work of Satoshi Nakamoto, who would be unmasked as part of the project. Once packaged, Matthews and MacGregor planned to sell the intellectual property for upwards of a billion dollars. MacGregor later told me he was speaking to Google and Uber, as well as to a number of Swiss banks. ‘The plan was to package it all up and sell it,’ Matthews told me. ‘The plan was never to operate it.’
Even at that time, it was evident to anyone who took the time to look into the matter that Wright was clearly not Satoshi but was a rather inept forger with a particular talent for bare-faced lies. Some, however, apparently remained persuaded (or perhaps were willing to go along with the lies for their own reasons), including Mr Ayre who continued to fund Wright's Satoshi project on the promise of a big payout in the future, not only in respect of the supposedly valuable patentable Satoshi inventions but also on some very large stashes of Bitcoin that Wright
claimed to own and which were apparently used as collateral.
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nChain GB filings 2016-2024 |
So, after having conveniently departed Australia in October 2015 following a raid by the Australian Tax Office, Wright began working as Chief Scientist for nChain in his new base in London to get his supposed inventions patented. Wright was also incentivised by getting a substantial share in the company. The patent filings started flowing in to the UK IPO, the
first one being filed on 23 February 2016 in the name of EITC Holdings Limited (later assigned to nChain). 76 applications in total were filed in 2016 and applications continued to be filed at a similar rate each year right up to the end of 2023, at which point they appear to have come to an abrupt and almost complete halt.
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Wright and friend (not a patent attorney) |
Wright, of course, did not do this all by himself but was assisted by people who supposedly knew what they were doing with preparing and prosecuting patent applications. We would normally term these people patent attorneys but I am reluctant to do so in this case because, as it turns out, the main person involved in preparing and filing Wright's applications, at least in the early days, was not actually a patent attorney. She was instead a fairly recently graduated computer scientist PhD with a few years' experience working with patents but had not yet passed the UK examinations. Wright, however, got on
very well with her and continued to employ her services right up until at least last year, even though she has still not passed the UK exams. Although the inventions themselves may not have been of the highest quality given their provenance, it certainly did not help that they were turned into patent applications that, at least to some extent, were somewhat handicapped by fairly poor drafting. As it turns out, one of the cases was also not helped during prosecution by some poor handling by others leading up to it being granted.
I started looking into Wright's patenting activities in around 2020 and first wrote about them
here in February 2021, noting that nChain had already built up a substantial patent portfolio with over 300 priority filings, which then resulted in other filings that were prosecuted more widely in other jurisdictions, including at the European Patent Office. At the time I wondered about their technical relevance, given that Wright's relevant knowledge was clearly not going to be important or relevant for any developments in Bitcoin or related technologies. Nevertheless, nChain was already demonstrating that whatever strategy was being used was starting to bear fruit, with patents being granted by the EPO. Many of these patents appeared to me, based on a limited review, to be examples of what I termed '
cargo cult patenting', as they appeared to contain overly technical-sounding, and sometimes lengthy, claims that were able to get through the examination process but which were highly unlikely to be infringed by anyone. It appeared, however, to be mainly a numbers game at that point, where the number of patents being granted was the main aim and not whether the patents covered anything actually useful. The reasoning may well have been that, if a sufficiently large patent portfolio could be built up, it would almost inevitably be considered worth a lot of money to someone and would then be bought up by a big player in the field who wanted to get a position in this up and coming blockchain technology area. It almost didn't matter what the patents covered, as long as they sounded sufficiently technical and their importance could be
puffed up by Wright with his brash salesman bravado. After all,
Theranos managed to do something similar, at least for a while.
As a result of the technical obfuscation technique used to get many of their patents through the system, the prospects of finding any of the patents that might be a good enough target for opposing seemed to me unlikely. A particular group of applications, however, came to my attention that were an example of one of Wright's nonsense ideas, which was that Bitcoin could be made "
Turing complete". How this was possible when the language used to run Bitcoin transaction scripts did not allow for loops was at the time unclear to anyone actually knowledgeable in the field, but Wright continued (and still continues) to insist that Bitcoin could be made Turing complete by using transactions as logic gates and doing loops off the blockchain. What the point of all this was is still not clear, but nChain's patent attorneys (real ones this time) managed to get 3 patent applications through the EPO's normally rigorous examination system, resulting in
EP3449450 granted in June 2022,
EP3449451 granted in July 2022 and
EP3449452 granted in June 2022. I
wrote about the first one of these patents, and the issues around Turing completeness, in November 2022, shortly after an opposition was filed by Arthur van Pelt with my assistance and with financial help from various generous Bitcoin supporters.
