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▒▒▄ ▒▒▒▒▒▒▄ ▒▒▒▒▒▒▄ ▒▒▒▒▒▒▄ ▒▒▄ ▒▒▒▄▄ ▒▒▄ ▒▒▒▒▒▒▄ ▒▒▒▒▒▒▄ ▒▒█ ▒▒█▀▀▀▀ ▒▒█▀▀▀▀ ▒▒█▀▒▒█ ▒▒█ ▒▒█▒▒█▒▒█ ▒▒█▀▀▀▀ ▀▒▒█▀▀ ▒▒█ ▒▒▒▒▒▄ ▒▒█▒▒▒▄ ▒▒▒▒▒▒█ ▒▒█ ▒▒█ ▀▒▒▒█ ▒▒▒▒▒▄ ▒▒█ ▒▒█ ▒▒█▀▀▀ ▒▒█ ▒▒█ ▒▒█ ▒▒█ ▒▒█ ▒▒█ ▒▒█ ▒▒█▀▀▀ ▒▒█ ▒▒▒▒▒▒▄ ▒▒▒▒▒▒▄ ▒▒▒▒▒▒█ ▒▒█ ▒▒█ ▒▒▒▒▒▒▄ ▒▒█ ▒▒█ ▒▒▒▒▒▒▄ ▒▒█ ▀▀▀▀▀▀ ▀▀▀▀▀▀ ▀▀▀▀▀▀ ▀▀ ▀▀ ▀▀▀▀▀▀ ▀▀ ▀▀ ▀▀▀▀▀▀ ▀▀ ▒▒▒▄▄ ▒▒▄ ▒▒▒▒▒▒▄ ▒▒▄ ▒▒▄ ▒▒▒▒▒▒▄ ▒▒█▒▒█▒▒█ ▒▒█▀▀▀▀ ▒▒█ ▒▒█ ▒▒█▀▀▀▀ ▒▒█ ▀▒▒▒█ ▒▒▒▒▒▄ ▒▒█ ▒▒█ ▒▒▒▒▒▒▄ ▒▒█ ▒▒█ ▒▒█▀▀▀ ▒▒█▒▒▄▒▒█ ▀▀▀▒▒█ ▒▒█ ▒▒█ ▒▒▒▒▒▒▄ ▀▒▒▒▒█▀▀ ▒▒▒▒▒▒█ ▀▀ ▀▀ ▀▀▀▀▀▀ ▀▀▀▀ ▀▀▀▀▀▀ Legal Net Newsletter Volume 1, Issue 8 -- June 3, 1993 Legal Net Newsletter is dedicated to providing information on the legal issues of computing and networking in the 1990's and into the future. The information contained in this newsletter is not to be misconstrued as a bona fide legal document, nor is it to be taken as an advocacy forum for topics discussed and presented herein. The information contained within this newsletter has been collected from several governmental institutions, computer professionals and third party sources. Opinion and ideological excerpts have been collected from many sources with prior approval. "Legal Net News", "Legal Net Newsletter" and the Legal Net News logo are Copyright (c) 1993 Paul Ferguson -- All rights reserved. This newsletter may be freely copied and distributed in its entirety. Singular items contained within this newsletter may also be freely copied and distributed, with the exception of individual copyrighted items which appear with the prior approval of the originating author. Legal Net News can be found at the following locations: Publicly Accessible BBS's ------------------------- The SENTRY Net BBS Arlington Software Exchange Centreville, Virginia USA Arlington, Virginia USA +1-703-815-3244 +1-703-532-7143 To 9,600 bps To 9,600 bps The Internet ------------ tstc.edu (161.109.128.2) Directory: /pub/legal-net-news Login as ANONYMOUS and use your net ID (for example: fergp@sytex.com) as the password. Or send e-mail to postmaster@tstc.edu E-mail submissions, comments and editorials to: fergp@sytex.com - -- In this issue - o CPSR files suit against the NSA for "Clipper" info o EFF comments to the NIST o The RISKS of teaching about computers and the law o Case History: "Some 'Property' Problems in a Computer Crime Prosecution," by Mike Godwin o CPSR statement to the NIST - -- Date: Fri, 28 May 1993 14:30:44 EST From: Dave Banisar <uunet!washofc.cpsr.org!banisar> Organization: CPSR Civil Liberties and Computing Project Subject: CPSR Seeks Clipper Docs CPSR Seeks Clipper Docs PRESS RELEASE May 28, 1993 CPSR Seeks Clipper Documents - Brings Suit Against NSA and National Security Council Washington, DC -- Computer Professionals for Social Responsibility filed suit today in federal district court seeking information about the government's controversial new cryptography proposal. The "Clipper" proposal, announced by the White House at an April 16 press conference, is based on a technology developed by the National Security Agency that would allow the government to intercept computer encoded information. Law enforcement agencies say that capability this is necessary to protect court ordered wire surveillance. But industry groups and civil liberties organizations have raised questions about the proposal. They cite the risk of abuse, the potential loss in security and privacy, costs to US firms and consumers, and the difficulties enforcing the policy. Marc Rotenberg, CPSR Washington office director, said "The Clipper plan was developed behind a veil of secrecy. It is not enough for the White House to hold a few press conferences. We need to know why the standard was developed, what alternatives were considered, and what the impact will be on privacy. " "As the proposal currently stands, Clipper looks a lot like 'desktop surveillance,'" added Rotenberg. David Sobel, CPSR Legal Counsel, said "CPSR is continuing its oversight of federal cryptography policy. These decisions are too important to made in secret, without public review by all interested parties." In previous FOIA suits, CPSR obtained records from the General Services Administration questioning the FBI's digital telephony plan, a legislative proposal to require that communications companies design wiretap capability. More recently, CPSR obtained records through the FOIA revealing the involvement of the National Security Agency in the development of unclassified technical standards in violation of federal law. CPSR is a national membership organization, based in Palo Alto, CA. Membership is open to the public. For more information about CPSR, contact CPSR, P.O. Box 717, Palo Alto, CA 9403, 415/322-3778 (tel), 415/322-3798 (fax), cpsr@cpsr.org - -- Excerpt extracted from - EFFector Online Volume 5 No. 9 5/28/1993 editors@eff.org A Publication of the Electronic Frontier Foundation ISSN 1062-9424 EFF Comments to the NIST (the National Institute of Standards and Technology: May 27, 1993 Before the COMPUTER SYSTEM SECURITY AND PRIVACY ADVISORY BOARD Technology Building, Room B-154 National Institute of Standards and Technology Gaithersburg, MD 20899 COMMENTS OF THE ELECTRONIC FRONTIER FOUNDATION Regarding Key Escrow Chip Cryptographic Technology and Government Cryptographic Policies and Regulations The Electronic Frontier Foundation (EFF) commends the Computer System Security and Privacy Advisory Board for offering the public the opportunity to comment on developments in cryptography and communications privacy policy. Recent Administration proposals, including use of the Clipper Chip and establishment of a government- controlled key escrow system, raise questions that cut to the core of privacy protection in the age of digital communication technology. The questions noted by the Advisory Board in its Notice of Open Meeting (58 FR 28855) reflect a broad range of concerns, from civil liberties to global competitiveness. The Digital Privacy and Security Working Group -- a cooperative effort of civil liberties organizations and corporate users and developers of communication technology which is chaired by the EFF -- has also submitted over one hundred questions to the Administration. (These questions are being submitted to the Advisory Board under separate cover on behalf of the Working Group.) That there are so many questions demonstrates the need for a comprehensive review of cryptography and privacy policy. We are encouraged that the Administration has expressed a willingness to undertake such a review. However, it has become clear that plans for rapid introduction of the Clipper Chip could unacceptably distort this important policy review. The Administration has made no secret of the fact that it hopes to use government purchasing power to promote Clipper as a de facto standard for encryption. With Clipper on the market, the policy process will be biased toward a long-term solution such as Clipper with key escrow. Moreover, the rush to introduce Clipper is already forcing a hasty policy review which may fail to provide adequate public dialogue on the fundamental privacy questions which must be resolved to reach a satisfactory cryptography policy. Based on the depth and complexity of questions raised by this review, EFF believes that no solution, with Clipper Chip or otherwise, should be adopted by the government until the comprehensive cryptography review initiated by the Administration is complete. EFF is a nonprofit, public interest organization whose public policy mission is to insure that the new electronic highways emerging from the convergence of telephone, cable, broadcast, and other communications technologies enhance free speech and privacy rights, and are open and accessible to all segments of society. In these comments, we will elaborate on questions 1, 2, and 