Japanese Cryptocurrency Exchange BTCBox Enters Hong Kong … – Bitcoin News (press release)

Veteran Japanese cryptocurrencyexchange Btcbox has announced that it will be establishing a subsidiary to target the Hong Kong bitcoin markets. The subsidiary, MBK Asia Limited, will operate in partnership with Japanese investment bank, MBK CO. Ltd.

Also Read:Rollout of 260,000+ Bitcoin-Accepting Stores in Japan Begins

Japanese bitcoin exchange Btcbox will be establishing a Hong Kong bitcoin exchange subsidiary in partnership with investment bank MBK Co. Ltd. The proposed subsidiary, MBK Asia Limited, this week announced that it has filed for registration as an incorporation within Hong Kong.

Btcbox has been operating since 2014, making itone of the oldest bitcoinexchanges in Japan. Since 2016 the company has increasingly geared its operations toward altcoin trading. Despite its longevity, Btcbox has struggled to capture a significant share of the Japanese cryptocurrency markets, posting the first profitable single month in the companys entire history this May.

Japanese investment bank MBK has already reaped benefits from its pending entry into Hong Kongs cryptocurrency markets. The recent liberalization of Japans regulatory stance toward bitcoin and dramatic rise in price seen by many cryptocurrencies have inspired sharp gains in the share price of Japanese businesses with exposure to virtual currencies with MBKs shares rising in price by approximately 17% since February.

MBK has traditionally engaged in the provision of equity investment, debt financing, fund management, and merger and acquisition advisory. The move to enter the cryptocurrency markets is a notable diversification for MBK, which was first founded in 1947 and has traditionally been associated with Japans post-war manufacturing and merchant banking sectors.

The establishment of Btcboxs subsidiary has been largely inspired by Japans permissive regulatory climate, with the company perceiving recent regulations as a likely catalyst for both recent and future growth. In April of this year, demand for virtual currencies has been increasing more than ever since the revised fund settlement law etc. came into effect in order to optimize the service on the virtual currency. Btcbox has also seen an increase in customer assets under management expected from an increase in new customers, as well as an increase in sales of bitcoin.

The Hong Kong-based subsidiary also announced future plans to negotiate partnerships to provide remittance and settlement services to the international finance markets.

Do you think that Btcbox will be successful in capturing a significant share of the Hong Kong bitcoin markets? Share your thoughts in the comments section below!

Images courtesy of Shutterstock, and BTCbox

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Japanese Cryptocurrency Exchange BTCBox Enters Hong Kong ... - Bitcoin News (press release)

Ex-Credit Suisse Trader Raises $66 Million for Bitcoin Push – Bloomberg

Former Credit Suisse Group AG trader Nikolay Storonsky is getting $66 million from investors including Index Ventures to help grow his two-year-old banking startup in the U.S. and Asia and enabling it to offer cryptocurrency trading.

His London-based Revolut Ltd. raised the money in a round that included Balderton Capital and Ribbit Capital, according to a statement on Wednesday. Storonsky, 32, will use the funds to expand in Asia and North America, and let customers hold cryptocurrency. He also plans to gather $5 million in crowdfunding from consumers on Seedrs later this month.

Source: Revolut

Revolut, which Russian-born Storonsky founded two years ago with former Deutsche Bank AG technology developerVlad Yatsenko, makes money from fees on ATM withdrawals and takes a cut from merchant charges on payments in shops. As early as next week, it plans to let customers hold, exchange, spend and transfer virtual currencies such as bitcoin, litecoin and ethereum for free, profiting from the price differences between buyers and sellers as opposed to charging commission.

Adding cryptocurrencies and the ability to buy and sell them is a big step forward for a financial organization, Storonsky, who used to trade equity derivatives, said in an interview. Big banks are looking at us and seeing what were doing, for future things they want to add to their product pipeline, but theyre very slow.

