Dmitry Sklyarov, the Russian Programmer arrested by the FBI in July and detained in the US under the Digital Millenium Copyright Act of 1998, will be home for Christmas. Today, US Federal Court Judge Ronald M. Whyte signed the order approving a Diversion Agreement for this mild mannered Russian intellectual. The agreement will ultimately release Dmitry from all criminal charges, but more immediately this agreement allows him and his family to return to their homeland, Russia. In a statement on the proceedings, lead attorney John Keker expressed his views on today's agreement: "With this agreement, Dimitry gets everything he could get from an acquittal, and more. The indictment will be dismissed eventually, he gets to tell his story truthfully without pressure from the government, and he gets to go home now, rather than wait in the US while the case is fought. We are pleased with the result, and look forward to ElcomSoft's eventual acquittal."

Dmitry, relieved and pleased about the outcome, is not opening up the vodka just yet - "Until I'm in Russia, it is too early to say that I'm happy. But this agreement looks like [the] first significant change in my situation for last five months, [my] first real chance to get home."

In today's agreement, Dmitry will be required to testify for the government and ElcomSoft expects him to testify for their case as well. The story Dmitry has to tell is exactly the same regardless of which side calls him to testify. Dmitry's story has not changed since that day in July, when the FBI arrested him in Las Vegas, and he is quite happy to tell his story again and again, if need be.

ElcomSoft, the Russian Security Software Development Company indited under the same DMCA charges and Dmitry's employer, is thankful for the outcome of today's proceedings. CEO Alex Katalov is quick to point out "ElcomSoft has always made Dmitry's welfare it's highest priority - we are very pleased that there has been a solution that minimizes the risk for Dmitry and allows him and his family to return to Russia." When asked about today's decision and the effect it could have on ElcomSoft's case, Katalov replied "this decision actually liberates us from worrying about Dmitry going to jail - now [that] this risk is removed, the company can pursue its own defense more aggressively."

Joe Burton, lead attorney for ElcomSoft, reacted to today's outcome saying "I want to make a statement on behalf of ElcomSoft, my client. Both my client and I have, since the beginning of this case, maintained Dmitry's innocence on any and all criminal activity. From day-one of the arrest ElcomSoft has been willing to have the Government proceed against them and NOT Dmitry". Burton further states, "you may remember that ElcomSoft offered to take Dmitry's place and substitute the company as the sole defendant in this case. The company knows that neither Dmitry nor they committed any criminal acts and believes that in the end, they will be found innocent of any and all charges the U.S. Government is bringing against them as well."

The case continues with one exception, its unwitting hero, Dmitry Sklyarov, is no longer detained in the U.S. and his thoughts are now on his family his career and the upcoming holiday season in his homeland, at last.

Russian programmer Dmitry Sklyarov and his employer Elcomsoft today pled not guilty to charges of providing electronic book format conversion software in the United States. Sklyarov, who had the benefit of a court interpreter, spoke the plea himself in English.

The court heard a five-count grand jury indictment against Elcomsoft and previously jailed programmer Sklyarov on charges of trafficking and conspiracy to traffic in a copyright circumvention device.

Sklyarov -- who is out of custody on US$50,000 bail -- could face a prison term of up to twenty-five years and a US$2,250,000 fine. As a corporation, Elcomsoft faces a potential US$2,500,000 fine.

"Dmitry has programmed a format converter which has many legitimate uses including enabling the blind to hear eBooks," explained Cindy Cohn, Electronic Frontier Foundation Legal Director. "The idea that he faces prison for this is outrageous. The EFF will support Dmitry through the end of this ordeal."

"We were hoping that the government would see the wisdom and justice in not pursuing a case against Sklyarov," said his attorney, Joseph M. Burton of Duane Morris in San Francisco. "Even if one were to ignore the serious legal questions involving the DMCA, this case hardly cries out for criminal prosecution. Sklyarov's and Elcomsoft's actions are not conduct that Congress intended to criminalize. We will vigorously contest these charges."

Sklyarov and his attorneys appeared at the arraignment with US Magistrate Judge Richard Seeborg presiding. The next court appearance scheduled in the case is 9:00 AM Pacific on September 4 before Judge Ronald Whyte in the San Jose Federal Court building.

Well-dressed observers attended the arraignment and nonviolent protests occurred in Moscow (Russia), London (England), Boston, San Francisco, Los Angeles, Reno, and Black Rock City, Nevada.

Contact:

David Greene, FAP Executive Director / Staff Counsel
  fap@thefirstamendment.org
  +1 510-208-7744

Robin Gross, EFF Intellectual Property Attorney
  robin@eff.org
  +1 415-436-9333 x112
 +1 415-637-5310 (cell)

San Jose, California - A California appeals court today heard a debate over whether a lower court should have ordered dozens of Internet publishers to "stop the presses" pending the outcome of a California trade secrets trial.

In January 2000, as part of a trade secrets case brought by the motion picture industry, Santa Clara County Superior Court Judge William Elfving ordered Andrew Bunner and numerous other defendants to halt Internet publication of DeCSS pending the outcome of the trial. DeCSS is free software that allows people to play DVDs without technological restrictions, such as platform limitations and region codes, that are imposed by movie studios.

Today Bunner, represented by the Electronic Frontier Foundation (EFF) and the First Amendment Project (FAP), argued on appeal that this injunction violates his free speech rights under the First Amendment and the California Constitution. The argument took place in San Jose before three judges of the Sixth District California Court of Appeals.

"It is well-established that publishers of computer code are protected by the First Amendment. In granting the injunction against Mr. Bunner, the Superior Court failed to adequately consider Bunner's First Amendment rights," said David Greene, Executive Director and staff counsel to the First Amendment Project, who argued the appeal on behalf of Mr. Bunner. "The mere invocation of 'trade secrets' does not trump a publisher's First Amendment rights."

During today's oral arguments, the judges clearly appreciated the important First Amendment issues raised and asked probing questions of both sides. Upon completion of the oral arguments, the court took the matter under submission. A decision is expected in approximately 4-8 weeks.

Background on the DVD Copy Control Assoc. Inc. v. Bunner, et al. case:
  http://www.eff.org/IP/Video/DVDCCA_case/

About EFF:

The Electronic Frontier Foundation is the leading civil liberties organization working to protect rights in the digital world. Founded in 1990, EFF actively encourages and challenges industry and government to support free expression, privacy, and openness in the information society. EFF is a member-supported organization and maintains one of the most linked-to Web sites in the world:
  http://www.eff.org/

About FAP:

The First Amendment Project is a nonprofit, public interest law firm and advocacy organization dedicated to protecting and promoting freedom of information, expression, and petition. FAP provides advice, educational materials, and legal representation to its core constituency of activists, journalists, and artists in service of these fundamental liberties and has a website at:
  http://thefirstamendment.org/

On August 7th, the California Sixth Appellate District issued an opinion denying Matthew Pavlovich's motion to dismiss the case against him for lack of personal jurisdiction over him.

Pavlovich, who was a college student in Indiana and now lives in Texas, claims postings made to the LiVID mailing list, which he ran from his home computer should not subject him to defending himself in California. LiVID is an open source development team working to build a DVD player compatible with the Linux operating system that could compete with the movie studios' monopoly on DVD players. In January 2000, a California judge issued an injunction banning dozens of individuals, including Pavlovich, from publishing DeCSS computer code.

Today, the court held that because Pavlovich knew the movie business was in California, publishing information that might have an effect on its profits was a sufficient connection to find Pavlovich within the court's purview.

This ruling magnifies the ability of Hollywood or other businesses to successfully sue anyone in the world who publishes information on the Internet which the movie studios claim could hurt their profits. Pavlovich is considering an appeal of the order to the California Supreme Court on Constitutional Due Process grounds.

Electronic Frontier Foundation Media Release

Oakland, CA - In a trail-blazing 27-page order, Alameda Superior Court Judge James A. Richman dismissed a defamation lawsuit filed against a breast implant awareness activist, finding that it was a meritless SLAPP (Strategic Lawsuit Against Public Participation). The court held that a 1996 federal law protects individuals from civil liability for posting to an Internet newsgroup a statement created by another.

Ilena Rosenthal, Director of the Humantics Foundation in San Diego, was sued for defamation based on her postings on Internet newsgroups. On July 25, 2001, Judge Richman granted Rosenthal's motion to dismiss the complaint against her as a meritless SLAPP. Two self-proclaimed "Quackbusters," Stephen Barrett, M.D., of Allentown, Pennsylvania, and Terry Polevoy, M.D., of Canada, joined by their attorney and co-plaintiff, Christopher Grell, of Oakland, California, filed suit against the activist. Judge Richman found that none of the plaintiffs had valid claims against Rosenthal. He ruled that Rosenthal's statements calling Barrett and Polevoy "quacks," and Barrett "arrogant" and a "bully" who tried to "extort" her, were not actionable because "they do not contain provably false assertions of fact, but rather are expressions of subjective judgment."

Judge Richman further found that only one statement by Rosenthal was arguably defamatory -- a document written by someone else which Rosenthal re-posted to an Internet newsgroup. Judge Richman held that this statement by Rosenthal was protected under section 230 of the federal Communications Decency Act (CDA), a law Congress enacted in 1996 expressly "to promote the continued development of the Internet and other interactive computer services," which Congress declared should be "unfettered by Federal or State regulation."

Judge Richman held that section 230 of the CDA "provides immunity to users, as well as providers, of interactive computer services." He found that Rosenthal, "as a user of an interactive computer service, that is, a newsgroup, . . . is not the publisher or speaker" of statements made by a third person. Thus, Judge Richman concluded, "she cannot be civilly liable for posting it on the Internet. She is immune."

Lee Tien, Senior Staff Attorney for the Electronic Frontier Foundation (EFF), the leading Internet civil liberties organization, said "in enacting section 230, Congress tried to protect free speech on the Internet from chilling threats of costly litigation. This decision will help achieve that goal and marks a solid victory for free expression. Internet speech would be stifled if individuals could be found liable for the defamatory statements of others."

Mark Goldowitz, counsel for defendant Rosenthal and the Director of the California Anti-SLAPP Project, said, "Judge Richman's opinion is significant. To my knowledge, this is the first court to rule that Internet re-posting is immune from civil liability under federal law. This ruling greatly advances freedom of speech on the Internet. Also, it is very rare for a trial court judge to issue anything even close to a 27-page order."