3 listed in the Advisory Board's Notice. We offer these comments primarily to raise additional questions that must be answered during the course of the Administration's policy review. A. WILL PARTICULAR ENCRYPTION TECHNOLOGIES BE MANDATED OR PROSCRIBED?: A THRESHOLD QUESTION Unraveling the current encryption policy tangle must begin with one threshold question: will there come a day when the federal government controls the domestic use of encryption through mandated key escrow schemes or outright prohibitions against the use of particular encryption technologies? Is Clipper the first step in this direction? A mandatory encryption regime raises profound constitutional questions, some of which we will discuss below. So far, the Administration has not declared that use of Clipper will be mandatory, but several factors point in that direction: 1. Secrecy of the algorithm justified by need to ensure key escrow compliance: Many parties have already questioned the need for a secret algorithm, especially given the existence of robust, public-domain encryption techniques. The most common explanation given for use of a secret algorithm is the need to prevent users from by-passing the key escrow system proposed along with the Clipper Chip. If the system is truly voluntary, then why go to such lengths to ensure compliance with the escrow procedure? 2. How does a voluntary system solve law enforcement's problems? The major stated rationale for government intervention in the domestic encryption arena is to ensure that law enforcement has access to criminal communications, even if they are encrypted. Yet, a voluntary scheme seems inadequate to meet this goal. Criminals who seek to avoid interception and decryption of their communications would simply use another system, free from escrow provisions. Unless a government-proposed encryption scheme is mandatory, it would fail to achieve its primary law enforcement purpose. In a voluntary regime, only the law-abiding would use the escrow system. B. POLICY CONCERNS ABOUT GOVERNMENT-RUN KEY ESCROW SYSTEM Even if government-proposed encryption standards remain voluntary, the use of key escrow systems still raises serious concerns: 1. Is it wise to rely on government agencies, or government-selected private institutions to protect the communications privacy of all who would someday use a system such as Clipper? 2. Will the public ever trust a secret algorithm with an escrow system enough to make such a standard widely used? C. CONSTITUTIONAL IMPLICATIONS OF GOVERNMENT CONTROLS ON USE OF ENCRYPTION Beyond the present voluntary system is the possibility that specific government controls on domestic encryption could be enacted. Any attempt to mandate a particular cryptographic standard for private communications, a requirement that an escrow system be used, or a prohibition against the use of specific encryption algorithms, would raise fundamental constitutional questions. In order to appreciate the importance of the concerns raised, we must recognize that we are entering an era in which most of society will rely on encryption to protect the privacy of their electronic communications. The following questions arise: 1. Does a key escrow system force a mass waiver of all users' Fifth Amendment right against self-incrimination? The Fifth Amendment protects individuals facing criminal charges from having to reveal information which might incriminate them at trial. So far, no court has determined whether or not the Fifth Amendment allows a defendant to refuse to disclose his or her cryptographic key. As society and technology have changed, courts and legislatures have gradually adapted fundamental constitutional rights to new circumstances. The age of digital communications brings many such challenges to be resolved. Such decisions require careful, deliberate action. But the existence of a key escrow system would have the effect of waiving this right for every person who used the system in a single step. We believe that this question certainly deserves more discussion. 2. Does a mandatory key escrow system violate the Fourth Amendment prohibition against "unreasonable search and seizure"? In the era where people work for "virtual corporations" and conduct personal and political lives in cyberspace, the distinction between communication of information and storage of information is increasingly vague. The organization in which one works or lives may constitute a single virtual space, but be physically dispersed. So, the papers and files of the organization or individual may be moved within the organization by means of telecommunications technology. Until now, the law of search and seizure has made a sharp distinction between, on the one hand, seizures of papers and other items in a person's physical possession, and on the other hand, wiretapping of communications. Seizure of papers or personal effects must be conducted with the owner's knowledge, upon presentation of a search warrant. Only in the exceptional case of wiretapping, may a person's privacy be invaded by law enforcement without simultaneously informing the target. Instantaneous access to encryption keys, without prior notice to the communicating parties, may well constitute a secret search, if the target is a virtual organization or an individual whose "papers" are physically dispersed. Under the Fourth Amendment, secret searches are unconstitutional. 3. Does prohibition against use of certain cryptographic techniques infringe individuals' right to free speech? Any government restriction on or control of speech is to be regarded with the utmost scrutiny. Prohibiting the use of a particular form of cryptography for the express purpose of making communication intelligible to law enforcement is akin to prohibiting anyone from speaking a language not understood by law enforcement. Some may argue that cryptography limitations are controls on the "time, place and manner" of speech, and therefore subject to a more lenient legal standard. However, time, place and manner restrictions that have been upheld by courts include laws which limit the volume of speakers from interfering with surrounding activities, or those which confine demonstrators to certain physical areas. No court has ever upheld an outright ban on the use of a particular language. Moreover, even a time, place and manner restriction must be shown to be the "least restrictive means" of accomplishing the government's goal. It is precisely this question -- the availability of alternatives which could solve law enforcement's actual problems -- that must be explored before a solution such as Clipper is promoted. D. PUBLIC PROCESS FOR CRYPTOGRAPHY POLICY As this Advisory Board is well aware, the Computer Security Act of 1987 clearly established that neither military nor law enforcement agencies are the proper protectors of personal privacy. When considering the law, Congress asked, "whether it is proper for a super-secret agency [the NSA] that operates without public scrutiny to involve itself in domestic activities...?" The answer was a clear "no." Recent Administration announcements regarding the Clipper Chip suggest that the principle established in the 1987 Act has been circumvented. For example, this Advisory Board was not consulted with until after public outcry over the Clipper announcements. Not only does the initial failure to consult eschew the guidance of the 1987 Act, but also it ignored the fact that this Advisory Board was already in the process of conducting a cryptography review. As important as the principle of civilian control was in 1987, it is even more critical today. The more individuals around the country come to depend on secure communications to protect their privacy, the more important it is to conduct privacy and security policy dialogues in public, civilian