For more on digital startups challenging European lenders, click here

The cryptocurrency sector has lost about a third of its market value since peaking in early June, pushing it into what traditional equity market analysts label as a bear market. Bitcoin, the largest of the digital currencies, is down about 20 percent from its peak of $3,000, reached June 12. Smaller rivals such as ethereum are getting hit even harder.

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Storonsky is among former bankers such as ex-JPMorgan Chase & Co. executive Blythe Masters and erstwhile Barclays Plc Chief Executive Officer Antony Jenkins who are taking advantage of new technology to win customers in an industry dominated by their old employers. Although most fintech firms have yet to achieve significant scale and profit, the startups as a whole are threatening to upend banks handicapped by creaky computer systems.

Revolut, which currently employs 140 people in London, Krakow and Moscow, plans to open offices in New York and Singapore and hire about 20 more staff, according to Storonsky.

The Asia and North American growth plan will come in parallel to expanding in Europe. These are big markets, theres huge demand for our products, he said. Weve got waiting lists and now is the time to enter.

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Ex-Credit Suisse Trader Raises $66 Million for Bitcoin Push - Bloomberg

Artist to debut 3D portraits produced from Chelsea Manning’s DNA – Reuters

NEW YORK (Reuters) - Around thirty three-dimensional portraits of Chelsea Manning, created using the DNA of the transgender U.S. Army soldier imprisoned for leaking classified data, will greet visitors at eye-level at an exhibition opening in New York City next month.

Artist Heather Dewey-Hagborg based the portraits on a range of possible facial variations generated by software that analyzed DNA samples sent her by the former intelligence analyst when she was behind bars.

Manning, 29, was released in May from a U.S. military prison in Kansas where she had been serving time for passing secrets to the WikiLeaks website in the biggest breach of classified data in the history of the United States.

Other than one mugshot, photos of Manning were prohibited while she was in custody.

The exhibition by Dewey-Hagborg and Manning at the Fridman Gallery in Manhattan shows portraits of her with different color eyes or skin tone. Manning seems more masculine in some of the depictions, and in others more feminine in the show titled "A Becoming Resemblance."

"I'm hoping people will walk in and see a portrait that resonates with them and feel kind of that connection with her," Dewey-Hagborg said at the gallery, where the exhibit opens on Aug. 2. "We are all Chelsea Manning and we all stand there with her."

Dewey-Hagborg, who has previously created art pieces produced using DNA samples, worked with Manning for more than two years on the project. It began when a magazine contacted the artist to ask whether she could create an image to accompany a feature profile of Manning.

Dewey-Hagborg said she found the former soldier to be optimistic and "incredibly brave" during all of their interactions.

Manning said she trusted the artist and gave her free reign to produce the images, according to Dewey-Hagborg, asking only that the artist did not make her appear too masculine.

Prisons try very hard to make us inhuman and unreal by denying our image, and thus our existence, to the rest of the world." Manning said in a statement on the gallery's website.

Dewey-Hagborg said the exhibition was meant to show that DNA does not necessarily tell you what gender a person is. She also hoped that showing 30 different DNA-generated versions of Manning's face drew attention to the fact DNA-based imaging is not completely accurate.

"It's growing and developing but it's not ready for that kind of use yet," Dewey-Hagborg said of the imaging technology.

Reporting by Taylor Harris; Editing by Daniel Wallis and Andrew Hay

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Artist to debut 3D portraits produced from Chelsea Manning's DNA - Reuters

Chelsea Manning is taking on transphobic haters on Twitter and it’s beautiful – PinkNews

Chelsea Manning has had to endure hateful trolling since she left prison.

But, it turns out, she gives as good as she gets.

In May, she was released from prison after being pardoned by President Barack Obama.

Manning began her gender transition while still in prison, becoming the first military prisoner to receive gender transition treatment in prison, according to her ACLU lawyer.

And since gaining her freedom, she has been an outspoken activist on trans issues and inequality.

Earlier this week, she tweeted that the US should dismantle the military/police state, with its walls and borders and replace it with healthcare and infrastructure for all.

She followed this up by telling her followers that taxation is a sharing of responsibility, and that only the wealthy believe that taxation is theft.

