Originally created 12/20/96

Software export limits violate free speech, judge rules



SAN JOSE, Calif. - Computer programming code is a form of speech, and federal rules barring the export of data-scrambling software violate the Constitution's free speech protections, a federal judge in San Francisco ruled.

In a decision with potentially broad impact on the computer industry and national security, U.S. District Judge Marilyn Hall Patel said Daniel Bernstein, a mathematics professor in Illinois, can't be forced to submit to the government's licensing scheme for exporting his software. The ruling was made public Wednesday.

Civil libertarians and industry leaders hailed Patel's ruling as a boost for free speech and the U.S. computer industry - and a damaging blow to the Clinton administration's continuing efforts to restrict the export of encryption, a technology it considers a threat to law enforcement and national security. A White House spokeswoman expressed disappointment.

Bernstein's lawyer, Cindy Cohn of McGlashan and Sarrail, a law firm based in San Mateo, Calif., said she expected the government to keep fighting for encryption controls. The Justice Department declined to comment before seeing the ruling.

Encryption is the science of scrambling electronic messages and other data to keep them private. Using complex mathematical formulas, strong enough encryption software makes it nearly impossible for anyone other than the intended recipient to decode the message. The government classifies encryption software as a weapon under regulations designed to prevent people from exporting arms without a government-granted license.

The ruling is important to the computer industry because software and hardware companies have been unable to sell products overseas containing strong encryption, which the government wants to restrict to domestic use. Patel's ruling, if it stands, could spur such sales.

"This is the first rational ruling to come out of the government on export control that I've ever seen," said Jim Bidzos, chief executive officer of RSA Data Security, a Redwood City, Calif. company that sells encryption tools. "It has been so frustrating for me, being here 11 years developing and nurturing this technology ... to watch foreign competitors exploit the opportunity created by export controls."

The ruling "provides a level playing field that, quite frankly, many of us had given up hope of seeing," he said.

The Clinton administration knew earlier this year that it stood a good chance of losing the San Francisco case when Patel refused to throw the case out of court, citing the First Amendment.

"This is not an unexpected decision for this judge on this ruling," said Ginny Terzano, a press secretary in the vice president's office. "We're disappointed."

The Bernstein case is one of several ongoing encryption battles pitting the federal government - especially law-enforcement and national-security officials - against a coalition of civil libertarians, privacy advocates and the computer industry.

Cyberspace privacy advocates have supported strong encryption as an essential tool for personal privacy as more and more information is stored and transmitted in binary (zeroes and ones) form. And the computer industry says it is losing sales to overseas competitors due to the export restrictions.

But the government says encryption is a boon for terrorists and money launderers, and thwarts such investigative tools as eavesdropping. Not only does the government want to keep limits on what kinds of encryption programs can be exported, it is also trying to persuade users of encryption to adopt a system under which their "keys" - which unlock scrambled data - will be available to law enforcement when a crime is suspected.

Bernstein jumped into this long-running battle when, as a graduate student at the University of California-Berkeley, he wrote an encryption program called Snuffle. In 1992 he asked the State Department whether his program and other written materials on the topic were covered under the export regulations, called the International Traffic in Arms Regulations, or ITAR. The government said yes, setting off a long "and contentious" correspondence between Bernstein and the government, Patel wrote in her ruling.

Earlier this year Bernstein took the matter to court, asking that the regulations be ruled unconstitutional when applied to programming code. He was joined by the Electronic Frontier Foundation (EFF), an organization that promotes civil liberties in cyberspace, and received help from other activists.

Cohn centered part of her argument around a 1965 Supreme Court ruling saying the government had to meet a very high standard to regulate speech: that it make a quick decision, that it provide for quick review by the courts and that the government had to bring such cases to court itself and prove its case.

"The ITAR scheme, a paradigm of standardless discretion, fails on every count," Patel wrote, calling the regulations "an unconstitutional prior restraint in violation of the First Amendment."

Because the regulations were found unconstitutional, the ruling will apply nationally, Cohn said.

The U.S. Department of Commerce, which now has authority over export controls, is about to issue new regulations. John Gilmore, a Silicon Valley programmer, EFF official and part of the team helping Bernstein, said Patel "has undercut the new regulations" - which were apparently going to take the position that the government could even prevent the export of books containing printed information about encryption.

Gilmore called the ruling "very good news" that will hearten companies trying to build hardware and software containing strong encryption.

For his part, Bernstein can now go ahead and teach, as he planned, a course on encryption this winter at the University of Illinois-Chicago, where he is an assistant professor.

Bernstein could not be reached for comment, but in a statement released by EFF he said: "I'm very pleased. Now I won't have to tell my students to burn their notebooks."

(Mercury News staff writers Jodi Mardesich, Janet Rae-Dupree and Elizabeth Wasserman contributed to this report.)

(c) 1996, San Jose (Calif.) Mercury News