Ilena Rosenthal, one of several defendants named in this high-profile Internet libel case, heads an international support group for women harmed by breast implants. Rosenthal believes that this suit, one of several the so-called "Quackbusters" have filed against critics of their tactics, has been used to intimidate and threaten others into silence for fear of being named as a "Doe" in this lawsuit. "They are a dominant threat to alternative and complementary medical practices and practitioners," Rosenthal said. "Their campaigns obstruct health freedom and attempt to chill the voices of their critics and opponents."
Links:

* For a copy of Judge Richman's 27-page opinion in Barrett v. Clark:
http://www.healthfreedomlaw.com/Court%20Documents/Rosenthal%20SLAPP/Rosenthal%20Ruling.htm
(For discussion of section 230 of the CDA, see pages 17-20.)
* For a copy of section 230 of the Communications Decency Act, 47 U.S.C. Sec. 230:
http://www.casp.net/47usc230.html
* For a copy of memoranda filed in support of Rosenthal's special motion to strike:
http://www.casp.net/caldocs.html

Contact:

Lee Tien, EFF Senior Staff Attorney,
tien@eff.org

Mark Goldowitz, Director, California Anti-SLAPP Project (CASP),
mg@casp.net

Ilena Rosenthal, defendant in Barrett v. Clark,
breast implant awareness activist, Director, Humantics Foundation,
ilena2000@hotmail.com

About EFF:
The Electronic Frontier Foundation is the leading civil liberties organization working to protect rights in the digital world. Founded in 1990, EFF actively encourages and challenges industry and government to support free expression, privacy, and openness in the information society. EFF is a member supported organization and maintains one of the most linked-to Web sites in the world:
http://www.eff.org/
About CASP:
The California Anti-SLAPP Project (CASP) is a public interest organization dedicated to the eradication of SLAPPs (Strategic Lawsuits Against Public Participation) in California. Founded in 1991, CASP has led a broad coalition for anti-SLAPP legislation, which resulted in enactment of California's pioneering legislation to protect against SLAPPs in 1992, and amendments to strengthen the law's protections in 1997 and 1999. CASP monitors implementation of the anti-SLAPP law and assists SLAPP targets and their attorneys with use of the law. For more information about CASP and SLAPPs:
http://www.casp.net/
About defendant Ilena Rosenthal:

For more information about defendant Ilena Rosenthal and her work on breast implant awareness, email her at ilena2000@hotmail.com. See also:

Breast Implants: The Myths, The Facts, The Women, by Ilena Rosenthal (information booklet)
http://www.internet-connect.com/implants/dowchemresults1.html

Article on saline implants in Glamour Magazine, Nov. 2000:
http://community-1.webtv.net/lany25/GlamourMagazineNov/

"Breast Implants, America's Silent Epidemic," in Total Health Magazine, Nov.-Dec. 2000)
http://www.mercola.com/2001/jun/6/breast_implants.htm

Note: EFF has no official position on breast implants or possible health risks thereof. Our interest in this case is the First Amendment issues raised. Press inquiries relating to Ms. Rosenthal's work should be directed to the Humantics Foundation, not EFF.

Ross Anderson, FIEE, FIMA
Reader Security Engineering
University of Cambridge
Computer Laboratory

Robert S. Mueller, III
United States Attorney
450 Golden Gate Avenue,
Box 36055
San Franscisco, Ca 94102
Fax: (415) 436-7234

July 26, 2001

Dear Mr Mueller,
The Sklyarov case

I lead the security group at Cambridge University. We are recognised as one of the leading research groups in the world in the field of information security. The research that we do is scientifically important, useful, legitimate and benefits mankind. I wrote the seminal paper on peer-to-peer systems ('The EternityService') which has since led many companies -- from Microsoft down to small start-ups -- to work on mechanisms for large-scale distributed data storage and retrieval, in which hundreds of millions of users may share the spare capacity on eachothers' hard disks for data backup. I coauthored the seminal paper on physical attacks on smartcards, which has led to a EU research project to develop next generation smartcard processors -- in which my team is a major player. I also coauthored the paper that introduced 'soft tempest' -- the idea of reducing the compromising electromagnetic emanations from electronic equipment using software rather than hardware; this technique is already fielded in the flagship email encryption product from Network Associates Inc. and has the potential to save the military forces of NATO countries over a billion dollars a year. I also coauthored the seminal paper on the vulnerabilities of copyright marking schemes, which has led to a tool (Stirmark) that is now the industry benchmark for testing marking systems. Colleagues in my group coauthored the seminal papers on cryptographic protocols and on protocol verification.

The arrest of Dmitri Sklyarov is of extreme concern to me. Security research at an internationally competitive level is inherently an adversarial business; the field advances through a coevolution of attack and defence. Understanding and documenting the vulnerabilities of existing systems is critical to progress. The prospect that I might be arrested in the USA for research work done here at Cambridge University , and published in a responsible way through the usual academic channels, is alarming. The arrest has also alarmed many of my colleagues.

I serve on the program committees of a number of leading international conferences, including the Information Hiding Workshop. The DMCA risks have persuaded my colleagues to hold the next workshop in Eindhoven, Holland, rather than at MIT. Another conference on whose committee I serve, the Fast Software Encryption workshop, was held last year in New York and this year in Tokyo; it is unlikely to return to the USA until thef reedom of speech issues are resolved. Computer security and cryptography academics in Europe and elsewhere are getting the impression that the USA is becoming a hostile place.

A former student of ours, Igor Drokov, has known Dmitry Sklyarov for about ten years, and assures me that he is a talented researcher who is known as a law-abiding citizen rather than as a hacker/cracker.

I am concerned about reports that his arrest was due to a civil dispute between his employer and Adobe, Inc. If a law-abiding serious researcher can face arrest because his work is seen as inconvenient or harmful by a big US company, then many if not most of the top researchers in the field are at risk. For example, my smartcard work is conducted in partnership with the French company Gemplus and the Israeli company NDS. It poses a direct competitive threat to a US company, Atmel. If I publish an attack that breaks their product but not Gemplus's or NDS's product -- even unwittingly -- then can Atmel have me arrested? Will I be held without bail for years since -- as a foreign national -- I am considered to be a potential fugitive?

Many countries including my own encourage academics to work closely with industry, so that the fruits of research can be realised more quickly for the benefit of the whole economy. Is US polic yabout to provide a strong disincentive for people in the IT sector to engage in competitive and pre-competitive research? Our whole experience at Cambridge is that good research in science and technology tends to be driven by real problems; academics who retreat into theory tend to be much less productive.

I realise that neither you nor the FBI can change the law. However, I hope that you hav e, and will exercise, discretion not to prosecute in cases that are highly questionable or marginal, especially where these cases may cause international incidents, harm the US economy, and damage the excellent reputation that your country has earned for the defence of freedom of speech worldwide over the last two generations.

I have for years been an opponent of the anti-Americanism that becomes fashionable in Europe from time to time, and that unfortunately reared its head again recently at Genoa. The Sklyarov case does not help those of us who consider ourselves to be America's friends.

Yours sincerely

Ross Anderson

Computer Laboratory
New Museums Site
Pembroke Street
Cambridge CB2 3QG England
Tel: +44 1223 334733
Fax: +44 1223 334678
E-mail: Ross.Anderson@cl.cam.ac.uk

The American public has traditionally enjoyed the ability to make convenience and incidental copies of copyrighted works without the necessity of obtaining the prior consent of the owner of the copyright. These traditional "fair use" rights are at the foundation of the receipt and use of information by the American public.

From the college student who photocopies a page from a library book for use in writing a report to the typical television viewer who records a broadcast for viewing at a later time to the prudent home computer owner who makes back-up copies of the information he has lawfully stored on his hard drive, we all depend on the ability to make limited copies of copyrighted material without having to pay a fee or obtain prior approval from the owner of the copyright prior to making the copy.

In fact fair use rights to obtain and use a wide array of information are essential to the exercise of First Amendment rights. The very vibrancy of our democracy is dependent on the information availability and use facilitated by the Fair Use Doctrine.

The time, in my view, has come for the Congress to reaffirm the Fair Use Doctrine and to bolster specific fair use rights which are now at risk.

In 1998, responding to the concerns of copyright owners, Congress passed the Digital Millennium Copyright Act. Its announced purpose was to protect from piracy copyrighted material in an environment which poses special concerns for copyright owners. The copyright owners made the valid point that unlike analog technology in which each successive copy degrades in quality, with digital technology a copy of a copy of a copy contains the same clarity and integrity as the original of the work. They also made the valid point that in the networked environment, perfect copies by the thousands can be sent simultaneously across the globe with a single click of a computer mouse. Copyright owners urged that the Congress provide greater protections to them to guard against piracy of copyrighted works in the digital networked era.

The Digital Millennium Copyright Act is the Congressional response to these realities. There are some who believe that it went too far and that in the extension of new protections to copyright owners that it placed in peril the traditional fair use rights of the users of information.

For example, it creates in Section 1201 (a) a new crime of circumventing a technological protection measure which guards access to a copyrighted work. Under Section 1201, the purpose of the circumvention is immaterial. It is a crime to circumvent a password or other gateway even for the purpose of exercising fair use rights. There is no requirement under Section 1201 that the circumvention be for the purpose of infringing a copyright. Any action of circumvention without the consent of the copyright owner is made criminal by this provision.

Some now foresee a time when through the operation of Section 1201 what is available for free on library shelves today may only be available in the future on a "pay per use" basis. A time will arrive when virtually all new material will be sent to libraries on CD-Roms. That material may easily be guarded by a password, which under the provisions of Section 1201(a) would qualify as a "technological protection measure." In exchange for a fee for each viewing, the password may be used. It would be a simple matter for the creator of the content to impose a requirement that a small fee be paid each time the copyrighted work is accessed by library patrons. Under this scenario, the most recently arrived library material would be available only on a pay per use basis. The student who wants even the most basic access to material to write his term paper would have to pay for each item he reads.

Several members of Congress made the effort in 1998 to limit the new crime under Section 1201 to circumvention for the purpose of infringing the copyright, but the momentum to enact the measure essentially unamended was too strong, and our effort fell short. With a growing realization on the part of the education community and supporters of libraries of the threat to fair use rights which Section 1201 poses, perhaps the time will soon come for a Congressional re-examination of this provision and for the assemblage of a national effort of sufficient size and intensity to enable a much needed modification of the provisions of Section 1201 (a) to occur.

Perhaps the only conduct which should be declared criminal is circumvention for the purpose of infringing the copyright. Perhaps a more limited amendment could be crafted to insure the continued exercise of fair use rights in libraries and in scholastic settings notwithstanding the provisions of Section 1201.

And there are other challenges.

I am concerned about the apparent attempt of some in the content community who are seeking to protect their copyright interests in material contained in digitally broadcast television programs by insisting that the television signal quality be degraded or by insisting on the use of set- top box technology which could potentially prohibit all copying. The reasonable expectations of television viewers to be able to make home recordings of programs for time shifting and other historically accepted purposes are now placed at risk.

There is a way to protect copyrights in digitally broadcast programs and to permit television viewers to make copies of television programs for home use. The model is contained in Section 1201 (k) of the Digital Millennium Copyright Act which was designed for analog television broadcasts.

The Section requires video cassette recorders to respond to Macrovision, a copy prevention technology, and to block copying of rental movies encoded with Macrovision. In exchange for this statutory mandate, viewers are granted the right to make unlimited copies of off-the-air television broadcasts and one copy for time shifting purposes of pay per view movies which may only be purchased at specific times.