They dont pay taxes. We should make them, she continued.

This prompted a storm of abuse in which she was told to die, called a traitor, a socialist and many slurs.

After all, if youre loud and proud with your views on social media and particularly on Twitter you will come face-to-face with hate.

And this is even more true for trans women like Manning.

But the activist has pledged: I will never block or mute, and seems to be up for destroying every troll who dares to take her on.

This includes people who dont seem to understand that not transitioning can be incredibly dangerous for trans people.

After all, she spent long enough being imprisoned.

Shes not going to be restricted now.

Manning was handed a 35-year jail sentence in 2013 for leaking 700,000 classified US army documents to WikiLeaks, but was released last month after President Barack Obama intervened to commute her sentence.

Speaking to ABC News following the release, Manning said: I used to get these horrible feelings like I just wanted to rip my body apart and I dont want to have to go through that experience again.

It was really, really awful, she added.

Manning was just 22 when she shared the US diplomatic correspondence, which included evidence of civilian deaths in Iraq and Afghanistan, profiles of detainees at Guantanamo prison camp, and low-level battlefield reports.

Speaking about her crime, she said: I have a responsibility to the public we all have a responsibility.

Anything Ive done, its me. Theres no one else. No one told me to do this.

Nobody directed me to do this. This is me. Its on me.

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Chelsea Manning is taking on transphobic haters on Twitter and it's beautiful - PinkNews

Murder, Imprisonment, Isolation, War Crimes: ‘Collateral Murder’ Ten Years On – Sputnik International

The 2007 airstrikes were a series ofair-to-ground attacks conducted inAl-Amin al-Thaniyah, New Baghdad.

In the first, the Apaches fired ona group often Iraqis, including journalist Namir Noor-Eldeen and his driver and assistant Saeed Chmagh (both employed byReuters) seven were killed, and one injured.

The second strike was directed ata van driven bySaleh Matasher Tomal. Both Chmagh and Tomal were killed, and two ofTomal's children badly wounded.

In the third, pilots fired ona building intowhich the group fled, witha volley ofHellfire missiles.

On the day ofthe attack, the US military acknowledged the two journalists were killed, alongwith nine "insurgents" the engagement was claimed tohave a combat operation againsta "hostile force" inwhich "great pains" were taken toprevent the loss ofinnocent lives. Moreover, it was claimed it was unclear whether the journalists were slain byUS fire or fromIraqi insurgents.

The event was consequently investigated bythe US military, an inquiry which concluded the soldiers had acted entirely inaccordance withthe law ofarmed conflict, and the military's own rules ofengagement.

For almost three years, despiteattempts byReuters tohave footage ofthe incident released undertheFreedom ofInformation Act, the deadly strikes remained largely unacknowledged, and entirely unexamined.

A mainstream media journalist, embedded withthe US military atthe time, mentioned the assault inhis 2009 autobiography although his account was subsequently shown tobe fabricated.

The conspiracy ofsilence onthe matter was shattered inApril 2010, when WikiLeaks released footage recorded bythe gunsightof one ofthe attacking helicopters. Dubbed "Collateral Murder" bythe leak site, the video depicted the incident infull, replete withdisturbingly callous radio chatter betweenthe aircrews and ground units involved.

The exposure provoked international condemnation and widespread media coverage. Many outlets hailed WikiLeaks, and the video's (then unknown) leaker, asheroes, and the Iraq war bythen inits seventh year became increasingly impossible forpoliticians, journalists and civilians toseriously defend.

While the footage shocked and appalled the world over, Josh Stieber, a member ofthe US military company that carried outthe attack, starkly underlined just how mundane the incident was inthe context ofthe conflict.

"When I started tosee the discussion flowing from [the video], I was surprised athow extreme it was made outto be. What was shown inthe video was not outof the ordinary inIraq. One policy we had that was even more extreme was if a roadside bomb went off, we were supposed toshoot anyone standing inthat area. We were told that we needed tomake the local population more afraid ofus," he said.

