-5-

“PADLOCK” : SOLUTION TO SOFTWARE PROTECT I ON?

Revenue return guaranteed

Open Computer Security Ltd., the Brighton Data Encryption Specialists, have released a new product, "PADLOCK", which they believe is the solution to the software protection problem. The principles applied are an extension of the techniques used for message authentication as used in electric funds transfer.

The application of cryptography for message secrecy or authentication is well-known. There are numerous algorithms in existence although in the commercial sector. The DES (US Data Encryption Standard) Scheme has now become the standard method for both secrecy and authentication schemes.

The DES algorithm is a symmetric key scheme where the same key is used for both encryption (scrambling) and decryption (unscrambling). Clearly this means that the key must be kept secret and one must devise a secure key management system. Without doubt, it is the key management of a cryptographic scheme that causes the most difficult problems.

The advent of Public Key cryptography, initially proposed by Diffie and Hellman in 1976, has resulted in a major breakthrough. The method relies on each party having both a public key and a secret key. Any party can send a message to another by encrypting the message with the public key of the recipient. Only the recipient can unscramble the message with his matching secret key.

The Padlock software protection device is a tamper resistant module containing encryption/decryption equipment for executing programs in real time. It is connected to the host computer by a serial or parallel bus.

It comprises the following elements:

(a) a DES encrypted process for executing encrypted code; (b) a real time clock for time stamping; (c) an RSA public key system for key management; (d) an interprocessor communications system; (e) optionally a 1200/1200 or 1200/75 modem for telesoftware or

secure mail purposes.

The programs are distributed in encrypted form such that copying can be performed in the normal way but execution can only take place through the use of a correctly configured Padlock device. The unlocking of the programs takes place through the use of a public key cryptographic system in such a fashion that a revenue return on the software product may be guaranteed and controlled.

The distribution of the software in encrypted format may be by any of the conventional methods including telesoftware. In either case the level of protection offered is such that the system may be considered practically impervious to attack. Depending on the RSA key size it can take a billion years or more to reach a solution on the largest-known computers.

A further facility of the Padlock scheme is the incorporation of a real-time clock and a usage counter, thereby enabling a reliable time bomb or usage stop point to be applied for software leasing or demonstration purposes.

Each computer system required to use the encrypted software must have a Padlock device attached to the machine. There are various ways of doing this, ranging between an RS232C port connection to a

Volume 5 Number 12 Cc) Elsevier International hlletins.

-6-

Utility program

Time stamp

direct bus implant. For the more common machines such as the IBM-PC there will be a direct bus connection through the use of a Padlock tamper resistant board.

It is important to note that only one Padlock device is required for each machine since the protection module can be configured to accommodate up to 100 different packages at any one time without user interaction. The Padlock device is totally transparent to existing software or conventional programs.

The software supplier distributes an encrypted version of his program to each potential user. No changes need to be made to the program. It is only necessary for the software supplier to run the supplied utility program which will effectively produce an encrypted version of his program in a few minutes. In order to execute the program the user must obtain the key to unlock the software. This can be done in such a way that the supplier is guaranteed the revenue for the program, yet the user cannot give copies of the software away even to owners of another Padlock device. This is undertaken by the use of a Public Key Crypt0 system where each Padlock device has its own unique public key.

The software is never available on the computer system except in encrypted format and it is only when the user requests to run such a program that the Padlock device comes into operation.

Instead of loading the encrypted program into main memory as normal, the program is loaded into the tamper resistant module. By the use of the cryptographic system incorporated in this module the program is now executed in real time within the Padlock device. All the host peripherals are used normally so that no changes are required in the software code.

By the use of the real time clock_or usage counter the system is able to check the time stamp on the key before starting execution of the supplied code. It would be practically impossible for the user to fool this time stamp since he would have to re-create the encrypted data with an unknown cryptographic key. It is not possible to copy programs from another user in such a manner.

SOFTWARE STRUCTURE

HOST COMPUTER PAOLOCK

Volume 5 Number 12

-7-

The Padlock software protection device is compatible with most of the better-known processors and offers the following principal features:

(a) inhibits pirate copying; (b) allows time-stamping for leasing and demonstration purposes; (c) enables software (and data) distribution by telephone; (d) inhibits illicit tampering with software packages.

Because of its powerful cryptographic features, Padlock may also be used for the following applications:

(a) message authentication; (b) message secrecy; (c) digital signatures; (d) line encryption.

David Everett Open Security Ltd

The most significant feature of software piracy is the variety of

POSSIBLE EFFECTS individuals involved. School children, businessmen, retailers,

OF LEGISLATION commercial blackmarketeers and software writers themselves may all be taking illegal copies - and probably are.

For convenience, piracy may be said to take three forms:

1. The Commercial Blackmarket

The continued expansion of the mass market indicates a likely target for large-scale counterfeiting. Microcomputers are already threatened by hardware counterfeiting on a growing scale. Apple is pursuing actions in Holland and the USA against distributors of Taiwanese fakes. Software is even more vulnerable - particularly in the case of video games, which have an obvious parall.el with autio and video cassettes, and popular packages.

2. "Seeping"

This is unauthorised copying on a small scale, in its "culturally acceptable" form. "Seepers" appear in a variety of guises: business users giving copies to friends and colleagues, schoolchildren copying each others' video games, borrowers from software libraries copying a program on loan, or purchasers taking a copy of, and then spoiling, the original, in order to obtain a refund from the retailer.

Graeatest effect "Seeping" has the greatest effect, at the moment, on the software industry, reducing demand in the personal and business user market. Apple's estimation that the ratio of legitimate sales of "Visicalc" to copies pirated by "seepers" is 1 to 10 may be high (it presupposes that 11 million copies are in existence) but even at a 1 to I. ratio, their losses would be E120m.

Only programs of limited interest or specialist application are free from "seeping".

Volume 5 Number 12