Where there is no reasonable expectation of being able to make a copy, such as in the case of a movie rented from a video store, the VCR will block all copying in its response to Macrovision encoding.

This arrangement for the world of analog broadcasts offers a model for resolution of the present debate over how to protect copyrights associated with digital broadcasts. In exchange for a reasonable set of guaranteed home recording rights, along the lines of Section 1201 (k), I am hopeful that an arrangement can be achieved through a negotiated agreement to employ in the video stream watermarks or other encodings which would prevent copying that is inconsistent with the recording rules and to require that recording equipment recognize and respond to the encoding. Such an agreement should extend to all digital TV programming whether it is delivered by cable, satellite or over the air.

The time has come for the motion picture studios to present a proposal along these lines to the manufacturers of recording equipment. There is an urgent need for an agreement which will simultaneously protect copyrights and the home recording rights of television viewers.

In the meantime, I hope that the creative community will not attempt unilateral approaches to protecting content which would either defeat home recording rights or degrade the quality of digital broadcasts.

Congress should also reaffirm fair use principles in other specific areas:

Traditional distance learning applications use broadcast and closed circuit television, and a special copyright exemption accommodates these educational broadcasts. Today, a new era of distance learning has arrived in which personal computers and the Internet are replacing the television set and closed circuit systems as the delivery medium. The copyright exemption should be broadened to include the new technology and to expand to the home the setting in which distance learning can occur.

1. The First Sale Doctrine should be made applicable to on-line sales accompanied by downloads of the purchased material. Under current law, a book or CD purchased in a "bricks and mortar" store can be given to a friend or sold to another person without obtaining the consent of the copyright owner. The key to the permissibility of the transaction is that at any given point in time only one copy of the material is extant. The same principle should apply to material downloaded from the Internet. The technology exists to enable the transfer of a downloaded item to a third party with the simultaneous deletion of the material from the hard drive of the individual who is transferring it. The analogy to the transaction I previously described in the physical world is exact, and the First Sale Doctrine should be extended to apply to the on- line experience with equal force.
2. Given the architecture of the Internet and personal Computers, the simple act of viewing a downloaded image, listening to webcasting, or sending an e-mail message creates an incidental or temporary reproduction, and many consumer electronics products temporarily store bits, representing audio clips or audio visual works in a buffer as part of their normal operation. These temporary copies, which are essential to the operation of digital products and networks, should be made unequivocally lawful under the copyright law.
3. Current law permits a computer user to make back-up copies of software so that the program can be restored in the event of a hard disk crash. But current law does not permit an archival copy to be made of copyrighted data associated with the program. For example, under current law, the software which enables the recording on a hard drive of music lawfully downloaded from the Internet can be archived for back-up purposes. However, the music which was lawfully downloaded cannot be archived. In the event of a hard disk crash, the purchaser of the music would be required to go back to the seller and purchase another copy. The current exemption permitting the archive of software should be expanded to permit the archive of any copyrighted data which is lawfully acquired and is associated with the software.
4. The in store exemption for music sampling should be expanded to cover samples of music which are accessed over the Internet for purposes of determining whether or not to make a purchase of the music. Under the current in store exemption, bricks and mortar stores are able to share with their customers samples of recorded music, and millions of Americans routinely put on headphones in record stores and listen to the music before they purchase it. The same opportunity should be provided for sales accomplished over the Internet. Brief samples of recorded music should be made available without the need to obtain the permission of the owners of the music copyrights.
5. Purchasers of audio CDs should be able to contract with on -line services for the storage of music on the CDs they have purchased which they can access over the Internet at a time and place of their choosing. The misic would be stored in an on-line locker specific to each subscriber. Today, people physically carry their CDs from their home to their car to their office to a friend’s home for the purpose of listening to the music they have purchased. The Internet offers the opportunity for enhanced convenience by enabling people to leave their CDs at home and have access to their music by downstream from an on- line locker at any location where they can obtain Internet access. The owners of music copyrights are fully compensated, in this example, when the individual purchases the CD at the outset. He should then have complete freedom without interference from the copyright owner to access the music on that CD over the Internet at a time and place of his choosing.

This are [sic] some of the steps which taken together would constitute an appropriate reaffirmation of fair use rights for consumers, and I look forward to the time in the very near future when the attention of Congress will turn to the need through these and potentially other steps to create a better balance between the rights of copyright owners and the rights of the users of copyrighted information.

By Facsimile and Personal Delivery

Robert S. Mueller, III,

United States Attorney

450 Golden Gate Ave., Box 36055
San Francisco CA, 94102

Fax (415) 436-7234

Re: United States v. Sklyarov

Dear Mr. Mueller:

I am the Executive Director of the Electronic Frontier Foundation (EFF). I write to request a meeting with you to discuss the Sklyarov case. We have been attempting to contact you by telephone since Monday afternoon, but have not yet been successful.

As you may be aware, yesterday Adobe Systems, Incorporated, in a joint press release with the EFF, recommended the release of Mr. Sklyarov from federal custody. We attach a copy of the joint press release for your convenience.

Since the original complainant no longer wishes that this case be prosecuted and since Mr. Sklyarov remains in custody in Las Vegas, NV, far from his home and family, we would like to meet with you to discuss how Mr. Sklyarov can be freed.

We are available to meet at your convenience. Given the broad attention that this matter has garnered, Adobe's change of heart and the fact that Mr. Sklyarov remains in custody, we expect that there soon will be significant protests aimed at your offices calling for his release. While the EFF does not have the ability to control independent protests, if you indicate your willingness to meet with us by the end of the day Wednesday, July 25, we will, as a sign of good faith, refrain from calling for or organizing additional protests before that time.

We were pleased with Adobe's willingness to discuss this matter in a frank and open manner and hope that you will be willing to do the same. You can reach me on my office phone (415) 436-9333 x 103.

Sincerely,

SHARI STEELE

Executive Director

Electronic Frontier Foundation
454 Shotwell Street
San Francisco CA 94110

The Honorable John Ashcroft
Attorney General
Department of Justice
950 Pennsylvania Avenue N.W.
Washington, D.C. 20530

July 20, 2001

Dear Attorney General Ashcroft:

At the request of Adobe Corporation, Dmitry Sklyarov was arrested by the FBI on July 16th and charged with crimes under the Digital Millennium Copyright Act (DMCA). Mr. Sklyarov is a Russian national who came to the United States to deliver an academic presentation on his technological innovations. His arrest and subsequent detention without bail are shameful and opportunistic actions against an individual who was here simply to share his knowledge and technical expertise with American scientists.

Dmitry Sklyarov is not accused of any copyright infringement of any sort. He is a computer programmer. He stands accused of writing software that enables purchasers of electronic books to exercise their lawful fair use rights when viewing their eBooks. Such software is both legal and required in Russia, where it was written and developed. And while the DMCA does not prohibit its use in the US, providing the technology is banned under the DMCA. Courts have determined time and time again that computer code is creative expression worthy of First Amendment protection. Mr. Sklyarov is currently being held captive for the content of his ideas that demonstrate the flaws in Adobe's software and because he expressed them in the most precise scientific language available to his profession, computer code. Mr. Sklyarov's right to free expression under the U.S. Constitution and international treaty obligations must be respected.

Not only are Dmitry Sklyarov's human and civil rights being abused, the inability of programmers to distribute fair use tools infringes on the free speech rights of all of citizens who legitimately need them. Fair use is an integral part of the bargain of rights struck between the public and authors under U.S. copyright law. The U.S. Supreme Court has held that fair use provides the necessary breathing room to prevent a conflict between copyright and the guarantees of freedom of expression under the First Amendment. Although the Constitution mandates that copyrighted works pass into the public domain, the DMCA has outlawed all tools necessary to gain access to the works, even after those works rightfully belong to the public. Technology permits publishers to restrict access to and control the use of copyrighted works in ways that dangerously exceed the bounds of copyright, encroaching upon the public's rights to use and access knowledge.

While copyright holders are not accountable for the manner in which they release a work, the people must be permitted to take necessary steps in order to exercise their rights under the law. Jailing Dmitry Sklyarov strips people everywhere of that right and chills important research. The DMCA must be reigned in to comport with the limits set by the US Constitution.

When the DMCA was passing through Congress in 1998, the copyright industry promised it was needed as a shield for protection. Now as law, its used as a powerful sword to squelch speech and competition and kill fair use. Congress never intended for the DMCA to destroy fair use, in fact it expressly tried to protect it. As Attorney General, we ask that you honor this intent and your obligation to uphold the Constitution by dropping the charges against Dmitry Sklyarov and allowing him to return home to his wife and two small children.

Sincerely,

Shari Steele
Executive Director
Electronic Frontier Foundation

Publishers Hail Government Action Against Russian Ebook Hackers

Washington, DC: The nation's largest association of book and journal publishers today hailed the actions of the U.S. Department of Justice in arresting and charging a Russian cryptographer for trafficking in software that was primarily designed to "hack" technological safeguards that prevent unauthorized copying and distribution of ebooks.

The actions at issue were taken in accordance with provisions of the Digital Millennium Copyright Act (DMCA), which was enacted by Congress in 1998 to implement two international copyright treaties that were adopted by the World Intellectual Property Organization (WIPO) and endorsed by the United States and nearly 100 other nations two years earlier. Among other things, the DMCA prohibits the manufacture or distribution of products or services that are primarily designed or produced to circumvent technological protection measures used by copyright owners, thereby meeting the treaties' requirement that signatory countries provide "adequate legal protection and effective legal remedies against circumvention" of such measures.

According to news reports and documents filed by the Justice Department in the case, Dmitry Sklyarov is the alleged author of a program, "Advanced eBook Processor," which was designed to unlock and strip the technological protection measures from the "eBook Reader" produced by Adobe Systems Incorporated. Sklyarov, who was arrested a day after addressing a "hackers convention" in Las Vegas on the subject of this software, is an employee of ElcomSoft, a Russian software company that has allegedly been selling the software through its website.

Pat Schroeder, President and Chief Executive Officer of the Association of American Publishers (AAP), hailed the Justice Department's actions as consistent with the DMCA's "anticircumvention" provisions and the underlying Congressional intent to promote the availability of books and other copyrighted works on the Internet and in other digital formats.

According to Mrs. Schroeder, "It's only common sense to expect that, if the public wants desirable books to be available online and through other digital media like the Adobe Reader, the authors and publishers who have the legal rights to commercially exploit such works in the global digital marketplace must have reasonable assurances that the market value of their works can be protected from the extraordinary risks of illegal reproduction and distribution that are made possible by the capabilities of digital media. Congress understood this when it enacted the DMCA to help promote the online availability of copyrighted works."

"Distribution of the means to strip ebooks of their access and copyright protections is not a public service, any more than it would be a public service to distribute the keys that unlock a bookstore or public library," Mrs. Schroeder said. "It merely facilitates theft, and makes it less likely that ebooks will soon become a popular reading format."

The Association of American Publishers is the national trade organization of the U.S. book publishing industry. AAP's 310 members include most of the major commercial publishing houses, along with many small and medium-sized houses, university presses, and scholarly societies. Among the Association's top priorities is the protection of intellectual property rights in all media.

