Rivals celebrate as RSA loses 'anti competitive' encryption patent

Rival security vendors promised greater competition in the ecommerce security market after a 20 year-old patent held by RSA Security for its encryption algorithm was lifted two weeks early.

RSA's public key encryption algorithm provides the basis for most forms of web security and is embedded in all Netscape and Explorer browsers.

The patent prevented rival vendors from using the algorithm in any products sold in the US.

Michael Duffy, product manager at Baltimore Technologies, said: "The expiry of the RSA patent is a great day for ebusiness.

"Until today an artificial and constrained market has existed which has slowed the growth of ecommerce and caused distrust of the internet."

Duffy said: "We couldn't sell our security tools in the US, we had to go to RSA and negotiate rights to sell our products - but they refused."

According to Duffy the lack of US rights meant sales of development tools elsewhere were impacted, because anyone using them to build applications would be unable to export those products into America.

"Several big software companies have been forced into licensing agreements with RSA," he said.

Mark Reeves, VP EMEA at RSA, said the company had a responsibility to protect its patent.

"Like anyone you have to protect your intellectual property if you're going to do business and make money," he said. "We have licensing agreements with Baltimore, Entrust and other vendors."

RSA released the algorithm two weeks early to combat bad publicity.

Reeves said: "There have been silly forecasts about what will happen to our business. We believe it will have a very, very positive effect on the marketplace and RSA will benefit from that."

According to Tom Fawcett, security analyst at Frost & Sullivan, the patent's expiry will increase innovation and competition. He said: "This is very good for the user. The patent has held back the market to some extent - but if Baltimore had been in the same position they would have done the same thing.

"The RSA algorithm is an integral part of most encryption products and RSA made a lot of money out of it."