However, the revelation did not precipitate a termination ofhostilities inIraq, or prosecutions ofany ofthe personnel involved. Instead, inMay 2010, 22-year-old American Army intelligence analyst Chelsea (then Bradley) Manning was arrested afterit was revealed she was the source ofthe leaked video, alongwith roughly 260,000 diplomatic cables, toWikiLeaks.

Army Pfc. Bradley Manning (now Chelsea Manning) is escorted to a security vehicle outside a courthouse in Fort Meade, Md., after a hearing in his court martial.

Manning proceeded tospend overthree years insolitary confinement, a period which David House, founder ofthe Private Manning Support Network, dubbed "no-touch torture" Manning was subjected toextended periods ofisolation, harassment and sleep-deprivation.

The experience caused Manning to "physically, mentally, and emotionally" degrade overtime, House said. In August 2013, she was sentenced to35 years' imprisonment. Mercifully, inMay 2017, Manning was released, followinga commutation ofher sentence byformer President Barack Obama.

It was subsequently acknowledged Manning's disclosures did not infact damage US interests.

Moreover, WikiLeaks, and site founder Julian Assange, quickly found themselves the subject ofUS prosecutorial ire too.

REUTERS/ Axel Schmidt

Julian Assange, Founder and Editor-in-Chief of WikiLeaks speaks via video link during a press conference on the occasion of the ten year anniversary celebration of WikiLeaks in Berlin, Germany, October 4, 2016.

In November 2010, US Attorney-General Eric Holder announced there was "an active, ongoing criminal investigation" intoWikiLeaks that same month, Sweden launched a sexual assault investigation intoAssange, and issued a Europe-wide warrant forhis arrest.

Residing inthe UK, Assange feared extradition tothe US, should Swedish or British authorities take him into custody. He applied forpolitical asylum inEcuador, and was granted sanctuary inthe country's London embassy June 19, 2012. For five years, he remained undereffective house arrest, forbidden fromleaving a 2,153 square foot room inthe embassy's bowels, untilprosecutors dumped the baseless case.

REUTERS/ Peter Nicholls

WikiLeaks founder Julian Assange is seen on the balcony of the Ecuadorian Embassy in London, Britain, May 19, 2017

However,Assange's problemsremain far fromover.

London's Metropolitan Police which stood watch outsidethe Embassy's door 24 hours a day, seven days a week fromthe momenthe entered it, atan estimated cost toUK taxpayers ofUS$16.8 million (13 million) between2012 and 2015 alone remain "obliged" toexecute an arrest warrant issued in2012 byWestminster Magistrate's Court.

The charges relate toAssange's failure tosurrender toauthorities. He still faces arrest if he leaves the embassy. Discussions betweenAssange's legal team and UK authorities onthe potential cessation ofbail violation charges remain ongoing.

All along, hostilities inIraq have continued, withfluctuating levels ofintensity.

Sputnik/ Iliya Pitalev

"The scale and gravity ofthe loss ofcivilian lives duringthe military operation toretake Mosul must be publicly acknowledged. The horrors people have witnessed and the disregard forhuman life byall parties tothis conflict must not go unpunished. Entire families have been wiped out, many ofwhom are still buried underthe rubble today. The people ofMosul deserve toknow, fromtheir government, that there will be justice and reparation so that the harrowing impact ofthis operation is duly addressed," said Lynn Maalouf, Amnesty International's Middle East Research Director.

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Murder, Imprisonment, Isolation, War Crimes: 'Collateral Murder' Ten Years On - Sputnik International

Industry firm patents new cyber encryption technology – Defense Systems

Cyber Defense

A private sector firm is offering a new kind of reinforced encryption technology for the U.S. military services to safeguard mobile phone, radio and computer transactions from brute force cyberattacks.

The Internet Promise Group has used internal funding to patent a new technical method of securing encrypted military communications by implementing, integrating and changing random bits with an existing encryption key algorithm.