The FBI arrested Russian citizen Dmitry Sklyarov in Las Vegas, Nevada, yesterday on charges of distributing a product designed to circumvent copyright protection measures. Sklyarov, who was in Las Vegas to deliver a lecture on electronic book security, allegedly authored a program which permits editing, copying, and printing of electronic books by unlocking a proprietary Adobe electronic book format.

Charged in one of the first United States criminal prosecutions under the Digital Millenium Copyright Act (DMCA), Sklyarov is currently in custody in Las Vegas pending transfer to the Northern California US Federal District Court.

The case involves Advanced eBook Processor (AEBPR), software developed by Sklyarov's Russian employer Elcomsoft. According to the company's website, the software permits eBook owners to translate from Adobe's secure eBook format into the more common Portable Document Format (PDF). The company maintains that the software only works on legitimately purchased eBooks.

Adobe's eBook format restricts the manner in which a legitimate eBook buyer may read, print, back up, and store electronic books. The Advanced eBook Processor appears to remove these usage restrictions, permitting an eBook consumer to enjoy the ability to move the electronic book between computers, make backup copies, and print. Many of these personal, non-commercial activities may constitute fair use under U.S. copyright law. Of course, the Advanced eBook Processor software may also make it easier to infringe copyrights, since eBooks, once translated into open formats like PDF, may be distributed in illegitimate ways.

Robin Gross, attorney with the Electronic Frontier Foundation (EFF), explained, "The U.S. government for the first time is prosecuting a programmer for building a tool that may be used for many purposes, including those that legitimate purchasers need in order to exercise their fair use rights."

Jennifer Granick, Clinical Director at the Stanford Law School Center for Internet and Society, commented that "the DMCA says that companies can use technology to take away fair use, but programmers can't use technology to take fair use back. Now the government is spending taxpayer money putting people from other countries in jail to protect multinational corporate profits at the expense of free speech."

Alexander Katalov, President and Owner of Elcomsoft, expressed anger and disappointment over Sklyarov's arrest: "Dimitry is only one of the programmers who worked on this program, so I don't understand why it is his sole responsibility. In Russia, we have no law like the DMCA. In fact, distributing Adobe's eBook software is illegal in Russia, since Russian law requires that the software permit the purchaser to make at least one legal copy."

For Immediate Release -- Apr. 20, 2001
Contact:

Lauren Gelman, Public Policy Dir.
gelman@eff.org
+1 202 487-0420

Seattle -- In a precedent-setting ruling on free speech in cyberspace, a federal court in Seattle yesterday upheld the right to speak anonymously on the Internet. U.S. District Court Judge Thomas Zilly quashed a subpoena seeking to force an Internet service to disclose the identity of persons who spoke anonymously on an Internet message board. The American Civil Liberties Union (ACLU) and the Electronic Frontier Foundation (EFF) represented J. Doe, one of the anonymous speakers, in blocking the subpoena.

The subpoena was filed by 2TheMart.com, Inc., which is currently defending itself against a class-action lawsuit alleging the company engaged in securities fraud. The subpoena requested that InfoSpace turn over the identities of 23 speakers who used pseudonyms in participating on the Silicon Investor Web site owned by InfoSpace.

The ruling is the first of its kind nationally in a case involving anonymous speech by a third party. The case differs from many other Internet anonymity cases because J. Doe, who used the pseudonym "NoGuano," is not a party to the case, and no allegations of liability against Doe have been made. While Doe does maintain a Silicon Investor account, Doe never made any statements about 2TheMart, nor has Doe ever posted on Silicon Investor's 2TheMart message board.

"This is an important ruling for free speech on the Internet. The court recognized that you should be able to express opinions online without having to worry your privacy will be invaded because of a lawsuit that has nothing to do with you," said Aaron Caplan, staff attorney for the American Civil Liberties Union, an organization with an 80-year history of defending freedom of speech. "You have the right to speak anonymously on an Internet bulletin board just as you have the right to distribute a leaflet using a pseudonym," added Caplan. Caplan argued the case on behalf of J. Doe before the Court.

"By ruling for Doe, Judge Zilly has sent a clear message that the courts will not tolerate lawsuits designed to chill online speech," said Lauren Gelman, director of public policy for the Electronic Frontier Foundation, a civil liberties organization working to protect rights in the digital world. "We hope that this decision will force companies to think twice before they issue subpoenas, and encourage users to step forward and protect their rights if they receive a subpoena."

The ACLU and EFF argued that the Court should adopt the same test currently used to determine whether to compel identification of anonymous sources of journalists or members of private organizations. Under that test, the Court must first determine whether the person seeking the protected private information (in this case 2TheMart.com) has a genuine need for the information in the context of the case and cannot discover the information any other way. If so, the Court must then balance the harm to the anonymous speakers against the plaintiff's need to discover the identity of the speaker. Anonymity should be preserved unless the identity of the anonymous person is clearly shown to be of central importance to the case. In his ruling, Judge Zilly said that the information sought by the subpoena clearly was not central to the case of 2TheMart.com.

2TheMart.com was a fledgling company that intended to launch an online auction house. After its stock price plunged in 1999, a number of investors sued for securities fraud, alleging that the company had misled them about its prospects. Like many Internet start-ups, 2TheMart.com had a number of people who chatted about the company on investor-related bulletin boards. One of these bulletin boards was operated by Silicon Investor, a Web site now owned by Seattle-based InfoSpace. The postings were made under 23 different user names, including "The Truthseeker," "Edelweiss," and "NoGuano."

J. Doe was represented by ACLU staff attorney Aaron Caplan and Cindy Cohn, legal director for EFF. InfoSpace also submitted a brief supporting the right of its users to speak anonymously, and Brent Snyder of Perkins Coie argued the case before Judge Zilly on behalf of InfoSpace.

The briefs may be found at the EFF website at:
http://www.eff.org/Legal/Cases/2TheMart_case
and may also be available on the ACLU-WA website at: http://www.aclu-wa.org
An opinion will be published in the case and will be posted on the websites when it is available.
About EFF:

The Electronic Frontier Foundation is the leading civil liberties organization working to protect rights in the digital world. Founded in 1990, EFF actively encourages and challenges industry and government to support free expression, privacy, and openness in the information society. EFF is a member-supported organization and maintains one of the most linked-to Web sites in the world:
http://www.eff.org

Contacts:

Katina Bishop - EFF Communications Manager
+1 415 436 9333 x101
katina@eff.org

Robin Gross - EFF Staff Attorney
robin@eff.org

San Francisco CA -- The Electronic Frontier Foundation today appealed a January 20 order barring publication of DeCSS software on dozens of Web sites. The appeal to the California Sixth Appellate Court seeks to overturn the preliminary injunction that unfairly valued the DVD- CCA's claim of potential future financial harm above important First Amendment rights.

DeCSS is free software that allows people to play DVDs without technological restrictions, such as region codes, that are preferred by movie studios.

"The trial court simply ignored the defendant's First Amendment right to publish DeCSS on his Website," said David Greene, Executive Director and staff council to the First Amendment Project, and a member of EFF's DVD legal defense team. "The court's injunction is a prior restraint on free expression, one of the most severe civil penalties in our legal system. Even a momentary deprivation of the right to speak or publish causes serious and irreparable harm, far more grave than any monetary loss."

A "prior restraint" is government action that prevents a citizen's speech or publication from reaching its listeners. It can only be imposed for a very brief period, in extreme situations where the act of publishing threatens an interest more fundamental than the First Amendment itself, such as the safety of troops in wartime. In this case, the Preliminary Injunction prohibited publication of DeCSS after only a brief examination of dubious evidence. Furthermore, the order is unclear about exactly what is prohibited.

DVD-CCA claims that the defendants were mis-appropriating its trade secrets by posting DeCSS on their Websites. However, trade secret law only prevents publication by those who entered into contracts to protect the secret.

According to Eben Moglen, law professor at Columbia University, " In this appeal, EFF raises the central Constitutional question concerning the use of sweeping injunctions to control the flow of discussion and information on the Internet on allegations that commercial secrets are involved. I look forward to a decision in the court of appeals that takes Constitutional rights seriously."

EFF's Appeal brief is available at:
  http://www.eff.org/IP/Video/DVDCCA_case/20000515-appeal-brief.html

Background

The movie industry initiated legal attacks against Web publishers in California, New York, Connecticut, and Norway over the DeCSS software code posted on their sites. EFF is defending the DVD cases as part of its Campaign for Audiovisual Free Expression (CAFE). CAFE was launched last year to address complex social and legal issues raised by new technological measures for protecting intellectual property.

For complete information on the MPAA and DVD-CCA cases, see:
http://www.eff.org/IP/Video
http://www.eff.org/IP/Video/DVDCCA_case/20000515-appeal-brief.html

For more information on The First Amendment Project, see:
http://www.thefirstamendment.org

For more information concerning EFF's Campaign for Audiovisual Free Expression, see:
http://www.eff.org/cafe

The Electronic Frontier Foundation (http://www.eff.org) is the leading global nonprofit organization linking technical architectures with legal frameworks to support the rights of individuals in an open society. Founded in 1990, EFF actively encourages and challenges industry and government to support free expression, privacy, and openness in the information society. EFF is a member-supported organization and maintains one of the most-linked-to Web sites in the world.

The First Amendment Project (http://www.thefirstamendment.org) is a nonprofit, public interest law firm and advocacy organization dedicated to protecting and promoting freedom of information, expression, and petition. FAP provides advice, educational materials, and legal representation to its core constituency of activists, journalists, and artists in service of these fundamental liberties.

LETTER BRIEF
BY ORDER OF THE COURT

Ms. Cathy Catterson
Clerk, United States Court of Appeals
for the Ninth Circuit
P.O. Box 193939
San Francisco, CA 941119-3939

Re: Bernstein v. Department of Justice
Case No. 97-16686
Please circulate to Justices B. Fletcher, T. Nelson and M. Bright

Dear Ms. Catterson:

We write pursuant to the Order of the Court dated January 31, 2000, modified to extend time for filing on February 7, 2000. The Court has asked us to address the advisability of a remand in light of the issuance of the new interim export regulations relating to encryption software on January 14, 2000. The Court also asked us to address the question of the form of such a remand, if such is ordered.

Having now had the opportunity to review both the new interim regulations and the Advisory Opinion issued by the Defendants on February 17, 2000, Plaintff believes that a remand to the District Court is appropriate. The amendments make a number of significant changes in the export licensing requirements at issue in this case. These changes appear to impace the legal and factual context of this case. See e.g. Hays v. Concannon 921 F.2d 240 (9th Cir. 1990) (remand to District Court appropriate when legislation passed to "address problems created by" previous regulations).

While Plaintiff remains concerned about the Constitutionality and ambiguity of the new interim regulations, and while they do not appear to affect Professor Bernstein's scientific activities, we are continuing to seek clarification from the Defendants and believe that, regardless of the outcome of that process, the questions concerning the new interim regulations should be heard in the District Court in the first instance.

