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Tern - a prize Geek of a reader provides illumination

By Tom Winnifrith | Sunday 6 September 2015

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

I am always amazed at how much some of our readers know about their specialist subjects. Reader CryptoBod appears to be a prize geek but his thoughts on Tern (TERN) posted on this site today merit a wider audience, He writes:  

Burbling at a technical level it is interesting to note that,

Does not offer a secure HTTPS connection. You will note that,

result in a ‘Cannot Find Server’ response. That strikes me as being a bit of a fail for a company that is supposedly espousing its expertise within the Cryptographic Arena.

dig 7200 IN A

inetnum: –
descr: DigitalOcean London
country: GB

redirects to a secure connection on,

at least their hosting provider knows a little.

If you download some of their literature,

Amongst the ‘buzz words’ and the ‘big numbers’ what they are offering are cloud based solutions hosted via Amazon EC2 and Microsoft Azure… along with Industry Standard Java Based Technologies and APIs, Application Interfaces and DataBases.

From the above graphic you can see that this is a Microsoft Azure Instance. It is extremely likely that it is built on COTS software available to anyone who might wish to set up a similar platform, much of it will or may be available as FOSS and subject to GPL licensing.

Cryptosoft will probably providing the ‘glue interface’, APIs to interface with the underlying systems…. ‘DashBoards’. In respect of crytography again from the above graphic mention is made of ECC, Elliptic Curve Cryptography, and PGP, Pretty Good Privacy. These are well known solutions to Crytography and also are or have Open Source implementation.

The conclusion would be that Cryptosoft have no ‘secret sauce’ and as such their proposed business ecosystem will be subject to rapid entry by interested third parties. It will not help that IOT, Internet of Things, and M2M, Machine to Machine, communications will be subject to implementation and adoption of standards over which Cryptosoft, whilst they might play a part, will have no overall control. They might however try to claim ‘first mover advantage’ but such a claim is likely to be fragile.

So, in respect of the above, all they have is a cloud based platform which could be implemented by any number of other interested parties which is used to communicate securely with ‘endpoint devices’.

Within their literature they make reference to the HTTP protocol in conjunction with Encryption. Again it is quite surprising that they do not implement HTTPS on their own site.

Otherwise it would appear that they are suggesting that ‘Their Agent’ on the IOT ‘endpoint device’ will be used to encrypt HTTP data, presumably to HTTPS data, prior to transmission over the network. Naturally a ‘DashBoard’ is one thing but a ‘Cryptosoft Agent’ on every IOT ‘endpoint device’ works out to be BIG licensing numbers.

Whoopy Do.. Loads of Money.

I would be inclined to call ‘smoke and mirrors’. The implication is that the target ‘endpoint device’ is already capable of running an HTTP client. By extension that means it likely to be running a Linux Kernel and Nginx on a low level ARM processor. It will also mean it is capable of running ECC/PGP.

Once again all of this stuff is based on Open Source software subject to GPL, BSD and other licences over which Cryptosoft has no control and, assuming Cryptosoft had some ‘secret sauce’, based on such software that ‘secret sauce’ would have to be returned back to ‘the community’ under similar licensing rendering it ‘non secret’. I should say I cannot state this as being fact. Just that it seems extremely likely.

Otherwise fundamentally there is absolutely no reason why the IOT community individually or as a whole should or would tie themselves into anything proprietary to Cryptosoft. The tools are already available. Cryptosoft might provide a ‘framework’ but then similar opportunities are available to anyone with access to the tools which basically means everyone.

At least they do not appear to claim ‘patents’ or ‘patent pending’.

Tern ‘does’

In respect of Seal Software Limited. It is always quite worrying when companies claim ‘approved’ patents but fail to link to them. Presumably they have something to hide from investors…

This was, presumably, a US Patent on Software and/or a Business Process. As such it is unlikely to be granted anywhere else in the world and the USPTO has a reputation for ‘rubber stamping rubbish’…

The previous link is to the WIPO application, note the word ‘application’, it has not been granted outside of the US. The associated document is available from,

You will need to get past the Captcha. From Page 1)

Having got their patent in the US naturally they try it on elsewhere. That’s going to cost them a bunch of money but fortunately it means they might maintain the illusion that they have Intellectual Property with some value. Of course if the companies concerned do not link to the ‘paper trail’ then unless you dig you will not know.

And the reason why the companies concerned will not link to the underlying application.. From Page 32)

All 34 claims are being rejected by WIPO on the basis of a combination, Y, of prior art.

Now that WIPO has done the job properly then any US company, should they be interested in what Seal Software is trying to protect, can wave that document in the face of the USPTO or a Judge and probably/possibly get the Seal Software Patent rescinded.


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