Panelists were generally optimistic about the ability of IP creators to protect their property. But disagreement arose when a Synplicity representative spoke from the audience about his company's ability to synthesize encrypted IP, and panel and audience members insisted users don't want encrypted IP.

Panel moderator John Barber, analyst at Gartner Dataquest, noted that the silicon IP market is currently around $1.8 billion this year. He said the market enjoyed 16 percent growth in 2005 and expects 22 percent growth in 2006. But IP protection, he said, is "the key issue why the IP industry is not exploding as it should."

Gary Delp, CTO of the VSI Alliance and distinguished engineer at LSI Logic, said the key challenge is to protect the value of the IP. "If you perfectly protect it, nothing bad will happen, but nothing good can happen," he noted.

Delp discussed some of the work underway at the VSIA, including standards for tagging, which can show where IP originated and what tools touched it. VSIA currently has specifications for soft and hard IP tagging. Other emerging technologies include watermarking, which can track ownership, and fingerprinting, which can track who IP is given to.

"None of these things work without trust," Delp said. "It's a matter of how we build trust into the system."

Delp said that the VSIA is working with universities to find ways to protect IP. "A challenge like that can provide a focus for the academic community, and something useful for the industry," he said.

Mark Gogolewski, CTO at Denali Software, noted that his company sells verification IP in compiled object form, which is integrated with various simulators. Thus, he said, it's protected through licensing in the same way that simulation is protected. Gogolewski noted that "unintentional reuse" is as much of a problem as malicious reuse. "If someone accidentally runs simulations on an evaluation license, there's a loss of income," he said.

Proven, high-quality IP presents a lower risk of theft, said Shafy Eltoukhy, vice president of manufacturing operations at Open-Silicon. That's because high-quality IP doesn't need to be touched as often. But the big problem, he said, is the handling of IP. With laptops and removable storage devices that can be easily stolen, he said, "it's very easy by accident to give IP out of the company."

Joachim Kunkel, vice president at Synopsys, said that IP "traceability" will make it possible to cross-correlate what ends up in silicon with the IP that was originally created. Watermarking can help ensure that the IP belongs to the company that's using it, but doesn't necessarily prevent misuse, he said.

When the Synplicity representative spoke about his company's synthesis capability for encrypted IP, Kunkel had a sharp retort. "Over 20,000 gates no customer will take encrypted code," he said. "They want RTL source code so they can run all the tools." This includes not only Synopsys Design Compiler, he said, but associated tools such as syntax checkers.

"I run seven tools against other people's IP before I'll allow it in my facility," said an audience member. "That source code is critical. I will not allow a wrapper around it."

A question emerged about IP protection in China. Larry Rosenberg, head of the VSIA working groups, rose from the audience to comment that China is at an "inflection point." He said that Chinese officials are "building more fabs, recognizing no one trusts them, and acknowledging that it's a problem. There are a lot of efforts to change that."