Plaintiff and Defendants have engaaged in discussions concerning the impact of a remand on the injunctive relief granted by the District Court and upheld by this Court. The injunctive relief was granted by the District Court and subsequently stayed in part by the District Court and in part by this Court pending determination of the appeal of this matter. The injunctive relief ordered as follows:

6) defendants are permanently enjoined from doing or causing to be done the following acts:

a) further and future enforcement, operation or execution of the statutes, regulations, rules, policies and practices declared unconstitutional under this order, including criminal or civil prosecutions with respect to plaintiff or anyone who uses, discusses or publishes, or seeks to use, discuss or publish plaintiff's encryption program or related materials described in paragraph 5[1] of this order, and

b) threatening, detaining, prosecuting, discouraging or otherwise interfering with plaintiff or any other person described in paragraph 6) above in the excercise of their federal constitutional rights as declared in this order.

Defendants have requested that the injunctive relief be vacated pending further order of the District Court.

Plaintiff sees no need for this Court to vacate the injunctive relief already granted. First, such action is premature without a briefing on the merits and scope of the relief granted before this Court of the District Court. Second, this request is puzzling, since Defendants have publicly claimed that the regulations no longer restrain Professor Bernstein or others engaged in similar activities. While Plaintiff is seeking further clarifications about this claim, it is difficult to understand why the injunctive relief should be vacated if Defendants no longer intend to enforce their prior regulations against Professor Bernstein and others.

Nonetheless, in order to accomodate Defendants' concerns, Plaintiff has offered to allow the stays of injunctive relief currently in force to remain in force pending further order of the District Court. Defendants have refused this offer and instead have asked the court to affirmatively vacate the previous injunctive relief.

There is no basis to grant Defendants this relief at this time. Defendants have choses to revise their regulations. Nothing about this decision, which was made without consultation with the Court of Plaintiff, justifies the affirmative vacating of the District Court's prior issued relief in this action, which relief was upheld by this Court on appeal.

Accordingly, Plaintiff requests that this case be remanded to the District Court for consideration of the impact on the case of the changes in the export regulations issued on January 14, 2000. To the extent they have any further applicability in light of the new regulations, the says placed by the 9th Circuit and District Court may remain in effect pending this further review by the District Court.

Footnote

[1] Paragraph 5 states: "the court declares that the Export Administration Regulations, 15 C.F.R. Pt. 730 et seq. (1997) and all rules, policies and practices promulgated or pursued thereunder insofar as they apply to or require licensing for encryption and decryption software and related devices and technology are in violatio of the First Amendment on the grounds of prior restraint and are, therefore, unconstitutional as discussed above, and shall not be applied to plaintiff's publishing of such items, including scientific papers, algorithms or computer programs."

Sincerely,

MCGLASHAN & SARRAIL
Professional Corporation

[signature]
CINDY A. COHN
Attorneys for Appellee
DANIEL J. BERNSTEIN

As expected, the U.S. Government today sought further review by the 9th Circuit of a 3 judge panel's recent decision holding that the federal government's regulations of encryption is unconstitutional. The Petition, which seeks both rehearing from the panel and rehearing en banc by an 11 judge panel, asserts two basic arguments, neither of which is new to the case.

The government argues that the 9th Circuit panel incorrectly determined that the export restrictions on source code are facially unconstitutional. This argument is based upon an entirely unsupported assertion that source code is only used expressively "on occasion."

"This should come as a big surprise to the millions of people who study, write, read, and develop their ideas using programming languages," noted lead counsel, Cindy Cohn. "This includes most of the inhabitants of Silicon Valley, as well as the mathematics, physics, computer science and other departments of high schools, universities, and businesses worldwide where such expressions are written, read, and reviewed daily. It is also is directly contradicted by evidence included in the record of this case."

The government also argues that the court should have rewritten the regulations to make them Constitutional rather than strike them down. By this, the government is asking the Court to step into the shoes of the agency and rewrite the regulations.

"Obviously this is not a proper role for a court," stated Ms. Cohn. "Indeed had the Court done so the government would have protested the 'judicial activism' of the Court. Writing regulations that meet the constitutional standards for free speech is certainly within the abilities of the Commerce Department."

"In sum, the Petition for Rehearing is not surprising, nor does it raise any new arguments," Cohn concluded. "It instead indicates the intention of the Government to delay justice for Professor Bernstein and the millions of others who are restricted by the encryption regulations for as long as possible."

Background

The Ninth Circuit Court of Appeals ruled on May 6, 1999 that the federal government's restrictions on encryption are unconstitutional, affirming a lower court's ruling that export control over cryptographic "software and related devices and technology are in violation of the First Amendment on the grounds of prior restraint."

The case has been sponsored by EFF since 1995 because of its importance to society, free expression, electronic commerce, and privacy in the digital world.

Encryption, the process of coding and decoding computerized information, is the most critical technological solution to protecting privacy and keeping computer networks secure. Acknowledging this point, the appeals court said "[t]he availability and use of secure encryption may offer an opportunity to reclaim some portion of the privacy we have lost. Government efforts to control encryption thus may well implicate not only the First Amendment rights of cryptographers intent on pushing the boundaries of their science, but also the constitutional rights of each of us as potential recipients of encryption's bounty."

The EFF Bernstein legal team consists of: Cindy A. Cohn, McGlashan & Sarrail; Lee Tien; James Wheaton & Elizabeth Pritzker, First Amendment Project; Robert Corn-Revere, Hogan & Hartson; M. Edward Ross, Steefel, Levitt & Weiss; and Dean Morehous & Sheri A. Byrne, Thelen, Marin, Johnson & Bridges.

The Ninth Circuit Court of Appeals has ruled that the federal government's restrictions on encryption are unconstitutional, affirming a lower court's ruling that export control over cryptographic "software and related devices and technology are in violation of the First Amendment on the grounds of prior restraint."

"The Court understood the strong First Amendment issues at stake here," noted Cindy Cohn, lead counsel for the Bernstein litigation team. "The decision is thorough and should stand up to further review."

The case has been sponsored by EFF since 1995. "We sponsored Professor Dan Bernstein's case because of its importance to society, free expression, electronic commerce, and privacy in the digital world," said Tara Lemmey, EFF's President and Executive Director.

Encryption, the process of coding and decoding computerized information, is the most critical technological solution to protecting privacy and keeping computer networks secure. Acknowledging this point, the court said "[t]he availability and use of secure encryption may offer an opportunity to reclaim some portion of the privacy we have lost. Government efforts to control encryption thus may well implicate not only the First Amendment rights of cryptographers intent on pushing the boundaries of their science, but also the constitutional rights of each of us as potential recipients of encryption's bounty."

The court recognized the case's impact on society by saying "...it is important to point out that the [Bernstein case] is a suit not merely concerning a small group of scientists laboring in an esoteric field, but also touches on the public interest broadly defined."

"The US government has wielded these export controls to deliberately eliminate privacy for ordinary people," said John Gilmore, co-founder of EFF. "The controls created wireless phones that scanners can hear, e-mail that's easy to intercept, and unsecured national infrastructures that leave us all vulnerable. Misguided national security bureaucracies use these controls everyday, to damage the nation they are sworn to protect, and to undermine the constitution they are sworn to uphold. Today's ruling is a giant step toward a sane policy."

The government, led by Justice Department attorney Scott McIntosh, argued that the export control laws on encryption are necessary to protect U.S. national security. Even if the export control laws are in fact regulated speech, McIntosh argued, if the government's intent was to regulate something other than publication, it only needed to show that the rules were "narrowly tailored" to serve a "substantial government interest." The court disagreed. "[B]ecause the prepublication licensing regime challenged here applies directly to scientific expression, vests boundless discretion in government officials, and lacks adequate procedural safeguards, it constitutes an impermissible prior restraint on speech," wrote the two assenting judges.

Judge Bright indicated that due to the importance of the case "it may be appropriate for review by the US Supreme Court." EFF anticipates that the government will ask for a stay of this ruling pending appeal. If granted, the stay would prohibit encryption exports even within the Ninth Circuit's jurisdiction, including all federal courts in California, Oregon, Washington, Arizona, Montana, Idaho, Nevada, Alaska, Hawaii, Guam and the Northern Mariana Islands, until the matter is finally resolved.

"I'm pleased the federal appeals court has affirmed Federal District Court Judge Marilyn Patel's original decision that in the name of national defense, the U.S. government should not restrict the very liberties it is supposed to be defending. This decision demonstrates the judicial branch's understanding of the encryption debate. Now is the time for Congress and the Administration to follow suit. This means passing and signing into law the SAFE ACT, which will promote the ever increasing growth of electronic commerce in a secure environment."

Rep. Eshoo is an original cosponsor of H.R. 850, the Security and Freedom through Encryption (SAFE) Act, which would allow U.S. manufacturers to export encryption software no more powerful than software already available in other countries. As a member of the House Commerce Committee, which has partial jurisdiction over the legislation, she has fought Administration efforts to weaken the SAFE Act and impose harsher encryption export curbs than currently exist. Rep. Eshoo hosted a major conference on encryption reform at Stanford University during the 104th Congress.

SAN FRANCISCO, CA -- The Electronic Frontier Foundation (EFF) today raised the level of honesty in crypto politics by revealing that the Data Encryption Standard (DES) is insecure. The U.S. government has long pressed industry to limit encryption to DES (and even weaker forms), without revealing how easy it is to crack. Continued adherence to this policy would put critical infrastructures at risk; society should choose a different course.

To prove the insecurity of DES, EFF built the first unclassified hardware for cracking messages encoded with it. On Wednesday of this week the EFF DES Cracker, which was built for less than $250,000, easily won RSA Laboratory's "DES Challenge II" contest and a $10,000 cash prize. It took the machine less than 3 days to complete the challenge, shattering the previous record of 39 days set by a massive network of tens of thousands of computers. The research results are fully documented in a book published this week by EFF and O'Reilly and Associates, entitled "Cracking DES: Secrets of Encryption Research, Wiretap Politics, and Chip Design."

"Producing a workable policy for encryption has proven a very hard political challenge. We believe that it will only be possible to craft good policies if all the players are honest with one another and the public," said John Gilmore, EFF co-founder and project leader. "When the government won't reveal relevant facts, the private sector must independently conduct the research and publish the results so that we can all see the social trade-offs involved in policy choices."

The nonprofit foundation designed and built the EFF DES Cracker to counter the claim made by U.S. government officials that governments cannot decrypt information when protected by DES, or that it would take multimillion-dollar networks of computers months to decrypt one message. "The government has used that claim to justify policies of weak encryption and 'key recovery,' which erode privacy and security in the digital age," said EFF Executive Director Barry Steinhardt. It is now time for an honest and fully informed debate, which we believe will lead to a reversal of these policies."

