FOR IMMEDIATE RELEASE:             NIST 94-28
July 11, 1994

Contact:  Anne Enright Shepherd    PATENT AGREEMENT REMOVES
          (301) 975-4858           PERCEIVED BARRIER TO
                                   TELECOMMUNICATIONS SECURITY
                                   SYSTEM

     The Department of Commerce's National Institute of Standards
and Technology today announced a licensing agreement in principle
with Silvio Micali of Brookline, Mass., for two of his inventions
that relate to "key escrow" encryption.

     The federal government's voluntary key escrow encryption
system provides very strong security for voice, fax and data
communications over telephone lines while allowing lawful
government access.  Micali's inventions refer to the process by
which a digital "key" is divided into components, safeguarded by
separate agents and combined when legally authorized in order to
decode the communication of someone suspected of criminal
activity.

      This license agreement eliminates concerns Micali raised
about possible infringement of his patents in key escrow
encryption.  It also removes a perceived barrier to the
Administration's voluntary key escrow encryption program for
telecommunications security and other new encryption approaches
potentially covered by Micali patents.

     The agreement in principle grants the government
non-exclusive licenses to Micali's patented inventions for
current implementations of the escrowed key process -- including
those generally known as Clipper and Capstone technologies -- and
for future implementations that may be developed using those
inventions.

     The agreement will not result in any changes for users of
the voluntary escrowed encryption standard adopted by NIST for
the federal government because it covers everyone, within or
outside the government, using a key escrow encryption system
developed for authorized government law enforcement purposes.
NIST plans to purchase the patent rights from Micali in formal
procurement actions now under way.

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