forums. CONCLUSION The EFF thanks the Advisory Board for the opportunity to comment on these critical public policy issues. In light of the wide range of difficult issues raised in this inquiry, we encourage the Advisory Board to call on the Administration to delay the introduction of Clipper-based products until a thorough, public dialogue on encryption and privacy policy has been completed. Respectfully Submitted, Electronic Frontier Foundation Jerry Berman Executive Director jberman@eff.org Daniel J. Weitzner Senior Staff Counsel djw@eff.org - -- Excerpt extracted from RISKS Digest (14.65) - Date: Fri, 21 May 93 16:13:46 EDT >From: junger@samsara.law.cwru.edu (Peter D. Junger) Subject: The risks of teaching about computers and the law A fortnight ago, in order to postpone the necessity of grading final exams, I started writing a simple-minded encryption program, which uses a "one-time pad" as a key, for use this Fall in my class on Computers and the Law. The program is intended to demonstrate certain things that lawyers who are going to deal with the problems generated by computers should know: things like the nature of an algorithm and the fact that any text (that is encoded in binary digits) of length n contains (if one just has the key) all other texts of length n. Although in that course we shall mainly be concerned with copyright and patent issues relating to computer programs, we should also spend some time on security issues and on government regulation of computer programs. And that, of course, includes the regulation of the export of computer programs, including cryptographic programs and technical information relating to such programs. I shall also have to discuss cryptographic programs when dealing with issues of computer security, since it would profit lawyers to be aware of the fact that cryptography can do far more than the law can to keep one's confidences confidential. The latter point is, of course, of particular importance to members of a profession who have a legal and moral duty to keep their clients' confidences confidential from everyone, but especially from the agents of the state. As I was writing this program I realized that it itself, and any `technical data' relating to it, might be subject to federal export licensing regulations, since I intended to give copies of it to, and discuss it with, my students and make it available to anyone who wants it, even foreigners. Even if I do not put it on an anonymous FTP server, as I originally planned, there is no way that I can guarantee that all the students who enroll in my class will be citizens or permanent residents of the United States. After a little quick research I have determined that my program may be--and, in fact, probably is--subject to such licensing, though whether by the Department of Commerce or that of State is a matter that it will take some sixty days for the bureaucrats to determine. The trouble is that the program, which should run on any PC clone running MSDOS 3 or higher, and which now consists in its entirety of 174 bytes of 8086 machine code, which I am pretty sure I can get down to 170 bytes or less, is squarely covered by the definitions of Category XIII of the U.S. Munitions List (as is my old Captain Midnight Decoder, which I got during the War for a boxtop--or was it an Ovaltine label?--and change). The relevant subdivision of Category XIII of the Munitions List is (b), which provides in relevant part: (b) Information Security Systems and equipment, cryptographic devices, software, and components specifically designed or modified therefor, including: (1) Cryptographic (including key management) systems, equipment, assemblies, modules, integrated circuits, components or software with the capability of maintaining secrecy or confidentiality of information or information systems, except cryptographic equipment and software as follows: .... [none of the exceptions appear to be applicable to my program] There is no exception for encryption software that is so simple minded that a law teacher, whose only degrees are in English and law, can hack it out in about six hours, most of which time was spent chasing bugs that were the result of typos. I estimate that the average computer literate 12-year old could have written the program in about 20 minutes. In the course of my researches, which so far have consisted of speaking to a very pleasant person at the Department of Commerce's Bureau of Export Administration, to a not very nice major and a slightly nicer person at the Department of State's Bureau of Politico-Military Affairs, Office of Defense Trade Controls, and to a not un-nice person, whose name I was not allowed to know, who supposedly was at NSA, and wading an inch or so into a seven inch stack of Commerce Department regulations and a few more inches of statutes, I have concluded that if I `export' my little program without first getting a license I may be subject to a fine of not more than $1,000,000, or imprisonment for not more than ten years, or both. This isn't so bad, since in the case of the actual program it is pretty clear that `exporting' means exporting, so, since I don't intend to export the program, the only problem is that posting it on an FTP server on the internet gets into a `grey' area (according to the unknowable at NSA). Of course, if the program is considered to be my expression--which it must be if it is protected by the copyright laws--it is probably a violation of the First Amendment to require me to get a license before I can export it. But since I don't intend to export it--and the unknowable, on whom I dare not rely, did keep saying that it was a matter of my intention--I can treat that issue as an academic problem. (By the way, it is my position that the actual program--the machine code--not being in any sense expression--cannot Constitutionally be protected by copyright law; this is a position that the lower courts have--at least _sub silentio_--uniformly rejected, but it is a good bet that the Supreme Court will agree with me when it finally gets around to considering this issue!) The real trouble is that Category XIII contains as its final subdivision paragraph (k), which covers (k) Technical data . . . related to the defense articles listed in this category. And that, of course, means that I cannot lawfully export technical data about my program without first obtaining a license. But the regulations relating to technical data that is included on the Munitions List say, in effect, that the `export' of technical data includes talking about the defense article to which the data relates--which in my case is my piddling little program--in the presence of someone who is neither a citizen of the United States nor admitted to permanent residence in the United States. So, if any foreign students sign up for my course I will be required to get a license--which I am not sure I can get at all, and certainly will not be able to get in time to teach my course--before describing the program to my class, explaining how to use it, and giving them the source code--which, by the way, I contend _does_ contain expression--to load in with the debug program. I admit that I am not greatly concerned about the potential criminal penalties that might be imposed if I do discuss the program with my students without a license, and not only because I don't have a million dollars and--far all I know--may not have ten years. I cannot imagine anyone--except perhaps that major--who would be stupid enough to try to punish me for discussing my trivial program with my students. But how can I teach this particular bit of computer law if the very act of teaching amounts--at least in theory--to a criminal violation of the very law that I am teaching? That this is not a logical paradox is an illustration of the fact that the law is