"EFF has proved what has been argued by scientists for twenty years, that DES can be cracked quickly and inexpensively," said Gilmore. "Now that the public knows, it will not be fooled into buying products that promise real privacy but only deliver DES. This will prevent manufacturers from buckling under government pressure to 'dumb down' their products, since such products will no longer sell." Steinhardt added, "If a small nonprofit can crack DES, your competitors can too. Five years from now some teenager may well build a DES Cracker as her high school science fair project."

The Data Encryption Standard, adopted as a federal standard in 1977 to protect unclassified communications and data, was designed by IBM and modified by the National Security Agency. It uses 56-bit keys, meaning a user must employ precisely the right combination of 56 1s and 0s to decode information correctly. DES accounted for more than $125 million annually in software and hardware sales, according to a 1993 article in "Federal Computer Week." Trusted Information Systems reported last December that DES can be found in 281 foreign and 466 domestic encryption products, which accounts for between a third and half of the market.

A DES cracker is a machine that can read information encrypted with DES by finding the key that was used to encrypt that data. DES crackers have been researched by scientists and speculated about in the popular literature on cryptography since the 1970s. The design of the EFF DES Cracker consists of an ordinary personal computer connected to a large array of custom chips. It took EFF less than one year to build and cost less than $250,000.

This week marks the first public test of the EFF DES Cracker, which won the latest DES-cracking speed competition sponsored by RSA Laboratories (http://www.rsa.com/rsalabs/). Two previous RSA challenges proved that massive collections of computers coordinated over the Internet could successfully crack DES. Beginning Monday morning, the EFF DES Cracker began searching for the correct answer to this latest challenge, the RSA DES Challenge II-2. In less than 3 days of searching, the EFF DES Cracker found the correct key. "We searched more than 88 billion keys every second, for 56 hours, before we found the right 56-bit key to decrypt the answer to the RSA challenge, which was 'It's time for those 128-, 192-, and 256-bit keys,'" said Gilmore.

Many of the world's top cryptographers agree that the EFF DES Cracker represents a fundamental breakthrough in how we evaluate computer security and the public policies that control its use. "With the advent of the EFF DES Cracker machine, the game changes forever," said Whitfield Diffie, Distinguished Engineer at Sun Microsystems and famed co-inventor of public key cryptography. "Vast Internet collaborations cannot be concealed and so they cannot be used to attack real, secret messages. The EFF DES Cracker shows that it is easy to build search engines that can."

"The news is not that a DES cracker can be built; we've known that for years," said Bruce Schneier, the President of Counterpane Systems. "The news is that it can be built cheaply using off-the-shelf technology and minimal engineering, even though the department of Justice and the FBI have been denying that this was possible." Matt Blaze, a cryptographer at AT&T Labs, agreed: "Today's announcement is significant because it unambiguously demonstrates that DES is vulnerable, even to attackers with relatively modest resources. The existence of the EFF DES Cracker proves that the threat of "brute force" DES key search is a reality. Although the cryptographic community has understood for years that DES keys are much too small, DES-based systems are still being designed and used today. Today's announcement should dissuade anyone from using DES."

EFF and O'Reilly and Associates have published a book about the EFF DES Cracker, "Cracking DES: Secrets of Encryption Research, Wiretap Politics, and Chip Design." The book contains the complete design details for the EFF DES Cracker chips, boards, and software. This provides other researchers with the necessary data to fully reproduce, validate, and/or improve on EFF's research, an important step in the scientific method. The book is only available on paper because U.S. export controls on encryption potentially make it a crime to publish such information on the Internet.

EFF has prepared a background document on the EFF DES Cracker, which includes the foreword by Whitfield Diffie to "Cracking DES." (See http://www.eff.org/descracker/). The book can be ordered for worldwide delivery from O'Reilly & Associates via the Web (http://www.ora.com/catalog/crackdes), or phone (1 800 998 9938, or +1 707 829 0515.)

The Electronic Frontier Foundation is one of the leading civil liberties organizations devoted to ensuring that the Internet remains the world's first truly global vehicle for free speech, and that the privacy and security of all on-line communication is preserved. Founded in 1990 as a nonprofit, public interest organization, EFF is based in San Francisco, California. EFF maintains an extensive archive of information on encryption policy, privacy, and free speech at the EFF Web site (http://www.eff.org).

The Federal District Court here
struck down Commerce Department export restrictions on the privacy
technology called encryption yesterday, concluding that "the
encryption regulations are an unconstitutional prior restraint in
violation of the First Amendment." For the first time, Judge Marilyn
Hall Patel ordered the government not to prosecute or harass the
plaintiff, Professor Daniel Bernstein, and those who use or publish
his encryption software. The decision knocks out a major part of the
Clinton Administration's effort to force companies to design
government surveillance into computers, telephones, and consumer
electronics.

"This is wonderful news," said Prof. Bernstein. "I hope I can get
some of my ideas published before they change the law again."

The decision is a victory for free speech, academic freedom, human
rights, and the prevention of crime. American scientists and
engineers will now be free to collaborate with others in the United
States and in foreign countries. This will enable them to build a new
generation of tools for protecting the privacy and security of our
communications.

"Once again, it took a federal court to sort out technology and the
Constitution," said Lori Fena, Executive Director of the Electronic
Frontier Foundation, which backed the suit. "Let this decision signal
the other two branches of government that when making laws pertaining
to the Internet, they must honor their oaths to uphold the
Constitution."

The decision is strategic because the Clinton Administration has been
using the export restrictions to influence domestic privacy policy.
Companies that agree to build "key recovery" technology into their
products are exempt from most of the restrictions. Key recovery, a
follow-on to the Clipper Chip, is designed to give the government
untraceable access to users' private information.

The Federal District Court of the Northern District of California
last December struck down the ITAR, a set of encryption restrictions
enforced by the State Department. A few weeks later, the Government
created virtually identical restrictions in the Commerce Department's
Bureau of Export Administration (BXA). Yesterday's decision
invalidates the new restrictions, stating, "the encryption regulations
issued by the BXA appear to be even less friendly to speech interests
than the ITAR." She warns that "the government cannot avoid the
constitutional deficiencies of its regulations by rotating oversight
of them from department to department," though concluding that she
"does not believe that such was the intent here."

"Our right to create, use, and deploy encryption come from our basic
civil rights of free speech, freedom of the press, freedom from
arbitrary search, due process of law, and privacy. Judge Patel has
affirmed those roots in the First Amendment," philosophizes John
Gilmore, Electronic Frontier Foundation co-founder. "Our Founding
Fathers used encryption -- and even invented some -- and did not
intend any ``crypto exceptions'' to the Bill of Rights."

DETAILS OF MONDAY'S DECISION

In the heart of the ruling, "The court declares that the Export
Administration Regulations . . . insofar as they apply to or require
licensing for encryption and decryption software and related devices
and technology, are in violation of the First Amendment on the grounds
of prior restraint and are, therefore, unconstitutional as discussed
above, and shall not be applied to plaintiff's publishing of such
items, including scientific papers, algorithms or computer programs."

The Court also held that the government's licensing procedure fails
to provide adequate procedural safeguards. When the Government acts
legally to suppress protected speech, it must reduce the chance of
illegal censorship by the bureacrats involved, for example by making
the government go to a judge to decide the issue. The EAR does not
require this; in fact, it precludes it. "And most important, and most
lacking, are any standards for deciding an application. The EAR
reviews applications for licenses ``on a case-by-case basis'' and
appears to impose no limits on agency discretion."

The Court dissected the export controls' exemption for printed
materials at length, calling it "so irrational and administratively
unreliable that it may well serve to only exacerbate the potential for
self-censorship." The government's "distinction between paper and
electronic publication . . . makes little or no sense and is untenable."

The Court not only declared that these regulations are invalid and
unenforceable, but also prevented the Government from "threatening,
detaining, prosecuting, discouraging, or otherwise interfering with
plaintiff or any other person described . . . above in the exercise of
their federal constitutional rights as declared in this order."

The immediate effect of this decision is that Prof. Bernstein may
publish his encryption software, and that others may read, use,
publish and review it. In addition, others in industry are studying
the court's analysis, and might decide to publish their own software
on the Internet as well.

Pretty Good Privacy, Inc, is one such company, which believes that
future courts will find Judge Patel's reasoning persuasive. "We are
particularly pleased the court has reconfirmed that computer programs,
like other literary works, are accorded full protection under the
First Amendment," said Bob Kohn, vice president and general counsel
for Pretty Good Privacy.

The final form of the judgment will be negotiated between the parties,
and presented to the court within a week. The government could either
seek an emergency appeal of the injunction, or take up to 60 days from
the entry of judgment to appeal.

ABOUT THE ATTORNEYS

Lead counsel on the case is Cindy Cohn of the San Mateo law firm of
McGlashan & Sarrail, who is offering her services pro bono. Major
additional legal assistance is being provided by Shari Steele of the
Electronic Frontier Foundation; Lee Tien of Berkeley; James Wheaton
and Elizabeth Pritzker of the First Amendment Project in Oakland; and
Robert Corn-Revere of the Washington, DC, law firm of Hogan & Hartson.

ABOUT THE ELECTRONIC FRONTIER FOUNDATION

The Electronic Frontier Foundation (EFF) is a nonprofit civil
liberties organization working in the public interest to protect
privacy, free expression, and access to online resources and
information. EFF is a primary sponsor of the Bernstein case. EFF
helped to find Bernstein pro bono counsel, is a member of the
Bernstein legal team, and helped to collect members of the academic
community and computer industry to support this case.

Full text of the lawsuit and other paperwork filed in the case is
available from EFF's online archives at:
http://www.eff.org/pub/Privacy/ITAR_export/Bernstein_case/

Scanned images of Monday's decision are available at:
http://www.eff.org/pub/Privacy/ITAR_export/Bernstein_case/
Legal/970825_decision.images/

The full text of Monday's decision will soon be available at:
http://www.eff.org/pub/Privacy/ITAR_export/Bernstein_case/
Legal/970825.decision

Professor Daniel Bernstein will be building his new Constitutionally-
protected cryptography web page at:
http://pobox.com/~djb/crypto.html

Electronic Frontier Foundation Contacts:

Shari Steele, Staff Attorney
301/375-8856, ssteele@eff.org

John Gilmore, Founding Board Member
541/354-6541, gnu@toad.com

Cindy Cohn, McGlashan & Sarrail
415/341-2585, cindy@mcglashan.com

WHAT: Press Conference

Immediately following oral arguments in front of Federal Judge
Marilyn Hall Patel, Professor Dan Bernstein, his lawyer and the
Electronic Frontier Foundation will hold a press conference. After
brief statements issued by each, there will be a media question and
answer period.

NOTE: This will be the first time that Dan Bernstein publicly
discusses the issue of encryption and his case specifically.

After Judge Patel declared that government restriction of Professor
Dan Bernstein's freedom to publish and speak on encryption technologies
was a violation of the First Amendment, the federal government moved
encryption oversight from the State Department to the Commerce
Department. With this oversight authority change, the government
claimed that it could still enforce the unconstitutionally-ruled
regulations. Bernstein, the professor who first challenged the
government's regulation, is once again taking steps to insure that First
Amendment rights are not violated.

