From: Hal <hfinney@shell.portal.com>
Date: Fri, 10 Nov 1995 02:34:18 +0800
To: cypherpunks@toad.com
Subject: New patent rules
Message-ID: <199511091751.JAA15752@jobe.shell.portal.com>
MIME-Version: 1.0
Content-Type: text/plain


Reading the latest Foresight Update articles in the sci.nanotech newsgroup,
I came upon an analysis of upcoming changes to the patent laws.  With
the signing of the GATT treaty the laws will change next year.  here
is one of the changes, quoting from the article:

    Infringement. Present U.S. patent law grants to a patent
    holder the right to exclude others from making, using, or selling the
    patented invention in the United States.  After about January 1, 1996,
    a patent holder has the right to exclude others also from offering for
    sale patented products or products made using a patented process.
    Thus, under the law as amended, the mere offer for sale of a patented
    product may be treated as an infringing act.  In addition, it will be
    illegal to import a product covered by a U.S. patent.

At first I thought this would not have much impact on crypto software,
which is of course heavily patented.  The current laws already prevent
people from making, using, or selling software which uses patented
algorithms.  The new restrictions on products made using a patented
process would not seem to be relevant.

But there is a possible interpretation which would be very significant.
What if data which has had cryptographic transformations applied were
viewed as a product of a possibly patented process?  An RSA-signed or
-encrypted message might then be such a product.  A blinded coin or other
credential, a key signature or certificate, virtually all of the things
we are interested in could be thought of in those terms.

We have occasionally discussed setting up offshore servers and such to
perform patented cryptographic algorithms.  But if the resulting data
is itself illegal to import, that would make this strategy much more
difficult.  Would it become illegal to "import" messages from
non-RSAREF versions of PGP, or to hand someone a Chaum-type cash token
issued by an offshore bank in a jurisdiction where his patents don't
apply?

I wonder if the lawyers on the list have any thoughts about whether such
an interpretation of the GATT rules is likely to stand.

Hal