not logic; but I still feel that I am trapped in an impossible situation. It is hard for me as a law teacher to believe that this regulatory scheme that requires me to get a prior license each time that I speak about, or publish the details of, my trivial program (or, in the alternative, to make sure that no foreigners get to hear or read what I have to say about it) can withstand a constitutional challenge on First Amendment grounds. The "secret" of how to keep a secret in 170 bytes or less is not something that imposes any conceivable threat to the security of the United States, especially not when the underlying algorithm is well known to most who are, and many who aren't, knowledgeable about computers--or, for that matter, about logic. And thus the government can't constitutionally punish me for revealing this "secret" of mine or talking and writing about how it works. And even if the government could constitutionally punish me after the fact, that does not mean that they can impose a prior restraint on my speaking or writing about the "secret". Prior restraints on speech or publication--and especially licensing schemes--are especially vulnerable to constitutional attack, since the First Amendment provisions relating to the freedom of speech and of the press were adopted in large part to prevent the federal government from adopting the type of censorship and licensing that had prevailed in England under the Tudor and Stuart monarchies. And yet I am so intimidated and disheartened by this unconstitutional scheme that I dare not explain in a submission to Risks, which undoubtedly has foreign subscribers, how my silly little program works. And even if I were willing to take that risk, I could not in good conscience impose it on our moderator. And if I have problems now, just think how ridiculous the situation will be if the government tries to outlaw all encryption programs and devices other than the Clipper Chip. [For those of you who understand how my program works and who take the effort to write your own encryption program based on that understanding, I have a special offer. If you will just send me an E-mail message certifying that you are a United States Citizen, I will send you (at any address on the internet that is within the United States), a UUENCODEd key that when applied by your program to this particular submission to Risks--after all headers have been stripped off--will produce a working copy of my program, which is a COM file that runs under MSDOS. (Be sure that your copy of this submission uses the Carriage Return / Line Feed combination as the End of Line indicator.)] Peter D. Junger Case Western Reserve University Law School, Cleveland, OH Internet: JUNGER@SAMSARA.LAW.CWRU.Edu -- Bitnet: JUNGER@CWRU - -- From: mnemonic@eff.org (Mike Godwin) Subject: Cardozo Law Forum article on the Craig Neidorf Computer-Crime Message-ID: <1992Dec1.155823.27405@eff.org> Date: Tue, 1 Dec 1992 15:58:23 GMT Readers of misc.legal and comp.org.eff.talk may be interested in the following article, which addresses the intersection of intellectual-property law and criminal law in a computer-crime case. The article first appeared in September in the Cardozo Law Forum at Cardozo Law School in New York City. ---------- Some "Property" Problems in a Computer Crime Prosecution By Mike Godwin The spread and pervasiveness of computer technology create the potential both for new kinds of crimes and for new variations of traditional crimes. Law enforcement, the judiciary, and the legislature can respond to these potentials in two ways: by seeking new laws to address new problems, or by attempting to apply old laws (and traditional notions of crime) in new and unforeseen situations. This article concerns what hazards may face prosecutors and judges when law enforcement chooses the latter tactic. In particular, it shows what can happen when prosecutors uncritically apply intellectual property notions in prosecuting a defendant under laws passed to protect tangible property. The government stumbles in a "hacker" case. In the recent case of U.S. v. Riggs, the Chicago U.S. Attorney's office prosecuted two young men, Robert Riggs and Craig Neidorf, on counts of wire fraud (18 U.S.C. 1343), interstate transportation of stolen property (18 U.S.C. 2314) and computer fraud (18 U.S.C. 1030). Of these statutes, only the last was passed specifically to address the problems of unauthorized computer intrusion; the other two are "general purpose" federal criminal statutes that are used by the government in a wide range of criminal prosecutions. The wire fraud statute includes as an element the taking (by fraudulent means) of "money or property," while the interstate-transportation-of-stolen-property (ITSP) statute requires, naturally enough, the element of "goods, wares, merchandise, securities or money, of the value of $5,000 or more." (I do not address here the extent to which the notions of "property" differ between these two federal statutes. It is certain that they do differ to some extent, and the interests protected by the wire-fraud statute were expanded in the 1980s by Congress to include "the intangible right to honest services." 18 U.S.C. 1346.. Even so, the prosecution in the Riggs case relies not on 1346, but on intellectual-property notions, which are the focus of this article.) The 18 U.S.C. 1030 counts against Neidorf were dropped in the government's June 1990 superseding indictment, the indictment actually used at Neidorf's trial in July 1990. The Riggs case is based on the following facts: Robert Riggs, a computer "hacker" in his early '20s, discovered that he could easily gain access to an account on a computer belonging to Bell South, one of the Regional Bell Operating Companies (RBOCs). The account was highly insecure--access to it did not require a password (a standard, if not always effective, security precaution). While exploring this account, Riggs discovered a word-processing document detailing procedures and definitions of terms relating the Emergency 911 system ("E911 system"). Like many hackers, Riggs had a deep curiosity about the workings of this country's telephone system. (This curiosity among young hackers is a social phenomenon that has been documented for more than 20 years. See, e.g., Rosenbaum, "Secrets of the Little Blue Box," Esquire, October 1971; and Barlow, "Crime and Puzzlement: In Advance of the Law on the Electronic Frontier," Whole Earth Review, September 1990.) Riggs knew that his discovery would be of interest to Craig Neidorf, a Missouri college student who, while not a hacker himself, was an amateur journalist whose electronically distributed publication, Phrack, was devoted to articles of interest to computer hackers. Riggs sent a copy of the E911 document to Neidorf over the telephone line--using computer and modem--and Neidorf edited the copy to conceal its origin. Among other things, Neidorf removed the statements that the information contained in the document was proprietary and not for distribution. Neidorf then sent the edited copy back to Riggs for the latter's review; following Riggs's approval of the edited copy, Neidorf published the E911 document in the February 24, 1989, issue of Phrack. Some months following publication of the document in Phrack, both Riggs and Neidorf were caught and questioned by the Secret Service, and all systems that might contain the E911 document were seized pursuant to evidentiary search warrants. Riggs and Neidorf were indicted on the counts discussed supra; Riggs, whose unauthorized access to the BellSouth computer was difficult to dispute, later pled guilty to wire fraud for that conduct. Neidorf pled innocent on all counts, arguing, inter alia, that his conduct was protected by the First Amendment, and that he had not deprived Bell South of property as that