Judge Patel will be hearing oral arguments to decide if the same
restrictions under different authority are still a violation of the
First Amendment.

WHO: Statements and Q&A sessions will be conducted by:
Professor Dan Bernstein, Plaintiff
Cindy Cohn, Legal Counsel for Plaintiff
John Gilmore, Board Member, Electronic Frontier Foundation

WHERE: Federal Building
450 Golden Gate Avenue, San Francisco
Turk Street entrance

WHEN: Wednesday, June 18th
10:15pm (Oral Arguments)
12:00pm (Press Conference)

CONTACT: Dave Steer
Fleishman-Hillard, Inc.
415.356.1024 or steerd@fleishman.com

Electronic Frontier Foundation Contacts:

Shari Steele, Staff Attorney
301/375-8856, ssteele@eff.org

John Gilmore, Founding Board Member
415/221-6524, gnu@toad.com

Cindy Cohn, McGlashan & Sarrail
415/341-2585, cindy@mcglashan.com

San Francisco - On Monday, Judge Marilyn Hall Patel struck down Cold War
export restrictions on the privacy technology called cryptography. Her
decision knocks out a major part of the Clinton Administration's
effort to force companies to build "wiretap-ready" computers,
set-top boxes, telephones, and consumer electronics.

The decision is a victory for free speech, academic freedom, and the
prevention of crime. American scientists and engineers will now be
free to collaborate with their peers in the United States and in other
countries. This will enable them to build a new generation of tools
for protecting the privacy and security of communications.

The Clinton Administration has been using the export restrictions to goad
companies into building wiretap-ready "key recovery" technology. In a
November Executive Order, President Clinton offered limited
administrative exemptions from these restrictions to companies which
agree to undermine the privacy of their customers. Federal District
Judge Patel's ruling knocks both the carrot and the stick out of
Clinton's hand, because the restrictions were unconstitutional in the
first place.

The Cold War law and regulations at issue in the case prevented
American researchers and companies from exporting cryptographic
software and hardware. Export is normally thought of as the physical
carrying of an object across a national border. However, the
regulations define "export" to include simple publication in the U.S.,
as well as discussions with foreigners inside the U.S. They also define
"software" to include printed English-language descriptions and
diagrams, as well as the traditional machine-readable object code and
human-readable source code.

The secretive National Security Agency has built up an arcane web of
complex and confusing laws, regulations, standards, and secret
interpretations for years. These are used to force, persuade, or
confuse individuals, companies, and government departments into making
it easy for NSA to wiretap and decode all kinds of communications.
Their tendrils reach deep into the White House, into numerous Federal
agencies, and into the Congressional Intelligence Committees. In
recent years this web is unraveling in the face of increasing
visibility, vocal public disagreement with the spy agency's goals,
commercial and political pressure, and judicial scrutiny.

Civil libertarians have long argued that encryption should be widely
deployed on the Internet and throughout society to protect privacy,
prove the authenticity of transactions, and improve computer security.
Industry has argued that the restrictions hobble them in building
secure products, both for U.S. and worldwide use, risking America's
current dominant position in computer technology. Government
officials in the FBI and NSA argue that the technology is too
dangerous to permit citizens to use it, because it provides privacy to
criminals as well as ordinary citizens.

"We're pleased that Judge Patel understands that our national security
requires protecting our basic rights of free speech and privacy," said
John Gilmore, co-founder of the Electronic Frontier Foundation, which
backed the suit. "There's no sense in `burning the Constitution in
order to save it'. The secretive bureaucrats who have restricted these
rights for decades in the name of national security must come to a
larger understanding of how to support and preserve our democracy."

Reactions to the decision

"This is a positive sign in the crypto wars -- the first rational
statement concerning crypto policy to come out of any part of the
government," said Jim Bidzos, President of RSA Data Security, one of
the companies most affected by crypto policy.

"It's nice to see that the executive branch does not get to decide
whether we have the right of free speech," said Philip Zimmermann,
Chairman of PGP, Inc. "It shows that my own common sense
interpretation of the constitution was correct five years ago when I
thought it was safe to publish my own software, PGP. If only US
Customs had seen it that way." Mr. Zimmermann is a civil libertarian
who was investigated by the government under these laws when he wrote
and gave away a program for protecting the privacy of e-mail. His
"Pretty Good Privacy" program is used by human rights activists
worldwide to protect their workers and informants from torture and
murder by their own countries' secret police.

"Judge Patel's decision furthers our efforts to enable secure electronic
commerce," said Asim Abdullah, executive director of CommerceNet.

Jerry Berman, Executive Director of the Center for Democracy and
Technology, a Washington-based Internet advocacy group, hailed the
victory. "The Bernstein ruling illustrates that the Administration
continues to embrace an encryption policy that is not only unwise, but
also unconstitutional. We congratulate Dan Bernstein, the Electronic
Frontier Foundation, and all of the supporters who made this victory
for free speech and privacy on the Internet possible."

"The ability to publish is required in any vibrant academic discipline,"
This ruling re-affirming our obvious academic right will help American
researchers publish without worrying," said Bruce Schneier, author of
the popular textbook _Applied Cryptography_, and a director of the
International Association for Cryptologic Research, a professional
organization of cryptographers.

Kevin McCurley, President of the International Association for
Cryptologic Research, said, "Basic research to further the
understanding of fundamental notions in information should be welcomed
by our society. The expression of such work is closely related to one
of the fundamental values of our society, namely freedom of speech."

Background on the case

The plaintiff in the case, Daniel J. Bernstein, Research Assistant
Professor at the University of Illinois at Chicago, developed an
"encryption algorithm" (a recipe or set of instructions) that he
wanted to publish in printed journals as well as on the Internet.
Bernstein sued the government, claiming that the government's
requirements that he register as an arms dealer and seek government
permission before publication was a violation of his First Amendment
right of free speech. This is required by the Arms Export Control Act
and its implementing regulations, the International Traffic in Arms
Regulations.

In the first phase of this litigation, the government argued that
since Bernstein's ideas were expressed, in part, in computer language
(source code), they were not protected by the First Amendment. On
April 15, 1996, Judge Patel rejected that argument and held for the
first time that computer source code is protected speech for purposes
of the First Amendment.

Details of Monday's Decision

Judge Patel ruled that the Arms Export Control Act is a prior restraint
on speech, because it requires Bernstein to apply for and obtain from
the government a license to publish his ideas. Using the Pentagon
Papers case as precedent, she ruled that the government's "interest of
national security alone does not justify a prior restraint."

Judge Patel also held that the government's required licensing
procedure fails to provide adequate procedural safeguards. When the
Government acts legally to suppress protected speech, it must reduce
the chance of illegal censorship by the bureacrats involved -- in this
case, the State Department's Office of Defense Trade Controls. Her
decision states, "Because the ITAR licensing scheme fails to provide
for a time limit on the licensing decision, for prompt judicial review
and for a duty on the part of the ODTC to go to court and defend a
denial of a license, the ITAR licensing scheme as applied to Category
XIII(b) acts as an unconstitutional prior restraint in violation of the
First Amendment." Professor Bernstein is now free to publish his ideas
without asking the government's permission first.

She also ruled that the export controls restrict speech based on the
content of the speech, not for any other reason. "Category XIII(b) is
directed very specifically at applied scientific research and speech on
the topic of encryption." The Government had argued that it restricts
the speech because of its function, not its content.

The judge also found that the ITAR is vague, because it does not
adequately define how information that is available to the public
"through fundamental research in science and engineering" is exempt
from the export restrictions. "This subsection ... does not give
people ... a reasonable opportunity to know what is prohibited." The
failure to precisely define what objects and actions are being
regulated creates confusion and a chilling effect. Bernstein has been
unable to publish his encryption algorithm for over four years. Many
other cryptographers and ordinary programmers have also been restrained
from publishing because of the vagueness of the ITAR. Brian
Behlendorf, a maintainer of the popular public domain "Apache" web
server program, stated, "No cryptographic source code was ever
distributed by the Apache project. Despite this, the Apache server
code was deemed by the NSA to violate the ITAR." Judge Patel also
adopted a narrower definition of the term "defense article" in order to
save it from unconstitutional vagueness.

The immediate effect of this decision is that Bernstein now is free to
teach his January 13th cryptography class in his usual way. He can
post his class materials on the Internet, and discuss the upcoming
class's materials with other professors, without being held in
violation of the ITAR. "I'm very pleased," Bernstein said. "Now I
won't have to tell my students to burn their notebooks."

It is unclear exactly where Judge Patel's decision applies -- in the
Northern District of California (containing San Francisco and Silicon
Valley) or throughout the country. Check with your own lawyer if
you contemplate taking action based on the decision.

It is not yet clear from the decision whether the export controls on
object code (the executable form of computer programs which source
code is automatically translated into) have been overturned. It may
be that existing export controls will continue to apply to runnable
software products, such as Netscape's browser, until another court
case challenges that part of the restrictions.

Electronic Frontier Foundation Contacts:

Shari Steele, Staff Counsel
301/375-8856, ssteele@eff.org

John Gilmore, Founding Board Member
415/221-6524, gnu@toad.com

Cindy Cohn, McGlashan & Sarrail
415/341-2585, cindy@mcglashan.com

San Francisco, CA -- On Friday, September 20, 1996, Judge Marilyn Hall
Patel will hold hearings in a case with far-reaching implications for
personal privacy, U.S. competitiveness, and national security. Mathematician
Daniel J. Bernstein, a Research Assistant Professor in the Department of
Mathematics, Statistics and Computer Science at the University of Illinois at
Chicago, has sued several Federal agencies on the grounds that the
agencies' requirement that he obtain a license prior to publishing his
ideas about cryptography violates his First Amendment right to freedom
of speech.

Cryptography is the science of secret writing. It is the technology
to use for providing privacy or proving authenticity over distances.
All kinds of communications, from cellular phones to corporate or
government databases, depend on cryptography for protection. The
security of computers against intruders, the privacy and integrity of
the Internet, ATM machines, satellite and cable TV, and the world
financial networks all depend on cryptographic protection. In fact,
the very future of the global Internet, especially as a tool for
commerce, political organizing and scientific development of new ideas,
depends upon the availability of strong encryption.

The U.S. government has restricted cryptography since it was useful in
winning World War II. However, cellular telephones, satellites, ATM
machines, and the Internet did not exist in 1945; advances in
communication and cheap computation have made cryptography useful in
many new applications. In addition, strong encryption is already
available abroad, making laws restricting their export obsolete and
damaging the ability of U.S. businesses to compete in overseas markets.
In fact, Congress is currently considering three pieces
of legislation that would all update the export control laws and remove
encryption from its current place on the U.S. Munitions List.