The idea is to strengthen existing encryption keys to make them less vulnerable to brute force attacks where adversaries or cyber intruders use computer algorithms to try multiple combinations of keys until the details are discovered and the key is broken, said Tara Chand, founder and CEO of Internet Promise Group.

Brute force attacks, which require both substantial coordination and sophistication, are typically thought to be associated with major cyberattacks from near-peer adversaries, such as Russia or China.

We want to figure out a way to make the key so strong that you cannot break it, he said.

Chand explained that his firm has patented Random Dance Keys, a new class of military encryption technology engineered to be impenetrable to brute force cyberattacks.

Random Dance Key innovation is based upon its focus on the key space itself rather than encryption algorithms, to provide ultimate defense and protection of critical data and communications. This patented, advanced key management system employs heuristic random wave envelopes derived from the three different types of waves to yield a perpetual sequence of random vectors, Chand added.

Random Dance Keys, Chand explained, are able to change encryption keys with every data package by using a new random sequence of bits. Random keys are used and then discarded.

Every time you have a data package, you come up with a random key and integrate that with an algorithm and encryption key you already have. You leave them as they are, he added.

The Internet Promise Group is now in the process of introducing this technology to the U.S. military services. Early conversations are underway, Chand explained.

Current U.S. military concerns about cyber intrusions are heightened by recent revelations of Russian hacking and Chinas previous record of hacking U.S. military databases.

About the Author

Kris Osborn is editor-in-chief of Defense Systems. He can be reached at kosborn@1105media.com.

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Industry firm patents new cyber encryption technology - Defense Systems

We need to protect encryption – ITProPortal

As we have come to terms with recent tragic events in the UK understandably there is great anxiety and a lot of questions about the causes of such terrible loss of life. It has again highlighted the debate around regulating the internet giants like Google, Facebook, Twitter and Amazon. These channels have given criminals and terrorists the opportunity to broadcast their message, so politicians in the UK responded in the first instance by suggesting the technology industry should play their part in addressing this huge challenge. However, the Queens Speech, the list of laws that the government hopes to get approved by Parliament over the coming year, leaves me confused.

Listening to the earlier comments from policy makers the rhetoric suggested the new Government would push the technology industry for tougher legislation that might not have proper checks and balances in place. These concerns were heightened reading Matt Burgess report claiming the Government wanted to push through demands for tech companies to provide access to user information by breaking end-to-end encryption as needed.

The Home Secretarys comments, especially in relation to encryption compounded that concern, so it was very pleasing to see positive signals from the European Union on the individuals right to privacy. The European Parliaments Committee on Civil Liberties, Justice and Home Affairs underlined its support for the principle of confidentiality.

However, a week really is a long-time in politics, especially when it comes to digital and technology legislation.

The Queens Speech has highlighted a commitment to make the UK the safest place online and added new right to be forgotten laws, as well as a determination to comply with the European Unions GDPR legislation. The speech also included a pledge to review counter terrorism strategy. This might suggest the Government is revising its view on cybersecurity, placing the individuals right to privacy above national security issues. Unfortunately the vagueness of the Queens address leaves far too much room for interpretation. The talk of a Digital Charter is good if its goal is to protect the privacy of consumers, but how will that be weighed up against national security needs?

From the perspective of MaidSafe we applaud attempts to protect user privacy. However, there is no clarity on the question of encryption, particularly giving intelligence services exceptional access in the name of national security. The Investigatory Powers Bill still stands and there appears to have been no mention of the unassumingly named Investigatory Powers (Technical Capability) Regulations, which will require service and application providers to give access to information. While this remains unaddressed we have one simple question for the authorities: what if the technology has been designed so that it cannot reveal user information?

As most people who follow the story of MaidSafe know the start point for the SAFE Network was creating a better internet one where users were in control of their data and privacy was paramount. That is why it has been designed with encryption at its core and why users are the only ones, who control access to their data. However, to ensure MaidSafe cannot compromise a users identity and data MaidSafe has no way to break the encryption. The user is the only one with the keys and we have no master key that can override the system. Bottom line we cannot put a backdoor into our network, because we have no way of identifying users once they are set up.

