SECRET FORMULA POSTED TO INTERNET The RSA encryption software RC4 owned by RSA Data Security, Inc., has been anonymously and illegally posted to electronic bulletin boards on the Internet, perhaps compromising the software's long-term effectiveness. (New York Times 9/17/94 p.17)

There was nothing obviously illegal about the posting, as far as I can tell from the outside. In private conversations over the years with Jim Bidzos, President of RSA Data Security, he told me that RC4 was held as a trade secret by RSA. When I pressed him about why, rather than patenting it and revealing the algorithm to the public, he said it was a "business decision". Revelation or publication of a trade secret is not illegal; trade secrets are protected by contracts, not laws. At worst, RSA has the right to sue somebody who signed a contract with RSA, if such a company disclosed RSA's source code. But it's more likely that the revelation was done by someone who never had a contract with RSA, by reverse-engineering from widely available object code. In that case, RSA is unlikely to have a legal leg to stand on. U.S. case law on reverse-engineering is spotty but tends to support the right to examine copyrighted software in order to glean uncopyrightable information (such as algorithms or interface definitions) from it. And there's no evidence that the reverse- engineering even happened under U.S. law; most countries are more permissive. Since RC4 was deliberately marketed as an "exportable" encryption algorithm, there are plenty of copies in countries all over the world. RSA would know whether the posted code's indentation style, block structure, variable names, and lack of comments matched their own source code, indicating that a source-code nondisclosure contract may have been violated. But they aren't saying, which probably means it didn't match. The lawyer-letter that RSA sent to the net was mere bluster, similar to other threatening letters that RSA has sent over the years. The revelation of RC4 could help, or hurt, its long-term effectiveness. RSA has always claimed that RC4 was secure if sufficiently long keys are used, and its inventor, Ron Rivest, is well known for building good ciphers. Revelation may actually encourage the use of the algorithm, if public scrutiny reveals its true strength. This could bring not only further fame to Ron Rivest, but also fortune to RSA, which owns a fast, copyrighted implementation of RC4, and has plenty of experience at selling cryptography to businesses. RSA is not used to operating like an ordinary software publisher, forced to actually compete with potential competitors rather than clubbing them with lawsuits. But it will have to learn that trick soon anyway. Its main patent will expire over the next decade, it never had international rights anyway, and it's squabbling with Cylink, its ex-partner in monopoly control of U.S. public key crypto. I think the company has a potential to leverage the customer base and cash flow from its patent into a strong competitive position in an open market. John Gilmore