One of the major possible uses for chip-level encryption, according to Wagner, is for keeping music and videos from being distributed in ways that violate copyright laws. That possibility is the "elephant in the room," he says. Currently, digital rights management (DRM) is programmed into products such as CDs or DVDs, and software such as iTunes and Windows Media Player. The DRM policies of iTunes, for example, limit the number of times a CD can be copied.

Depending on the type of DRM tools used, they're "pretty easy to bypass," Wagner says. "All you have to do is tamper with the software" to remove the feature that counts the number of times a CD has been burned, he explains. But when DRM software is coupled with encrypted hardware, the software containing DRM is much more resistant to tampering.

At the hardware level, Wagner says, there's already an encryption technology called a Trusted Platform Module (TPM), which is an extra chip inside a computer that can help enforce DRM policies when used with compatible software. Such an chip could protect the DRM software of iTunes or Windows Media Player from being tampered with. While the TPM chip doesn't directly impose DRM, it makes it much more difficult to bypass the DRM on software. Microsoft's upcoming operating system, Vista, is designed to support computers that have TPM.

SecureBlue might offer stronger DRM protection than TPM, though, because IBM's encryption is integrated into the processor itself, instead of residing on a separate chip. This "enables computer manufacturers to build DRM protection that is hard to subvert," Wagner says.

"I can certainly imagine this being marketed as a DRM solution," says Bruce Schneier, founder and CTO of Counterpane Internet Security, a Mountain View, CA company. Building security onto a single chip would eliminate the "tamper attack" on the connection between a separate security chip and processor, he says.

Of course, stronger DRM for computer hardware has different implications -- depending on which side of the digital-rights debate one sits on. For Hollywood, Wagner says, the technology would be beneficial because it would prevent consumers from copying music and illegally distributing it. However, more DRM security built into a computer could also restrict how people use music and video, he says, even when it's legitimate, from copying CDs to transferring a movie from a computer to a portable video player.

IBM has not announced whether its SecureBlue customers (undisclosed at this time) intend to use the chips as a DRM tool, and the company also declined to comment on the issue of DRM.

But Berkeley's Wagner says the company's technology is reminiscent of the type of technology that "one might consider if one wanted to build DRM protection that is harder to break." If SecureBlue is able to give Hollywood "more control over people's computers," he says, the technology is "likely to be pretty controversial."