If you listen to the arguments from politicians the potential threat outweighs the right to privacy and freedom of speech. We believe that rushing legislation through is the wrong approach. This should be a time for cool reflection and a recognition that it is a complex problem, which cannot be solved by pressurising technology companies to create backdoors to their products. Even if you do not accept the fundamental right of individuals to privacy and freedom of speech there is a simple practical point - weakening encryption will make itwell insecure. A vast array of organisations use encryption today for everything from banking to processing legal documents, tax accounts and protecting email. Creating mechanisms for the security services to access information means there is a weak point which hackers can exploit too. If you dont believe they will then you have clearly erased Wannacry from your memory. The excellent article by Andy Greenberg in Wired on the extent of the hacking in the Ukraine shows how devastating cyberattacks already are without giving the hackers a short cut and this weeks episode has only served as a stark reminder.

The more difficult moral debate we are fully aware of is that we are building a network, which could be used for both good or bad purposes. It is our view that users should be given the right to make this choice for themselves. If they control their data and who they share it with, they control whether or not an individual can broadcast information to them. Security services may also say the SAFE Network will make it harder for them to do their jobs, but there is little or no evidence that mass surveillance and breaking encryption will mean it is easier to catch criminals. Indeed while the bad guys appear to take an innovative approach to new technologies it often seems as though the authorities wish to take a step backwards.

Compromising security and allowing sweeping powers more often than not leads to abuses of such authority. We have seen this time and again. We would argue there is evidence the police and security services are more successful with targeted surveillance and building partnerships with communities. John Thornhill at the Financial Times recently reminded me of a report I had seen before, originally published in 2015. MITs Computer Science and Artificial Intelligence Laboratory (CSAIL) produced a damning criticism of backdoor access to encryption the title of the report underlining the crudeness of such an approach: Keys Under Doormats: Mandating insecurity by requiring government access to all data and communications. While it sounds obvious there is absolutely no point in locking the door and allowing the bad guy to find the keys. It makes for good drama in Hollywood, but it in real life it has serious consequences.

The intelligence community terms this breaking of encryption as exceptional access which makes it sound very benign. However, MIT CSAIL was clear about the consequences in its report: In the wake of the growing economic and social cost of the fundamental insecurity of todays Internet environment, any proposals that alter the security dynamics online should be approached with caution. Exceptional access would force Internet system developers to reverse forward secrecy design practices that seek to minimise the impact on user privacy when systems are breached.

If you are not convinced on moral grounds there is also a simple technical reason why giving control back to users works. If an individual controls his or her identity that person is anonymous, but also potentially traceable. As John Thornhill rightly points out using encryption also authenticates the user and in environments such as the blockchain it should not be forgotten that once an individual, including a hacker, adds something to the blockchain it is recorded for posterity. Suggesting that encryption is an enabler for the bad guys shows a lack of understanding of next generation technologies, because unlike previous analogies of good guys versus bad guys technologies in the current landscape are more complex.

At its heart this debate needs a reset, because it feels like cybersecurity strategy is still in the 2000s when Web 2.0 came along. The technology is cleverer now, but so too are the users and the technology is reflecting what users want. They want privacy, but equally they do not want to propagate terrorism or hatred. They believe technology exists that balances the absolute right of individuals for privacy and the need for national security.

Sadly we do not live in a perfect world and technology is unfortunately being used by bad actors to do some nefarious things. Certainly, the approach of the big tech companies in response to growing consumer and political concerns has not been as quick and responsive as many would like, but weakening encryption in the name of national security is not the answer. Paul Bernal, in Matt Burgess article, raised the important issue of accountability and oversight. If the Technical Capability Regulations are passed into law there is also an even more fundamental question of right to privacy and right to freedom of speech. This is a time for cool heads. The MIT CSAIL report is good not just in its technical analysis but also as a historical reminder. We have been debating this issue since the 1970s when computers became increasingly mainstream. Today we are seeing rights undermined increasingly around the world and if a country like the UK is seen to promoting more draconian laws it will give more authoritarian states the justification they need to implement similar and worse rules. If we force technology companies to break their encryption we do not just compromise security we compromise fundamental human rights.