notion is defined for the purposes of the wire fraud and ITSP statutes. The two defenses are closely related. Under the First Amendment, the presumption is that information is free, and that it can readily be published and republished. For this reason, information gives rise to a property interest only if it passes certain legal tests. Law enforcement cannot simply assume that whenever information has been copied from a private computer system a theft has taken place. In Neidorf's case, as it turns out, this is essentially what the Secret Service and the U.S. Attorney's office did assume. The assumption came back to haunt the government when it was revealed during trial that the information contained within the E911 document did not meet any of the relevant legal tests to be established as a property interest. How information becomes stealable property. In order for information to be stolen property, it must first be property. There are only a few ways that information can qualify as a property interest, and two of these--patent law and copyright law--are creatures of federal statute, pursuant to an express Constitutional grant of legislative authority. (U.S. Constitution, Article I, Sec. 8, clause 8.) Patent protections were clearly inapplicable in the Neidorf case; the E911 document, a list of definitions and procedures, did not constitute an invention or otherwise patentable process or method. Copyright law might have looked more promising to Neidorf's prosecutors, since it is well established that copyrights qualify as property interests in some contexts (e.g., the law of inheritance). Unfortunately for the government, the Supreme Court has explicitly stated that copyrighted material is not property for the purposes of the ITSP statute. In Dowling v. United States, 473 U.S. 207 (1985), the Court held that interests in copyright are outside the scope of the ITSP statute. (Dowling involved a prosecution for interstate shipments of pirated Elvis Presley recordings.) In reaching its decision, the Court held, inter alia, that 18 U.S.C. $ 2314 contemplates "a physical identity between the items unlawfully obtained and those eventually transported, and hence some prior physical taking of the subject goods." Unauthorized copies of copyrighted material do not meet this "physical identity" requirement. The Court also reasoned that intellectual property is different in character from property protected by generic theft statutes: "The copyright owner, however, holds no ordinary chattel. A copyright, like other intellectual property, comprises a series of carefully defined and carefully delimited interests to which the law affords correspondingly exact protections." The Court went on to note that a special term of art, "infringement," is used in reference to violations of copyright interests--thus undercutting any easy equation between unauthorized copying and "stealing" or "theft." It is clear, then, that in order for the government to prosecute the unauthorized copying of computerized information as a theft, it must rely on other theories of information-as-property. Trade secret law is one well-established legal theory of this sort. Another is the breach-of-confidence theory articulated recently by the Supreme Court in Carpenter v. United States, 108 S.Ct. 316 (1987). I will discuss each theory in turn below. Trade Secrets Trade secrets are generally creatures of state law, and most jurisdictions have laws that criminalize the violations of a trade-secret holder's rights in the secret. There is no general federal definition of what a trade secret is, but there have been federal cases in which trade-secret information has been used to establish the property element of a federal property crime. See, e.g., United States v. Bottone, 365 F.2d 389 (2d Cir.), cert denied, 385 U.S. 974 (1966), affirming ITSP convictions in a case involving a conspiracy to steal drug-manufacturing bacterial cultures and related documents from a pharmaceutical company and sell them in foreign markets. (In Bottone, a pre-Dowling appellate court expressed a willingness to interpret 18 U.S.C. $ 2314 as encompassing the interstate transportation of copies of documents detailing the drug-manufacturing process, i.e., it did not require the "physical identity" element discussed supra. Recognizing possible problems with this approach, however, the appellate court reasoned in the alternative that the bacterial cultures themselves provided a sufficient nexus of a tangible property interest to justify application of the ITSP statute; this alternative analysis may render Bottone consistent with Dowling. It should be noted that the post-Dowling judge in Riggs expressed, in his denial of a motion to dismiss, 739 F.Supp. 414 (N.D.Ill, 1990), a similar willingness not to require actual physical identity as a predicate for ITSP. An appellate court later criticized this decision. U.S. v. Brown, 925 F.2d 1301 (1991).) The problem in using a trade secret to establish the property element of a theft crime is that, unlike traditional property, information has to leap several hurdles in order to be established as a trade secret. Trade secret definitions vary somewhat from state to state, but the varying definitions typically have most elements in common. One good definition of "trade secret" is outlined by the Supreme Court in Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (1974): "a trade secret may consist of any formula, pattern, device or compilation of information which is used in one's business, and which gives one an opportunity to obtain an advantage over competitors who do not know or use it. It may be a formula for a chemical compound, a process of manufacturing, treating or preserving materials, a pattern for a machine or other device, or a list of customers." The Court went further and listed the particular attributes of a trade secret * The information must, in fact, be secret--"not of public knowledge or of general knowledge in the trade or business." * A trade secret remains a secret if it is revealed in confidence to someone who is under a contractual or fiduciary obligation, express or implied, not to reveal it. * A trade secret is protected against those who acquire via unauthorized disclosure, violation of contractual duty of confidentiality, or through "improper means." ("Improper means" includes such things as theft, bribery, burglary, or trespass. The Restatement of Torts at 757 defines such means as follows: "In general they are means which fall below the generally accepted standards of commercial morality and reasonable conduct.") * A court will allow a trade secret to be used by someone who discovered or developed the trade secret independently (that is, without taking it in some way from the holder), or if the holder does not take adequate precautions to protect the secret. * An employee or contractor who, while working for a company, develops or discovers a trade secret, generally creates trade secret rights in the company. The holder of a trade secret may take a number of steps to meet its obligation to keep the trade secret a secret. These may include: a) Labelling documents containing the trade secret "proprietary" or "confidential" or "trade secret" or "not for distribution to the public;" b) Requiring employees and contractors to sign agreements not to disclose whatever trade secrets they come in contact with; c) destroying or rendering illegible discarded documents containing parts or all of the secret, and; d) restricting access to areas in the company where a nonemployee, or an employee without a clear obligation to keep the information secret, might encounter the secret. Dan Greenwood's Information Protection Advisor, April 1992, page 5. Breach-of-confidence Even if information is not protected under the federal patent and copyright