What is Craig Wright doing with thousands of crypto patents?
No matter what you think of Craig Wright’s contentious self-identification as Satoshi Nakamoto, he’s still amassed one of the largest patent portfolios in the crypto industry. Established in 2015, his nChain employs some 260 workers who have been filing thousands of patent applications and intellectual property (IP) registrations.
Last week, Forbes’ Michael del Castillo released current figures on his patent collection: 800 granted and 3,000 pending. Already widely regarded as a legal troll against Bitcoin Core developers, Wright could soon become a patent troll, as well.
Wright is an aggressive plaintiff and wields a fortune to compensate high-powered attorneys around the globe. He even legally harassed the lead maintainer of Bitcoin Core and second successor to Satoshi Nakamoto, Wladimir van der Laan, so much so that van der Laan quit Bitcoin development altogether.
Wright famously claims to be the inventor of Bitcoin, Satoshi Nakamoto, and briefly fooled some early Bitcoiners like Gavin Andresen and Roger Ver into thinking this was true. Both rescinded their endorsements.
Despite Bitcoin’s self-sovereign and anti-statist ethos, Wright seems quite willing to use state courts to enforce his will. He’s sued numerous people, including Roger Ver and Peter McCormack, alleging they broke various laws by calling him a liar. Many of these lawsuits used the UK judiciary where it’s far easier to prove libel than in US courts.
He’s stated that he plans to escalate at least one lawsuit to the UK High Court of Justice. He intends to use this case to prove that, in his own words, “I created Bitcoin.”
Read more: Craig Wright pursues jury trial over billions worth of bitcoin
Some examples of Wright’s patents
Wright also seems intent on pressing forward with patents. He and his patent companies have nearly 4,000 issued or pending patents. He divided the patents and patent applications among four companies.
- Information Defense controls his Bitcoin and blockchain-related patents.
- Integyrs received several patents related to cryptographic research.
- Greyfog received Internet of Things (IoT) patents.
- Strassen has patents related to sharding, a method for subdividing a database into more manageable segments. Blockchains use sharding to improve scalability.
Many of the patents Wright likely assigned to Information Defense give him control of several proposed uses for digital assets, like “private payment circuits” using “e-cash,” on-chain exchanges, a system for counting votes, and other technologies commonly associated with blockchains.
One patent describes a “proof-of-stake” (PoS) or interest-generating mechanism that also mentions smart contracts — something that should get the attention of the Ethereum community. These patents could force developers to rethink how they use open-source software like Bitcoin or pay Wright to use them.
Wright believes Silicon Valley is full of communists
Wright especially seems intent on making a powerful enemy: Silicon Valley. Many of the patents he and his patent company applied for could impact Meta’s Javascript framework, React, and Microsoft’s Visual Studio. They could even impact the machines that power 40% of the internet using the Linux operating system.
He used harsh language to describe Silicon Valley in statements made to Forbes: “I don’t like Silicon Valley … They’re a bunch of Communists who believe they can steal whatever they want.”
Even though Wright is an attorney, he may face an uphill battle taking on the legal teams that Silicon Valley companies likely employ.
Wright’s history of suing Bitcoin developers
However, Bitcoin developers may be an easier target since they often don’t have a lot of money to pay attorneys. Wright is already appealing a case involving copyright that was tossed by a lower UK court to the Court of Appeal of England and Wales.
The case involves the question of whether UK copyright law covers the file system used by Bitcoin. The defense argues that Wright doesn’t have the right to license or claim copyright over the Bitcoin network, and is not even Bitcoin’s creator in the first place.
The 16 defendants in another case — all Bitcoin developers — dispute that Wright has the right to claim billions of dollars worth of bitcoin. Wright’s firm, Tulip Trading, filed the lawsuit claiming that hackers wiped the private keys.
However, one defendant in the case, Peter Todd, disputes whether the bitcoin in question even belonged to Tulip Trading in the first place. Tulip Trading is attempting to make the case that the defendants have a “fiduciary duty” to help it regain access to the funds. Todd shot back that modifying the code to grant it access to the funds comes with the risk of helping a nefarious actor gain access to funds that might not belong to Tulip Trading.
Faketoshi?
“We’re not even dealing with someone who has proven they legitimately owned the coins in question,” Todd told Law360. The coins had also never been moved out of the addresses in question — which would be most likely to happen if hackers really had gained access to the private keys. Todd also thought Wright was wasting his time and the judicial system’s time by going after developers, adding that Wright’s demands show “precisely why it’s important to have systems like Bitcoin where there is no central group of people who have the ability to seize coins unilaterally.”
Other major players in the digital asset space may be disinterested in giving up their anonymity to defend against a court case. Bitcoin.org’s current owner and maintainer uses the pseudonym of “Cøbra.” Wright scored a default win in an attempt to use the legal system to force Cøbra to remove the Bitcoin whitepaper from Bitcoin.org because Cøbra didn’t show up to defend themselves. The Bitcoin whitepaper is still hosted.
The community members who do show up also need to pay attorneys to have a shot of winning against Wright’s frequent lawsuits. Recognizing the problem, Jack Dorsey established a legal defense fund to help defend against Wright. Dorsey’s Square — now known as Block — also joined the Open Invention Network, which promotes protection for open-source software and “patent nonaggression.”
Some parties doubted his story from the start. When Wired first ran a story on Wright on December 8, 2015, it called him “a brilliant hoaxer who very badly wants us to believe.”
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