Nick Lambert, Chief Operating Officer, MaidSafe Image Credit: Yuri Samoilov / Flickr

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Multi-level Encryption Patent Survives 101 Challenge in District Court – Lexology (registration)

Introduction

On May 23, 2017, the District Court for the Eastern District of Virginia (District Court) denied a motion for summary judgment that the patent claims asserted in a lawsuit brought by TecSec, Inc. (TecSec) are invalid under 35 U.S.C. 101.[1]

In the lawsuit, TecSec accused Adobe Systems, Inc. (Adobe) of infringing four related patents[2] directed to a multi-level encryption system that allows encrypted objects [to] be nested within other [encrypted] objects . . . resulting in multiple layers of encryption.[3] Representative Claim 1 from the 702 Patent is reproduced below:

Click here to view the image.

1. A method for providing multi-level multimedia security in a data network, comprising the steps of:

A) accessing an object-oriented key manager;

B) selecting an object to encrypt;

C) selecting a label for the object;

D) selecting an encryption algorithm;

E) encrypting the object according to the encryption algorithm;

F) labelling the encrypted object;

G) reading the object label;

H) determining access authorization based on the object label; and

I) decrypting the object if access authorization is granted.

Patent Eligibility Inquiry

The eligibility inquiry under 35 U.S.C. 101 proceeds in two steps.[4] First, the court determines whether the patent claim at issue is directed to one of the patent-ineligible concepts (e.g., abstract idea, law of nature, or natural phenomenon) (step one).[5] If the claim is not directed to a patent-ineligible concept, the inquiry ends.[6] Otherwise, the court determines whether the claim includes any additional elements that transform the nature of the claim into a patent-eligible application (step two).[7] If a claim is found to be directed to a patent-ineligible concept in step one and also lack any additional elements that transform the nature of the claim into a patent-eligible application in step two, the claim is ineligible for patent protection under 101.[8]

Arguments before the District Court

Adobe argued that the claims in the asserted patents are directed to the abstract idea of managing access to objects using multiple levels of encryption.[9] According to Adobe, Claim 1 of the 702 patent provides no guidance at all as to how to encrypt an object, how to nest objects, or any specific type of object that the process may operate on and is thus abstract because it provides no restriction on how the result is accomplished.[10]

TecSec contended that Adobe failed to properly perform the step one analysis by overgeneralizing the claims, failing to tie the identification of the abstract idea to the claim language at issue, and oversimplifying the claims and downplaying the inventions benefits.[11] Further, TecSec argued that there is no risk of preemption because there are other ways to manage access to objects using multiple levels of encryption that do not require an [object-oriented key manager] component along with the recited encryption and labelling steps.[12]

District Courts Discussion

Siding with TecSec, the District Court found that the claims in the asserted patents are not directed to an abstract idea, law of nature, or natural phenomenon.[13] According to the District Court, the patent claims provide a solution to a computer-centric problem that would not exist but for the ubiquity of computer technology.[14] Rejecting Adobes contention that the claims are reducible to putting a sealed envelope (single-level encryption) into a second sealed envelope (multi-level encryption) for extra security, the District Court stated that the claims provide a specific solution that allows multiple users in multiple locations [to access] information at different security levels from a central repository.[15]

Further, the District Court noted that the asserted patents preempt systems which make use of the specific method of an object-oriented key manager without foreclos[ing] all forms of multi-level security.[16] Having determined that the patent claims are not directed to an abstract idea, the District Court ended the patent-eligibility analysis and denied Adobes motion for summary judgment.[17]

Takeaways

This case illustrates that (i) a solution that is necessarily rooted in computer technology as illustrated in DDR[18] and (ii) evidence of no preemption as illustrated in McRO[19] both continue to play an important role in helping patent owners survive 101 challenges. When drafting claims, patent applicants should carefully consider how the claims solve a computer-specific problem without preempting all possible ways of solving such a problem.