While Washington toils with Pro-CODE and the other introduced bills, this
hearing will examine the various legal tests that will determine
whether the export laws and regulations (the "ITAR") are
constitutional. Professor Bernstein argues that they violate
the First Amendment in several different ways:

LEGAL ARGUMENTS

* Any legal framework that allows a government bureaucrat to
censor speech before it happens is an unconstitutional prior restraint.
The government is not allowed to set up such a drastic scheme
unless they can prove that publication of such information will
"surely result in direct, immediate, and irreparable damage to our
Nation or its people" and that the regulation at issue is necessary
to prevent this damage. The government must also tightly restrain
the discretion given to the bureaucrats to ensure that they don't
misuse this power. The government has not met this burden
regarding the ITAR legal framework.

* Because restrictions on speech about cryptography are based on the
content of what is being said, the court must apply a strict scrutiny test
to determine whether individuals can be punished for engaging in this
speech. This requires that the regulation be necessary to serve a
compelling state interest and that it is narrowly drawn to achieve that
end. The ITAR regulatory scheme has adopted a too- restrictive approach,
by prohibiting many forms of speech in the area of cryptography.

* The ITAR regulatory framework lacks the necessary procedural
safeguards. Grants of administrative discretion must be limited by clear
standards, and judicial review must be available. "Quite simply, the ITAR
Scheme allows its administrative agencies to make inconsistent, incorrect
and sometimes incomprehensible decisions censoring speech, all without the
protections of judicial review or oversight."

* The ITAR framework is unconstitutionally vague. The government
doesn't even seem to know what its regulations include and exclude! Here,
they told Professor Bernstein that he could not publish his academic paper
for over three years, only changing their collective mind and withdrawing
that decision after being sued. The lack of standards has allowed the
government to misuse a statute aimed at commercial, military arms sales
to limit academic and scientific publication.

* The ITAR regulatory scheme is overbroad. In an internal memo
written almost 20 years ago, the government's own Office of Legal Counsel
concluded that the ITAR's licensing standards "are not sufficiently
precise to guard against arbitrary and inconsistent administrative
action." The OLC specifically warned that the coverage was so broad it
could apply to "communication of unclassified information by a technical
lecturer at a university or to the conversation of a United States
engineer who meets with foreign friends at home to discuss matters of
theoretical interest." This is exactly what is happening here, and it is
unconstitutional.

Judge Patel will hear arguments from attorneys for Bernstein and the
government concerning their respective motions for summary judgment. The
hearing on Friday is scheduled for 12:00 noon at the United States
District Court for the Northern District of California, San Francisco
Headquarters, at 450 Golden Gate Avenue. The hearing is open to the press
and to the public.

CASE BACKGROUND

Bernstein completed the development of an "encryption algorithm" (a recipe
or set of instructions) he calls "Snuffle." In order to contribute Snuffle
to the marketplace of scientific ideas, and to allow other scientists to
evaluate and test his ideas, Bernstein wishes to publish (a) a paper in
English describing and explaining the algorithm, (b) the "source code" for
a computer program that uses the algorithm (this source code more
precisely describes and implements the idea), and (c) instructions for how
a person could use the source code and a computer to encrypt communications.
He wishes to publish them in print journals as well as on the Internet.
Bernstein also wishes to discuss these items at mathematical conferences, in
college classrooms, on the Internet, and in other open, public meetings. In
fact, he would like to use Snuffle as part of his course material for a
cryptography class he will be teaching next spring.

The Arms Export Control Act and the International Traffic in Arms
Regulations (the ITAR regulatory scheme) required Bernstein to submit
his ideas about cryptography to the government for review, to register
as an arms dealer, and to apply for and obtain from the government a
license to publish his ideas. Failure to do so would result in severe
civil and criminal penalties. Bernstein believes this is a violation
of his First Amendment rights and has sued the government.

In the first phase of this litigation, the government argued that
since Bernstein's ideas were expressed, in part, in computer language
(source code), they were not protected by the First Amendment. On
April 15, 1996, Judge Patel rejected that argument and held for the
first time that computer source code is protected speech for purposes
of the First Amendment.

Because of its far-reaching implications, the Bernstein case is being
watched closely by privacy advocates, the computer industry, the export
and cryptography communities, and First Amendment activists. In fact,
several members of these communities provided declarations that were
submitted in support of Bernstein's motion.

July 26, 1996 Electronic Frontier Foundation

Contacts:
Shari Steele, Staff Counsel
301/375-8856, ssteele@eff.org

Mike Godwin, Staff Counsel
510/548-3290, mnemonic@eff.org

Lori Fena, Executive Director
415/436-9333, lori@eff.org

San Francisco, CA -- A University of Illinois at Chicago faculty member
who is suing the U.S. Department of State will file a motion Friday that
could strengthen his claim that government restrictions on information
about cryptography violate the First Amendment's protections for freedom
of speech. The full text of the motion for partial summary judgment is
also available.

Relying on Judge Marilyn Hall Patel's prior ruling that computer source
code is speech protected by the First Amendment, mathematician Daniel J.
Bernstein will file a motion for partial summary judgment in his suit
against the State Department.

In his 45-page memorandum in support of his motion, Bernstein sets forth
several First Amendment arguments:

LEGAL ARGUMENTS

* Any legal framework that requires a license for First Amendment
protected speech, which may be granted or withheld at the discretion of a
government official, is a prior restraint on speech. In order for this
framework to be acceptable, the government has the burden of showing that
publication will "surely result in direct, immediate, and irreparable
damage to our Nation or its people" and that the regulation at issue is
necessary to prevent this damage. The government has not met this burden
regarding the ITAR legal framework.

* Because restrictions on speech about cryptography are
content-based, the court must apply a strict scrutiny test in determining
whether individuals can be punished for engaging in this speech. A strict
scrutiny test requires that a regulation be necessary to serve a
compelling state interest and that it is narrowly drawn to achieve that
end. The ITAR regulatory scheme has adopted the *most* restrictive
approach by prohibiting all speech in the area of cryptography.

* The ITAR regulatory framework lacks the necessary procedural
safeguards. Grants of administrative discretion must be limited by clear
standards, and judicial review must be available. "Quite simply, the ITAR
Scheme allows its administrative agencies to make inconsistent, incorrect
and sometimes incomprehensible decisions censoring speech, all without the
protections of judicial review or oversight."

* The ITAR framework is unconstitutionally vague. The government
doesn't even seem to know what its regulations include and exclude! Here,
the lack of standards has allowed the government to misuse a statute aimed
at commercial, military arms sales to limit academic and scientific
publication.

* The ITAR regulatory scheme is overbroad. In an internal memo
written almost 20 years ago, the government's own Office of Legal Counsel
concluded that the ITAR s licensing standards "are not sufficiently
precise to guard against arbitrary and inconsistent administrative
action." The OLC specifically warned that the coverage was so broad it
could apply to "communication of unclassified information by a technical
lecturer at a university or to the conversation of a United States
engineer who meets with foreign friends at home to discuss matters of
theoretical interest." This is exactly what is happening here, and it is
unconstitutional.

CASE BACKGROUND

While a graduate student at the University of California at Berkeley,
Bernstein completed the development of an encryption equation (an
"algorithm") he calls "Snuffle." Bernstein wishes to publish a) the
algorithm, (b) a mathematical paper describing and explaining the
algorithm, and (c) the "source code" for a computer program that
incorporates the algorithm. Bernstein also wishes to discuss these items
at mathematical conferences, college classrooms and other open, public
meetings. The Arms Export Control Act and the International Traffic in
Arms Regulations (the ITAR regulatory scheme) required Bernstein to submit
his ideas about cryptography to the government for review, to register as
an arms dealer, and to apply for and obtain from the government a license
to publish his ideas. Failure to do so would result in severe civil and
criminal penalties. Bernstein believes this is a violation of his First
Amendment rights and has sued the government.

In the first phase of this litigation, the government argued that since
Bernstein's ideas were expressed, in part, in source code, they were not
protected by the First Amendment. On April 15, 1996, Judge Marilyn Hall
Patel in the Northern District of California rejected that argument and
held for the first time that computer source code is protected speech for
purposes of the First Amendment.

Because of its far-reaching implications, the Bernstein case is being
watched closely by privacy advocates, the computer industry, the export
and cryptography communities, and First Amendment activists. In fact,
several members of these communities provided declarations that were
submitted in support of Bernstein's motion.

On October 20th in San Francisco, we'll have the first public hearing
in the EFF/Bernstein lawsuit, which seeks to have the export laws on
cryptography declared unconstitutional. You are invited!

Meet at the Federal Building in San Francisco, 450 Golden Gate Avenue.
The first "oral arguments" in the Bernstein crypto export case will
happen there, starting at 10:30am PST, in Judge Marilyn Hall Patel's
courtroom, upstairs. We've been FedExing legalese back and forth for
months; now we get to explain the case in person. You can meet our
intrepid lawyers, who are slaving away without pay, _in_durance_vile_,
to protect our rights! Shake hands with an NSA lawyer specially flown
in for the occasion! Meet some local journalists! And watch the
wheels of justice grind as the judge first explores our case.

In this case, Dan Bernstein, ex-grad-student from UC Berkeley, is
suing the State Department, NSA, and other agencies, with help from
EFF. Our main argument is that the export controls on crypto software
are a "prior restraint on publication" which is unconstitutional under
the First Amendment unless handled very delicately by a court (not just
by an agency acting on its own). These agencies restrained Dan's ability
to publish a paper, as well as source code, for the crypto algorithm that
he invented. There are additional arguments along the lines that the
State Department and NSA take a lot more liberties during the export
process than their own regulations and laws really permit.

Like Phil Karn's case, this lawsuit really has the potential to outlaw
the whole NSA crypto export scam. We could make your right to publish
and export crypto software as well-protected by the courts as your
right to publish and export books. Of course, the government would
appeal any such decision, and it will take years and probably an
eventual Supreme Court decision to make it stick. But you can be
there at the very beginning.

Please make a positive impression on the judge. Show her -- by
showing up -- that this case matters to more people than just the
plaintiff and defendant. That how it gets decided will make a
difference to society. That the public and the press are watching,
and really do care that it gets handled well. We'll have to be quiet
and orderly while we're in the courthouse. There will be no questions
from the audience (that's us), but the session will be tape-recorded,
and you can take notes if you like. Banners and inflamatory t-shirts are
probably not a good idea. Consider this a dress-up day.

The particular issue in front of Judge Patel on the 20th is whether the
case should be thrown out. The government is arguing that it should.
It's a mess of legal details about whether the Judicial Branch has the
right to decide questions like this, and over whether we have really
properly claimed a Constitutional rights violation. It will teach
most observers something about how the courts work, and how the NSA and
State Dept use bureaucratic tricks to avoid facing the real issues.
We have managed to drag in some of these issues, like whether there is
sufficient "expression" in software that the First Amendment should
protect publishers of software. It's possible, but unlikely, that the
judge will decide then-and-there. We will get some clues to how
she is leaning, based on her questions and comments. Her written
decision will come out some days or weeks later.

Don't bring any interesting devices unless you're willing to check
them with the lobby guards for the duration. They seem to want to
hold onto guns, "munitions", and even small pocketknives, before
they'll let you go upstairs to the courtrooms.