schemes, or under state-law trade-secret provisions, it is possible, according to the Supreme Court in Carpenter, for such information to give rise to a property interest when its unauthorized disclosure occurs via the breach of confidential or fiduciary relationship. In Carpenter, R. Foster Winans, a Wall Street Journal reporter who contributed to the Journal's "Heard on the Street" column, conspired with Carpenter and others to reveal the contents of the column before it was printed in the Journal, thus allowing the conspirators to buy and sell stock with the foreknowledge that stock prices would be affected by publication of the column. Winans and others were convicted of wire fraud; they appealed the wire-fraud convictions on the grounds that had not deprived the Journal of any money or property. It should be noted that this is not an "insider trading" case, since Winans was no corporate insider, nor was it alleged that he had received illegal insider tips. The "Heard on the Street" column published information about companies and stocks that would be available to anyone who did the requisite research into publicly available materials. Since the information reported in the columns did not itself belong to the Journal, and since the Journal planned to publish the information for a general readership, traditional trade secret notions did not apply. Where was the property interest necessary for a wire-fraud conviction? The Supreme Court reasoned that although the facts being reported in the column were not exclusive to the Journal, the Journal's right--presumably based in contract--to Winans' keeping the information confidential gave rise to a property interest adequate to support a wire-fraud conviction. Once the Court reached this conclusion, upholding the convictions of the other defendants followed: even if one does not have a direct fiduciary duty to protect a trade secret or confidential information, one can become civilly or criminally liable if one conspires with, solicits, or aids and abets a fiduciary to disclose such information in violation of that person's duty. The Court's decision in Carpenter has received significant criticism in the academic community for its expansion of the contours of "intangible property," but it remains good law today. How the theories didn't fit With these two legal approaches--trade secrets and breach of confidence--in mind, we can turn back to the facts of the Riggs case and see how well, or how poorly, the theories applied in the case of Craig Neidorf. With regard to any trade-secret theory, it is worth noting first of all that the alleged victim, BellSouth, is a Regional Bell Operating Company--a monopoly telephone-service provider for a geographic region in the United States. Recall the observation in Kewanee Oil, supra, that a trade secret "gives one an opportunity to obtain an advantage over competitors who do not know or use it." There are strong arguments that--at least so far as the provision of Emergency 911 service goes--BellSouth has no "competitors" within any normal meaning of the term. And even if BellSouth did have competitors, it is likely that they would both know and use the E911 information, since the specifications of this particular phone service are standardized among the regional Bells. Moreover, as became clear in the course of the Neidorf trial, the information contained in the E911 document was available to the general public as well, for a nominal fee. (One of the dramatic developments at trial occurred during the cross-examination of a BellSouth witness who had testified that the E911 document was worth nearly $80,000. Neidorf's counsel showed her a publication containing substantially the same information that was available from a regional Bell or from Bellcore, the Bells' research arm, for $13 to any member of the public that ordered it over an 800 number.) Under the circumstances, if the Bells wanted to maintain the E911 information as a trade secret, they hadn't taken the kind of steps one might normally think a keeper of a secret would take. BellSouth had, however, taken the step of labelling the E911 document as "NOT TO BE DISCLOSED OUTSIDE OF BELLSOUTH OR ITS SUBSIDIARIES" (it was this kind of labelling that Neidorf attempted to remove as he edited the document for publication in Phrack). This fact may have been responsible for the federal prosecutors' oversight in not determining prior to trial whethe E911 document met the tests of trade-secret law. It is possible that prosecutors, unfamiliar with the nuances of trade-secret law, read the "proprietary" warnings and, reasonining backwards, concluded that the information thus labelled must be trade-secret information. If so, this was a fatal error on the government's part. In the face of strong evidence that the E911 document was neither secret nor competitively or financially very valuable, any hope the government had of proving the document to be a trade secret evaporated. (Alternatively, the government may have reasoned that the E911 information could be used by malicious hackers to damage the telephone system in some way. The trial transcript shows instances in which the government attempted to elicit information of this sort. It should be noted, however, that even if the information did lend itself to abuse and vandalism, this fact alone does not bring it within the scope of trade-secret law.) Nor did the facts lend themselves to a Carpenter-like theory based on breach of confidence; Neidorf had no duties to BellSouth not to disclose its information. Neither did Riggs, from whom Neidorf acquired a copy of the document. The Riggs case lacks the linchpin necessary for a conviction based on Carpenter--in order for nonfiduciaries to be convicted, there must be a breaching fiduciary involved in the scheme in some way. There can be no breach of a duty of confidence when there is no duty to be breached. Thus, when its trade-secret theory of the E911 document was demolished in mid-trial, the government had no fall-back theory to rely on with regard to its property-crime counts, and the prosecution quickly sought a settlement on terms favorable to Neidorf, dropping prosecution of the case in return for Neidorf's agreement to a pre-trial diversion on one minor count. The lesson to be learned from Riggs is that it is no easy task to establish the elements of a theft crime when the property in question is information. There are good reasons, in a free society, that this should be so--the proper functioning of free speech and a free press require that information be presumptively protected from regulation by government or by private entities invoking the civil or criminal law property protections. The government in Riggs failed in its duty to recognize this presumption by failing to make the necessary effort to understand the intellectual property issues of the case. Had it done so, Neidorf might have been spared an expensive and painful trial, and the government might have been spared a black eye.