The boffins have devised a way to head off this costly infringement by giving each chip its own unique lock and key.
The patent holder would hold the keys, and the chip would securely communicate with the patent-holder to unlock itself. The chip could operate only after being unlocked.
The Ending Piracy of Integrated Circuits (Epic) technique relies on established cryptography methods, and introduces subtle changes into the chip design process without affecting performance or power consumption.
With Epic protection enabled, each integrated circuit would be manufactured with a few extra switches that behave like a combination lock.
Each would also have the ability to produce its own at least 64-bit random identification number that could not be changed.
The chips would not be manufactured with an ID number, but would have the tools needed to produce the number during activation.
Epic chips would not work correctly until they were activated. To activate a chip, the manufacturer would plug it in and let it contact the patent owner over an ordinary phone line or internet connection.
The researchers report that integrated circuit piracy has risen in recent years as US companies started outsourcing production of newer chips with ultra-fine features.
Transferring chip blueprints to overseas locations opened new doors for bootleggers who have used the chips to make counterfeit MP3 players, cellphones and computers, among other devices.
This is a very new problem, according to Igor Markov, associate professor in the Department of Electrical Engineering and Computer Science at the University of Michigan and a co-author of the paper.
"Pirated chips are sometimes being sold for pennies, but they are exactly the same as normal chips," he said.
"They were designed in the US and usually manufactured overseas where intellectual property law is more lax. Someone copies the blueprints or manufactures the chips without authorisation."
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