IP: Court To Reconsider Encryption Rule

[David Farber <farber () cis upenn edu>]

September 30, 1999



Court To Reconsider Encryption Rule


------------------------------------------------------------------------
A.P. INDEXES: TOP STORIES | NEWS | SPORTS | BUSINESS | TECHNOLOGY | 
ENTERTAINMENT
------------------------------------------------------------------------

Filed at 9:17 p.m. EDT

By The Associated Press

SAN FRANCISCO (AP) -- A federal appeals court said Thursday it would 
take another look at the government's power to regulate 
data-scrambling technology known as encryption.
In May, a three-judge panel ruled encryption programs and the 
mathematical formulas used to write them could not be suppressed by 
the government because they contain expressions of ideas.
But on Thursday, a majority of the full court's 21 active judges 
agreed to grant the government's request for another hearing.
The issue is vital to the software industry, which uses encryption to 
protect e-mail and electronic commerce, from credit card numbers to 
company data. The current restrictions, which treat high-powered 
encryption codes like military weapons, require a Commerce Department 
license for either export or Internet posting.
The Justice Department said it feared the May ruling would prevent it 
from keeping encryption technology out of the hands of terrorists and 
hostile nations.
The Clinton administration has offered some concessions to the 
industry by promising to reduce export restrictions. But it said new 
regulations, due in December, still would require government 
permission to sell scrambling technology to foreign governments and 
would ban sales to Iran, Iraq, Libya, Syria, Sudan, North Korea and 
Cuba.
Justice Department spokeswoman Gretchen Michael said she didn't know 
how the new regulations might affect the case being appealed.
The case was brought by Daniel Bernstein, a professor at the 
University of Illinois at Chicago who developed an encryption program 
in 1990 but found he was unable to get an export license to sell it 
overseas.
Attorney Cindy Cohn said the administration's new regulations are 
unlikely to remove the roadblocks Bernstein faced.
The government still appears to be claiming an absolute right to 
block the export of encryption codes, without defining what can and 
cannot be exported, she said. And it appears to still require a 
case-by-case review of the export or posting of source codes, the 
researchers' mathematical formulas for writing encryption codes, she 
said.
In the May decision, the appeals court panel said the government 
can't block the expression of ideas in encryption codes without 
setting clear standards and timetables and guaranteeing quick 
judicial review.
The existing regulations ``allow the government to restrain speech 
indefinitely, with no clear criteria for review,'' said Judge Betty 
Fletcher in the 2-1 ruling. That, she wrote, prevents professors such 
as Bernstein from engaging in valuable scientific expression.
An 11-judge panel of the same appeals court will be chosen to rehear 
the case. No date has been scheduled.