A leading provider of affordable HD home entertainment and a US Air Force contractor for the development of secure identification cards join forces to address the growing piracy problem in the entertainment industry.

For years, the entertainment, gaming and software industries have invested millions of dollars in conventional digital solutions to address the financial losses stemming from global piracy. Now, two leaders in their fields have partnered to solve this problem: New Medium Enterprises (NME), the company behind the HD-VMD (Versatile Multilayer Disc) format, the first low-cost solution in True High Definition in the world and Optikey Inc., an emerging leader in the anti-counterfeit industry that provides piracy and counterfeit protection for commercial, military and government products and systems.

NME has integrated Optikey - an "unforgeable" analog content protection technology that has been claimed to meet the anticipated shortfalls found in purely digital anti-counterfeiting methods and that has already been applied in high security U.S. government applications - into its products.

Optikey is a unique, random, analog, non-periodic sub-micron structure that is generated during a finite period of time. Once this key is generated, it cannot be replicated to the same level of fidelity as the original. Repeating the Optikey generation process itself results in another unique master. The system is validated by the US National Institute for Standards and Technology (NIST).

Here’s how it works on NME’s HD-VMD product: Optikey analog optical system integrates its three dimensional submicron analog structure on the optical disc, referred to as optical fingerprint. According to NME, the specific physical structure cannot be successfully duplicated. During the reproduction of a Optikey-protected disc, the player instantly verifies the authentication of a disc by using an optical reader through optical correlation. The precise threshold measurements of the analog Optikey structures (DVDs) are matched with either a reference structure or discrete optical signatures. The result determines the authenticity of the disc. The authentication procedure does not require a connection to a central data-base.

NME stated that copies made from stolen or compromised Optikey protected items and readers (DVDs or players) will not correlate and thus, they will be unusable. Furthermore, data stored using the optical signature cannot be tampered or overwritten.

Optikey will be integrated into both players and media with commercial pressed media and blank home use media having their own unique Optikey signatures. The protected content (movies) would contain embedded watermark instructions telling the player that this is a protected content. Media will only play in DVD players with Optikey integration based on watermarked instructions.

Optikey doesn't rely on digital encryption; however, it has been proven that when added to encryption systems as a pass/fail portal, it provides an unbreakable layer of protection for the digital domain. This means that the system can be used in conjunction with the AACS digital encryption schemes used in HD-DVD and Blu-Ray optical discs.

The Optikey/HD-VMD system will be compatible with existing legacy formats, NME said.

Initial engineering assessments and evaluations have indicated that the HD-VMD formats and the Optikey submicron structures are highly compatible and a fully integrated system architecture will meet all established design goals.

In summary, the advantages of the Optikey(R) technology are:

* Optikey is an analog sub-micron three-dimensional optical structure - it can't be forged.

* Authentication can be accomplished with or without a connection to a central data-base

* Optikey is non-obsolescent so improvements in computer processing have no effect.

According to Optikey, Inc. Chief Executive Officer, William D. Schroer, "…the integration of Optikey and HD-VMD systems is a landmark event representing an innovative and unconventional solution to global counterfeiting of protected data and content on optical discs."

Mahesh Jayanarayan, New Medium Enterprises CEO, commented, "…this is a unique technology that will benefit the entire media industry and we are happy to be associated in this venture and further reiterate our commitment to bringing an end-to-end solution to the media industry."