* ------ *See, e.g., "Score One for the Hackers of America," NEWSWEEK, Aug. 6 1990, page 48, and "Dial 1-800 ... for BellSouth 'Secrets'," COMPUTERWORLD, Aug. 6, 1990, page 8. _______________________________________________ Mike Godwin, a 1990 guaduate of the University to Texas School of Law, is staff counsel for the Electronic Frontier Foundation. EFF filed an amicus curiae brief in the Neidorf case, arguing that Neidorf's attempted publication of the E911 document was protected speech under the First Amendment. Godwin received a B.A. in liberal arts from the University of Texas at Austin in 1980. Prior to law school, Godwin worked as a journalist and as a computer consultant. - -- Date: Wed, 2 Jun 1993 17:08:40 EST Sender: Computer Professionals for Social Responsibility <uunet!VTVM2.CC.VT.EDU!CPSR%GWUVM.BITNET> From: David Sobel <uunet!washofc.cpsr.org!dsobel> Organization: CPSR Civil Liberties and Computing Project Subject: CPSR NIST Crypto Statement CPSR NIST Crypto Statement ============================================== Department of Commerce National Institute of Standards and Technology Computer System Security and Privacy Advisory Board Review of Cryptography Policy June 1993 Statement of CPSR Washington office Marc Rotenberg, director (rotenberg@washofc.cpsr.org) with David Sobel, legal counsel, Dave Banisar, policy analyst Mr. Chairman, members of the Advisory Panel, thank you for the opportunity to speak today about emerging issues on cryptography policy. My name is Marc Rotenberg and I am director of the CPSR Washington office. Although CPSR does not represent any computer firm or industry trade association, we speak for many in the computer profession who value privacy and are concerned about the government's Clipper proposal. During the last several years CPSR has organized several meetings to promote public discussion of cryptography issues. We have also obtained important government documents through the Freedom of Information Act. We believe that good policies will only result if the public, the profession, and the policy makers are fully informed about the significance of these recent proposals. We are pleased that the Advisory Board has organized hearings. This review of cryptography policy will help determine if the Clipper proposal is in the best interests of the country. We believe that a careful review of the relevant laws and policies shows that the key escrow arrangement is at odds with the public interest, and that therefore the Clipper proposal should not go forward. Today I will address issues 1 through 3 identified in the NIST announcement, specifically the policy requirements of the Computer Security Act, the legal issues surrounding the key escrow arrangement, and the importance of privacy for network development. 1. CRYPTOGRAPHY POLICY The first issue concerns the 1987 statute enacted to improve computer security in the federal government, to clarify the responsibilities of NIST and NSA, and to ensure that technical standards would serve civilian and commercial needs. The Computer Security Act, which also established this Advisory Panel, is the true cornerstone of cryptography policy in the United States. That law made clear that in the area of unclassified computing systems, the Department of Commerce and not the Department of Defense, would be responsible for the development of technical standards. It emphasized public accountability and stressed open decision-making. The Computer Security Act grew out of a concern that classified standards and secret meetings would not serve the interests of the general public. As the practical applications for cryptography have moved from the military and intelligence arenas to the commercial sphere, this point has become clear. There is also clearly a conflict of interest when an agency tasked with signal interception is also given authority to develop standards for network security. In the spirit of the Computer Security Act, NIST set out in 1989 to develop a public key standard FIPS. In a memo dated May 5, 1989 and obtained by CPSR through the Freedom of Information Act, NIST said that it planned: to develop the necessary public-key based security standards. We require a public-key algorithm for calculating digital signatures and we also require a public-key algorithm for distributing secret keys. NIST then went on to define the requirements of the standard: The algorithms that we use must be public, unclassified, implementable in both hardware or software, usable by federal Agencies and U.S. based multi-national corporation, and must provide a level of security sufficient for the protection of unclassified, sensitive information and commercial propriety and/or valuable information. The Clipper proposal and the full-blown Capstone configuration, which incorporates the key management function NIST set out to develop in 1989, is very different from the one originally conceived by NIST. % The Clipper algorithm, Skipjack, is classified, % Public access to the reasons underlying the proposal is restricted, % Skipjack can be implemented only in tamper-proof hardware, % It is unlikely to be used by multi-national corporations, and % Its security remains unproven. The Clipper proposal undermines the central purpose of the Computer Security Act. Although intended for broad use in commercial networks, it was not developed at the request of either U.S. business or the general public. It does not reflect public goals. Rather it reflects the interests of one secret agency with the authority to conduct foreign signal intelligence and another government agency responsible for law enforcement investigations. It is our belief that the Clipper proposal clearly violates the intent of the Computer Security Act of 1987. What is the significance of this? It is conceivable that an expert panel of cryptographers will review the Skipjack algorithm and find that it lives up its billing, that there is no "trap door" and no easy way to reverse-engineer. In fact, the White House has proposed just such a review process But is this process adequate? Is this the procedure the Advisory Board would endorse for the development of widespread technical standards? The expert participants will probably not be permitted to publish their assessments of the proposal in scientific journals, further review of the standard will be restricted, and those who are skeptical will remain in the dark about the actual design of the chip. This may be an appropriate process for certain military systems, but it is clearly inappropriate for a technical standard that the government believes should be widely incorporated into the communications infrastructure. Good government policy requires that certain process goals be satisfied. Decisions should be made in the open. The interests of the participating agencies should be clear. Agencies should be accountable for their actions and recommendations. Black boxes and government oversight are not compatible. There is an even greater obligation to promote open decisions where technical and scientific issues are at stake. Innovation depends on openness. The scientific method depends on the ability of researchers to "kick the tires" and "test drive" the product. And, then, even if it is a fairly good design, additional testing encourages the development of new features, improved performance and reduced cost. Government secrecy is incompatible which such a development process. Many of these principles are incorporated into the Computer Security Act and the Freedom of Information Act. The current government policy on the development of unclassified technical standards, as set out in the Computer Security Act, is a very good policy. It emphasizes public applications, stresses open review, and ensures public accountability. It is not the policy that is flawed. It is the Clipper proposal. To accept the Clipper proposal would be to endorse a process that ran contrary to the law, that discourages innovation, and that undermines openness. 