3.1.5 Is cryptography patentable in the U.S.?

  Cryptographic systems are patentable. Many secret-key cryptosystems have been patented, including DES (see Question 3.5.1). The basic ideas of public-key cryptography are contained in U.S. Patent 4,200,770, by M. Hellman, W. Diffie, and R. Merkle, issued 4/29/80 and in U.S. Patent 4,218,582, by M. Hellman and R. Merkle, issued 8/19/80; similar patents have been issued throughout the world. The exclusive licensing rights to both patents are held by Public Key Partners (PKP), of Sunnyvale, California, which also holds the rights to the RSA patent (see Question 3.2.19). Usually all of these public-key patents are licensed together.

All legal challenges to public-key patents have been settled before judgment. In a recent case, for example, PKP brought suit against the TRW Corporation which was using public-key cryptography (the ElGamal system) without a license; TRW claimed it did not need to license. In June 1992 a settlement was reached in which TRW agreed to license to the patents.

Some patent applications for cryptosystems have been blocked by intervention by the NSA (see Question 3.7.3) or other intelligence or defense agencies, under the authority of the Invention Secrecy Act of 1940 and the National Security Act of 1947.