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FAQ -Business issues


  1. Why is it so difficult to sell cryptographic products?
  2. What is the patenting strategy of TPVS?
  3. Who are the competitors of TPVS?
  4. Can TPVS products be personalized?
  5. What are the product development methods of TPVS?
  6. What are the crypto regulations in Hungary? Why Hungary?

Why is it so difficult to sell cryptographic products?

This difficulty of selling cryptography related products has several complex reasons and it is not completely understood. One of the main reason is psychological. It is difficult to visualize computer security,  it is very abstract, it is difficult - if not impossible - to verify and it takes a long time. It is certainly not fashionable. The other is information assymmetry on the market. Sometimes, even the seller - even with best intentions - does not know what he is selling, not mentioning the buyer. From this respect, it is even worst market than used cars. The work of Nobel prize winning Akarelov on information assymmetric markets is very discouraging. One other problem is inconvenience and lack of flexibility. One always has to pay a price in performance, costs, convenience and flexibility for security.

While we cannot change the first two - it comes from human nature and the structure of the market, we can certainly do something to handle the latter, which is the core strength of our the universal program encryption (UPE) technology, a sustainable unfair advantage on our side, if you like.

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What is the patenting strategy of TPVS?

UPE is for the computer and data security as IC (Integrated Circuit) is for electronics. If patented, it will be a so called basic patent with about (so far) 300 related non-trivial applications which are planned to be patented.

Software and algorithm patents exists only in the US and Japan, but not in the EU. We plan to patent UPE and related inventions in both US and Japan. For hardware solutions we search (prefer) global patents. On the other hand there is a loophole in EU patent laws. One can patent a software if it controls some special machines. Case law shows that FPGA (a special type of hardware) implementations pass this criteria. After encryption by UPE it is almost almost trivial to implement in FPGA, so we can patent it in the EU too.

We intend to patent even those applications which we want to give away for free - to prevent others to patent it. We think, that software patents are very important for the development of the software industry of EU, but trivial solutions should not be allowed to be patented.

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Who are the competitors of TPVS?

To say it bluntly, there are no competitors, because so far nobody has developed or possessed anything comparable to the universal program encryption (UPE) technology invented and exclusively owned by TPVS. A similar attempt is for example But all of these code obfuscation technologies – as it is readily acknowledged by their developers – can be broken by serious players, like a determined group of experts / hackers, big corporations, the mob, or national security services. So they provide only a limited security, which is of course may be useful in some cases, but makes them useless – even dangerous, by providing a false sense of security – if  the stakes are high.

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Can TPVS products be personalized?

Yes. Flexibility is one of the most appealing features in UPE. Every business has some special feature which makes it unique. We can tailor our products to specific needs. We have a consulting service. Just submit your security needs, and what you want to accomplish and we will say it in 3 days whether we can deliver it and for what price. We can also give suggestions how to improve your protocols to better fit your needs. If the implementation of your protocol is not simple, you may be asked to pay the development costs in advance. For open source and freeware developers we have a free consulting service.

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What are the product development methods of TPVS?

There are two methods to develop security solutions. The first is in the totally secure, trusted environment, maximally reliable and loyal stuff and secret methods. This is typical of the recent military or intelligence applications. The second is making the source code open. (The idea here is that more eyes can see more.) A good example for this is some versions of the most popular cryptography software, PGP (Pretty Good Privacy), written by Phil Zimmerman.

TPVS mixes the two approaches. Our core technology, the kernel of UPE algorithm is built in a secure, trusted environment. But our core expertise is in cryptography and mathematics. To concentrate on this aspect, we outsource programming as much as possible, without compromising the security of our products. Our policy is that the outsourced development is made open, after the product is finished. So more people can check its security. So those, who started to trust TPVS do not have to worry about our partners. (This policy does not apply for joint projects.) 

We also try to be as open about our technology, plans and intentions as possible. We are very much against the fortress mentality. In business environment it just does not work. Furthermore our firm belief is that openness is the best way to build trust and credibility.

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What are the crypto regulations in Hungary? Why Hungary?

The Wassenaar export control (pre-December 1998) regime is signed. There are import controls mirroring the export controls, requiring an import license if an export license were needed in Hungary. Import and export of mass-market encryption software is exempted.

There are no domestic laws and regulations on using or developing cryptography products and technologies - so far.

There is a law that provides an agency (Országos Rejtjel Felügyelet) with the competence to assess cryptography; the agency can declare that it satisfies a minimum security level. (Based on Bert-Jaap Koops,  Crypto Law Survey and Magyar Törvénytár (in Hungarian).) This law provides a very good environment for the development and test of cryptographic products.

We hope, these laws will not change, probably, despite some pressure from some NATO countries, because Hungary is exposed to several threats mainly from the Balkan and the former Soviet Union. To assess these threats it seems that her fundamental interest is to develop and deploy strong crypto products, not weak ones.

For the most detailed international overview of crypto related law see the Ph.D. thesis The Crypto Controversy, A Key Conflict in the Information Society, by Bert-Jaap Koops. See also his Crypto Law Survey which is the most comprehensive publicly available of this kind.

Her business environment (a booming economy), her well educated and still relatively cheap workforce, her not saturated job market for high quality IT professionals, her deeply rooted, rich mathematical culture with easy access to top talent and expertise, her fast improving legal environment and infrastructure and laws and fundamental interests strongly favoring the development, test and deployment of strong cryptographic products makes Hungary an almost ideal place for crypto software development, except software patent laws. Hardware is an other story. It seems that the most ideal place for (UPE related) hardware development and technology patenting is Japan.

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