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Craig Wright's opinion of the first opposition. |
The first opposition, which was labelled "
Faketoshi01" for ease of reference, was all about added matter. For the full details, see the
post mentioned above. In short, the problem with the patent was that claim 1 had been
amended during prosecution in a way that added matter (not allowed under
Article 123(2) EPC). This was not noticed by either the patent attorney who did the amending or by another attorney who
signed it off, nor was it noticed by the 3 member examining division at the EPO, who
allowed the application. Once granted, the patent was fatally flawed because the only way to correct the added matter issue would have been to remove it. Unfortunately for the patentee, this was also not allowed (under Article 123(3) EPC) because this would inevitably broaden the scope of the patent. The patent was therefore stuck in an added matter trap that was impossible to get out of. Once the opposition was filed, it was inevitable that the only outcome could be revocation. Nonetheless, nChain's patent attorneys
tried anyway and ended up making things worse. In the end, shortly before oral proceedings were due to be held to decide the matter, nChain
switched patent attorneys and their new representatives clearly saw that the problem was insurmountable. Instead of fighting a battle they knew they could not win, they threw in the towel and
asked for the patent to be revoked. The patent was then
revoked in May 2024 without any fight. This decision was final and no appeal was filed.
The second opposition (
Faketoshi02) was filed in March 2023 against EP3449452. This time, the issues were not about added matter but about novelty and inventive step. Claim 1 of the patent defined a method that would cover a process carried out by a conventional Bitcoin node that was well known before the 2016 priority date. In the opposition, the primary source of prior art was the 2014 book "Mastering Bitcoin" by Andreas Antonopoulos. This is such an important and useful piece of prior art because it goes into technical detail of how Bitcoin was known to work at the time, including details of the various opcodes used in Bitcoin transactions. Although it had already been
cited during prosecution by the EPO examiner, nChain's representative had somehow managed to convince the examiner that there was some kind of difference in what was claimed compared to what was disclosed in the book. As argued in the opposition, this turned out not to be correct.
This time the proprietor fought back. An initial, rather inept,
response was first filed by the representatives who got the patent granted, which again ended up causing more trouble than it was worth because it left nothing on file that was even admissible, let alone allowable. As with the first case, the attorneys then got switched and the new attorneys got to work by filing 15 sets of amendments to the claims in response to a
preliminary opinion that was very much against them. At oral proceedings held on 26 September 2024, there was quite a fight over the first 7 of these sets of amendments but at this point the representatives decided to give up and throw in the towel, presumably realising they had nothing left. The EPO opposition division then decided to revoke the patent. A written
decision issued on 4 November 2024.
The third opposition (
Faketoshi03) was filed in April 2023 against EP3449451, again based on novelty and inventive step grounds. The proprietor's representatives, which were again switched after a failed first attempt,
filed even more sets of amendments. At the oral proceedings on 24 September 2024, the Opposition Division surprisingly came up with added matter as a new ground of opposition. The proprietor's attorneys, being justifiably surprised at this (as was I), got the proceedings rescheduled to give them time to think a bit more. At the rescheduled proceedings held on 10 December 2024, the new added matter ground was upheld and the patent was revoked after only about 30 minutes of argument. Unfortunately for the patentee in this case, the added matter problem was the same for all their numerous requests so, once the first request fell all the others followed for the same reason. The written
decision revoking the patent then issued on 23 December 2024.
A hit rate of 3 out of 3 is not bad going, but for two of these we are not yet at the end of the story. For the second and third cases, the patentee decided to file appeals against the revocation decisions. I was slightly surprised at this because they had taken the precaution of filing divisional applications on each of them, all of which are currently still pending at the EPO, meaning that they could have another go at getting a patent without the limitations of post-grant amendments. However, given that appeals have been filed there is still the possibility, however remote, that they could rescue something and perhaps save face. So far,
grounds of appeal have been filed on Faketoshi02, which have already been
responded to, and grounds on Faketoshi03 are due in the next few days (
Update 29 April 2025: grounds have now been
filed and
responded to). So far, the arguments from the proprietor/appellant do not look very impressive but we will probably have to wait at least another couple of years before we find out what the Board of Appeal thinks of them, given the large backlog of cases they have to deal with. More excitement is therefore yet to come. I shall, of course, keep you posted.