2. LEGAL AND CONSTITUTIONAL ISSUES There are several legal and constitutional issues raised by the government's key escrow proposal. The premise of the Clipper key escrow arrangement is that the government must have the ability to intercept electronic communications, regardless of the economic or societal costs. The FBI's Digital Telephony proposal, and the earlier Senate bill 266, was based on the same assumption. There are a number of arguments made in defense of this position: that privacy rights and law enforcement needs must be balanced, or that the government will be unable to conduct criminal investigations without this capability. Regardless of how one views these various claims, there is one point about the law that should be made very clear: currently there is no legal basis -- in statute, the Constitution or anywhere else -- that supports the premise which underlies the Clipper proposal. As the law currently stands, surveillance is not a design goal. General Motors would have a stronger legal basis for building cars that could not go faster than 65 miles per hour than AT&T does in marketing a commercial telephone that has a built-in wiretap capability. In law there is simply nothing about the use of a telephone that is inherently illegal or suspect. The federal wiretap statute says only that communication service providers must assist law enforcement in the execution of a lawful warrant. It does not say that anyone is obligated to design systems to facilitate future wire surveillance. That distinction is the difference between countries that restrict wire surveillance to narrow circumstances defined in law and those that treat all users of the telephone network as potential criminals. U.S. law takes the first approach. Countries such as the former East Germany took the second approach. The use of the phone system by citizens was considered inherently suspect and for that reason more than 10,000 people were employed by the East German government to listen in on telephone calls. It is precisely because the wiretap statute does not contain the obligation to incorporate surveillance capability -- the design premise of the Clipper proposal -- that the Federal Bureau of Investigation introduced the Digital Telephony legislation. But that legislation has not moved forward on Capitol Hill and the law has remained unchanged. The Clipper proposal attempts to accomplish through the standard-setting and procurement process what the Congress has been unwilling to do through the legislative process. On legal grounds, adopting the Clipper would be a mistake. There is an important policy goal underlying the wiretap law. The Fourth Amendment and the federal wiretap statute do not so much balance competing interests as they erect barriers against government excess and define the proper scope of criminal investigation. The purpose of the federal wiretap law is to restrict the government, it is not to coerce the public. Therefore, if the government endorses the Clipper proposal, it will undermine the basic philosophy of the federal wiretap law and the fundamental values embodied in the Constitution. It will establish a technical mechanism for signal interception based on a premise that has no legal foundation. I am not speaking rhetorically about "Big Brother." My point is simply that the assumption underlying the Clipper proposal is more compatible with the practice of telephone surveillance in the former East Germany than it is with the narrowly limited circumstances that wire surveillance has been allowed in the United States. There are a number of other legal issues that have not been adequately considered by the proponents of the key escrow arrangement that the Advisory Board should examine. First, not all lawful wiretaps follow a normal warrant process. It is critical that the proponents of Clipper make very clear how emergency wiretaps will be conducted before the proposal goes forward. Second, there may be civil liability issues for the escrow agents if there is abuse or compromise of the keys. Escrow agents may be liable for any harm that results. Third, there is a Fifth Amendment dimension to the proposed escrow key arrangement if a network user is compelled to disclose his or her key to the government in order to access a communications network. Each one of these issues should be examined. There is also one legislative change that we would like the Advisory Board to consider. During our FOIA litigation, the NSA cited a 1951 law to withhold certain documents that were critical to understand the development of the Digital Signature Standard. The law, passed grants the government the right restrict the disclosure of any classified information pertaining to cryptography. While the government may properly withhold classified information in FOIA cases, the practical impact of this particular provision is to provide another means to insulate cryptographic policy from public review. Given the importance of public review of cryptography policy, the requirement of the Computer Security Act, and the Advisory Board's own commitment to an open, public process, we ask the Advisory Board to recommend to the President and to the Congress that section 798 be repealed or substantially revised to reflect current circumstances. This is the one area of national cryptography policy where we believe a change is necessary. 3. INDIVIDUAL PRIVACY Communications privacy remains a critical test for network development. Networks that do not provide a high degree of privacy are clearly less useful to network users. Given the choice between a cryptography product without a key escrow and one with a key escrow, it would be difficult to find a user who would prefer the key escrow requirement. If this proposal does go forward, it will not be because network users or commercial service providers favored it. Many governments are now facing questions about restrictions on cryptography similar to the question now being raised in this country. It is clear that governments may choose to favor the interests of consumers and businesses over law enforcement. Less than a month ago, the government of Australia over-rode the objections of law enforcement and intelligence agencies and allowed the Australian telephone companies to go forward with new digital mobile phone networks, GSM, using the A5 robust algorithm. Other countries will soon face similar decisions. We hope that they will follow a similar path To briefly summarize, the problem here is not the existing law on computer security or policies on cryptography and wire surveillance. The Computer Security Act stresses public standards, open review, and commercial applications. The federal wiretap statute is one of the best privacy laws in the world. With the exception of one provision in the criminal code left over from the Cold War, our current cryptography policy is very good. It reflects many of the values -- individual liberty, openness, government accountability -- that are crucial for democratic societies to function. The problem is the Clipper proposal. It is an end-run around policies intended to restrict government surveillance and to ensure agency accountability. It is an effort to put in place a technical configuration that is at odds with the federal wiretap law and the protection of individual privacy. It is for these reasons that we ask the Advisory Board to recommend to the Secretary of Commerce, the White House, and the Congress that the current Clipper proposal not go forward. I thank you for the opportunity to speak with you about these issues. I wish to invite the members of the Advisory Committee to the third annual CPSR Privacy and Cryptography conference that will be held Monday, June 7 in Washington, DC at the Carnegie Endowment for International Peace. That meeting will provide an opportunity for further discussion about cryptography policy. ATTACHMENTS "TWG Issue Number: NIST - May 5, 1989," document obtained by CPSR as a result of litigation under the Freedom of Information Act. "U.S. as Big Brother of Computer Age," The New York Times, May 6, 1993, at D1. "Keeping Fewer Secrets," Issues in Science and Technology, vol. IX, no. 1 (Fall 1992) "The Only Locksmith in Town," The Index on Censorship (January 1990) [The republication of these articles for the non-commercial purpose of informing the government about public policy is protected by section 107 of the Copyright Act of 1976] - -- End of Legal Net News v1i8