On the other hand, patent challengers should emphasize how the problem solved by the claims is a conventional one, and not one that exists only because of the Internet or the computer technology. Additionally, patent challengers should point out why the claims impermissibly preempt an entire field of ideas. Here, Adobe presumably had some difficulty arguing that TecSecs claims cover all types of multi-level encryption because Adobe also had to argue that its multi-level encryption system did not infringe the asserted claims. In such cases, patent challengers may want to, if possible, formulate the abstract idea in a way that does not include their own products.

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Multi-level Encryption Patent Survives 101 Challenge in District Court - Lexology (registration)

Quantum satellites demonstrate teleportation and encryption – physicsworld.com

Physicists in China have achieved the first quantum teleportation from Earth to a satellite, while their counterparts in Japan are the first to use a microsatellite for quantum communications. Both achievements suggest that practical satellite-based quantum communications could soon be a reality.

Jian-Wei Pan of the University of Science and Technology of China in Hefei and colleagues used China's $100m Quantum Experiments at Space Scale (QUESS) satellite to receive a quantum-teleported state. This was done over a distance of 1400km from a high-altitude (5100m) ground station in Tibet to QUESS. This is more than 10 times further than the 100km or so possible by sending photons through optical fibres or through free space between ground-based stations.

Described in a preprint on arXiv, the process involves creating photons that are quantum-mechanically entangled and then transmitting them to QUESS. Last month, Pan and colleagues reported the distribution of quantum entanglement over 1200km using QUESS.

Meanwhile, Masahide Sasaki and colleagues at the National Institute of Information and Communications Technology in Japan have shown that quantum information can be transmitted to Earth from a 5.9kg photon source called SOTA which is on board a 48kg Japanese microsatellite called SOCRATES.

Writing in Nature Photonics, Sasaki's team reports that they were able to receive and process the information at a ground station in Japan using a quantum key distribution (QKD) protocol. QKD is uses principles of quantum mechanics to ensure that two parties can share an encryption key secure in the knowledge that it has not been intercepted by a third party.

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Quantum satellites demonstrate teleportation and encryption - physicsworld.com

The New Open Source Business Model: Trading Code for Personal Data – The VAR Guy

How do companies make money with open source software? Increasingly, the answer is that they use open source programs to collect personal information from users. Here's how this new open source business strategy is changing the channel.

For most of the thirty-three year history of free and open source software, companies that developed open code relied on a set of conventional business models. They revolved around strategies like "freemium" pricing, redistributing of open source software through channel partnerships, creating foundations and selling support services.

These are the strategies that sustained old-guard open source companies like Red Hat and Canonical. They allowed them to generate revenue from software that they gave away for free.

There's a new generation of companies that are investing in open source, and they're migrating toward a new business model. They support open source development and give away software, then use that software to collect data valuable from users.

Take Google, for example. Google is a lead contributor to several important open source projects, from the Chromium Web browser to Kubernetes, a container orchestrator.

While not all of these open source programs directly feed Google's data-collection initiatives, some of them (like Chromium, the basis for Google's Chrome browser) do. And in general, there is little arguing that data collection is at the heart of Google's business strategy. Much of the money that Google infuses into the open source ecosystem to support development is paid for with users' private data.

Google's not alone. Baidu, Google's Chinese twin, is now doing something very similar. The search and cloud hosting company is releasing an open source driverless car platform with the goal of advancing data collection.

Even Canonical -- which for most of its history has stuck with traditional open source revenue-generation strategies like selling support services -- has experimented with a program that collects users' data inside Ubuntu Linux. The company abandoned that strategy last year, but it's evidence all the same of the idea that personal data can make freely redistributed software profitable.

It's a safe bet that selling support services and other conventional business models will remain central to the open source world going forward. It's perhaps only very large companies that stand to benefit from trading open code for users' data.

But the latter trend is here to stay, too -- which means open source will now have a new cost for many of its users.

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The New Open Source Business Model: Trading Code for Personal Data - The VAR Guy