Digital Signature Standard industry push

Stanton McCandlish mech at
Mon Mar 21 16:13:25 PST 1994

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(c) 1994 Mark Voorhees

--Feel free to re-post this article freely--

Electronic security firms call for resolution of cryptographic

March 21, 1994--Eight leading data security firms have written
Vice President Albert Gore requesting that he prod the adoption
of the proposed Digital Signature Standard. A patent dispute
between the government and Public Key Partners is holding up the
standard, which would provide a way of verifying documents used
in electronic commerce.

     The companies--AT&T, among them--are frustrated that they
are missing business opportunity through government inaction. The
original standard was proposed in August 1991.

     PKP owns most of the critical U.S. cryptographic patents. It
negotiated an agreement with the National Institute of Standards
and Technology that would give PKP the right to earn royalties on
products using the government's digital signature standard. That
agreement, which was published in the Federal Register last June,
raised a ruckus in industry among vendors who did not want to pay

     Gore bent to that opposition on February 4, when his office
announced that the standard would be royalty free. While that
pronouncement greatly pleased industry, it has created a thicket
of sticky, interwoven problems that defy quick resolution.

     The federal government must either assume the royalty
payments, which would likely total millions of dollars; try to
invalidate PKP's patents in court; or come up with a new
standard. The first option is politically explosive and the
second and third are time consuming.

     "Many of us have invested tremendous time, effort and money
in developing systems and products" built to the proposed
standard, the letter said. A new standard would also encounter
royalty demands from PKP and delay commercial development by four
to five years. "Further delay would only delay product
development, frustrate the user base, fragment the market and
delay the benefits to be realized through electronic commerce,"
the letter said.

     Gore's office did not respond for comment by press time.

     The companies signing the letter were: Information Security
Corp.; Litronic Industries; AT&T Secure Communications Systems;
Digital Signature; Mykotronx, Inc.; Datakey, Inc,; SecureWare,
Inc.; and Cordant, Inc. The letter was dated March 14.

(For more information, please refer to the March 25 issue of
Information Law Alert, which will be in the mail shortly.)

|      Mark Voorhees     | voorhees reports
|                        | 411 first street
|    636-8931 MCI Mail   | brooklyn, ny 11215-2507
|                        | 1-718-369-0906 (voice)
|  markvoor at  | 1-718-369-3250 (fax)

Stanton McCandlish * mech at * Electronic Frontier Found. OnlineActivist
"In a Time/CNN poll of 1,000 Americans conducted last week by Yankelovich
Partners, two-thirds said it was more important to protect the privacy of
phone calls than to preserve the ability of police to conduct wiretaps.
When informed about the Clipper Chip, 80% said they opposed it."
- Philip Elmer-Dewitt, "Who Should Keep the Keys", TIME, Mar. 14 1994

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