It looks as though the PKP suit is finally over, with both sides claiming victory. Is the decision public? Can someone in California get a copy of it and find out what really was decided. Bruce ***************************************************************************** SUNNYVALE, Calif.--(BUSINESS WIRE)--Sept. 18, 1995--An Arbitration Panel has determined that RSA Data Security Inc. licensed software products, practicing public-key technology to third parties without the legal rights necessary to the patents covering the technology. The decision, issued on Sept. 6, 1995, came in a binding arbitration between RSA and CYLINK Corp., which formed the partnership known as Public Key Partners (PKP) on April 6, 1990. The purpose of forming PKP was to establish a security standard and jointly license security patents to leading vendors in the high-tech industry. CYLINK has indicated that it will enforce the binding decision in Federal Court. "The ruling exposes everyone of RSA's OEM customers -- from the time PKP was formed in 1990 until the patents expire -- to the liability for patent infringement," said Robert Fougner, general counsel, CYLINK. "Because of the widespread interest in public key technology, this ruling has enormous implications for the entire high-tech industry, impacting the future of all electronic information exchanges including electronic commerce and banking. The panel's decision vindicates our position that RSA Security Inc. has been improperly licensing technology which they did not have the necessary rights to." The fundamental patents covering public key technology (Merkle-Hellman and Rivest-Shamir-Adelman) had been held by the PKP partnership since 1990. Effective Sept. 6, 1995, however, the arbitration ruled that PKP was dissolved and the broadest of the public key patents (invented at Stanford University and which cover all known implementations of public key technology) revert from PKP back to CYLINK. The panel further ruled that RSA Data Security Inc. could not grant its software customers the right to make any copies of RSA-authored software implementing Stanford public key technology. In an order issued Sept. 12, 1995, the arbitrators said that "the intent of the order is to clarify that to the extent a (RSA software) licensee makes copies of the code (whether source or object), it is not protected as a result of the order from a claim that the making of such copies is a `making' under the patent laws upon which a claim for infringement of the Stanford patents can be based." "Cylink will assert the rights to the Stanford patents vigorously," said David Morris, vice president of marketing, CYLINK. "The investors of public key cryptography, especially Martin Hellman of Stanford University, have never gotten a fair return for their ground breaking invention. Since the formation of PKP, RSA Data Security Inc. had been granting software rights which allowed licensees to copy and modify the programs, but without paying PKP or the inventors a royalty for those rights." Arbitration Ruling The Stanford University patents include the Hellman-Merkle patent, the first public key patent making the broadest claim of cryptography, a security technique that ensures privacy, authentication and the integrity of electronic information. Because the Hellman-Merkle patent claims cover all implementations of public key techniques, including the techniques known as RSA. To avoid risk of a patent infringement suit under the Stanford patents, any vendor who has purchased a license from RSA since April 6, 1990, or is contemplating the purchase of an RSA license and is distributing software or hardware covered by the Stanford University patents, must now obtain a license to the Hellman-Merkle patent from CYLINK for their continued use. Customers who would like to contact CYLINK about existing and future licenses should call Robert Fougner, General Counsel, at 408/735-5800. Background Information: On April 6, 1990, RSA and CYLINK formed PKP to establish a security standard, and jointly license security patents to leading vendors in the high-tech industry. The security technology business is unusual in that it is based on patents to which only these two companies have rights. The patents originally developed at Stanford University (Diffie-Hellman, Hellman-Merkle and Hellman-Pohling) broadly claim the invention of public-key cryptography. Another patent, invented at MIT (Rivest-Shamir-Adelman) claims a particular implementation of public key cryptography using the algorithm known as "RSA." In 1994, CYLINK initiated the arbitration against RSA, claiming that RSA's licensing practices exceeded RSA's rights under the patents and violated the agreements forming PKP. CYLINK further claimed that it was denied a promised license to the RSA patent when PKP was formed. Among other rulings, the arbitrators ruled that an April 1990 document grants CYLINK a patent license to the RSA patent. CYLINK Corp. is the world's largest provider of enterprise-wide network information security products and wireless communications. Headquartered in Sunnyvale, CYLINK serves Fortune 500 companies, multinational financial institutions and many international government agencies. --30--crd/sf* jar/sf CONTACT: Cylink Corporation, Sunnyvale Kim Rose, 408/774-6447 *************************************************************************** REDWOOD CITY, Calif.--(BUSINESS WIRE)--Sept. 19, 1995--An Arbitration Panel recently ruled that Cylink does not have a license to RSA patented technology, that RSA's software licensing practices do not breach any agreement with Cylink or its wholly owned subsidiary Caro-Kann and that RSA now has the exclusive right to license the RSA patent. In a Sept. 6, 1995 ruling, an Arbitration Panel, formed by agreement of the parties, and after nearly a month of testimony, ruled in favor of RSA on every significant issue. The Panel held that neither Cylink nor Caro-Kann had a license to practice RSA patented technology. Cylink admittedly incorporates this technology in its Secure X.25 product line, without any license to do so. The Panel also found that RSA's software licensing practices did not materially breach any of Cylink's rights. The Panel did not rule that anyone, (specifically including RSA and its software customers) infringed any existing patent rights of anyone - including Cylink. As a result of the Panel's ruling, RSA now has the exclusive right to license the patented RSA technology. According to Jim Bidzos, the President of RSA, "RSA will continue to conduct its software business in exactly the same way that it has for the past ten years. "In addition, RSA anticipates that licenses to the RSA Patent will now be much more readily available, because they now can now be granted without Cylink interference. RSA has all of the intellectual property rights which it needs to license its software. RSA will vigorously defend against any claim to the contrary." A recent Cylink press release on the Ruling of the Arbitration Panel is wildly inaccurate. The same Robert Fougner (Cylink's General Counsel) who is cited in the Cylink press release has repeatedly made express representations to third parties that the Stanford Patents do not cover, and are not infringed by, the manufacture, use or sale of products incorporating RSA's TIPEM software developer's toolkit. As noted by Mr. Bidzos: "Cylink lost every single significant issue in the Arbitration. Their press release was simply an attempt to cover up what has been a crushing defeat." Questions regarding the Arbitration Panel Ruling or RSA licenses should be directed to Kurt Stammberger, RSA Technology Marketing Manager, or Paul Livesay, RSA Director of Legal Affairs. --30--as/sf* CONTACT: RSA Kurt Stammberger, 415/595-8782 kurt@rsa.com