one aspect of the invention provides a scheme that circumvents the problem of heterogeneous laws regarding the use and porting of encryption in different parts of the world . this provides a tool for developing products featuring very strong encryption technologies , where such encryption technologies can be made available on a global basis . the invention provides control mechanisms over the use of encryption , by separating encryption algorithms from the rules governing the use of those encryption algorithms . the access right rules are contained within an electronic policy activation token , created and distributed by representatives of local authorities ( e . g . licensor , governments ) ( referred to herein as security domain authorities ). this allows for a unique set of encryption algorithms , to be embedded in hardware components ( e . g . firmware , chipsets ), and activated by a policy activation token , according to the local government regulations . all cryptographic methods that control access to software lie dormant and unusable as a result of being intentionally disabled , i . e . broken . only upon the receipt of activation criteria and reenabling data is it possible to resolve such intentional disablement and activate the software . this information is delivered in the policy activation token ( pat ). the pat is a delivery vehicle for access rights such that the set of access right data structures make up the majority of the pat data structure . the type of pat and the delivery mechanism determines additional elements of the pat . pats are signed to prevent alteration and the pat signature is authenticated . there are different types of pats , including physical and virtual pats . given the proper interfaces , all types of pat can be supported . a physical pat is a smart card that contains a set of access rights that are to be considered only while the smart card is physically inserted into its reader . consequently , the access rights are not transferred out of the physical pat . by maintaining a constant authentication heartbeat , the system knows that the physical pat is present . any access right parameters that are needed can be requested and returned using the heartbeat protocol . the smart card that is serving as the physical pat may be a multifunction smart card , and thereby contain other useful security features . the physical pat may be designed to be more or less permanently installed or temporarily installed while the user activates a specific service . either way , the access rights in the physical pat are considered available only while the physical pat is inserted . a virtual pat is a token used to securely deliver a set of access rights over a communications link . a virtual pat is a data structure that contains a set of access rights . the virtual pat delivery mechanism must not permit replay or diversion . an underlying principle of the invention lies in the separation of information and the data granting access to that information , as well as the use of a trusted execution environment . this simple , yet extremely powerful principle can easily be transposed to the problem of software distribution . for a discussion of an underlying framework for such a software distribution system , see k . klemba , r . merckling , international cryptography framework , u . s . pat . no . 5 , 651 , 068 ( jul . 22 , 1997 ) and k . klemba , r . merckling , international cryptography framework , u . s . patent application ser . no . 08 / 821 , 325 , filed mar . 21 , 1997 , the content of which is incorporated herein by this reference thereto . fig1 is a block schematic diagram of a token based software distribution scheme according to the invention . when a customer 20 , e . g . a user , an mis department , or a reseller representative , requests the download of software components 21 to a platform 25 , a token server 26 delivers a token 23 , typically as part of a financial transaction 22 via a procurement center 24 . the token server 26 is operated by the organization that has a legal agreement with the isv for the distribution of those particular software components . the token is then passed on to a system 30 that builds software images 31 . this system 30 is operated by the organization that performs the delivery of the software . upon reviewing the information contained in the token 23 , this system 30 assembles the appropriate software components from the encrypted component base 29 , decrypts them within an enabled secure process , and creates a software image 31 to be loaded onto the platform 25 . at this point , the software image 31 is protected using application specific encryption provided by the invention to bind the software image 31 to the hardware platform . the software image 31 is then downloaded to the platform 25 , or provided directly to the customer 20 . the isv 28 receives a report 27 from the organization that issued the token and any royalties associated with the licensing of the software components . when the application is used for the first time , upon agreement of the eula , the protection mechanism is cleared within a tamper resistant , trusted component of the system on which the application is to run and an unerasable credential is created which records that the software components have been successfully installed . a personal computer manufactured with this process is a standard personal computer , but it is loaded with software using a specific secure pre - load procedure , e . g . bios and bis technology . the multiple capabilities of use of the token allow implementation of a dynamic process that checks that the software is both genuine and bears a valid certificate at each application start up . this last dynamic process requires modifications of the operating system to establish a trust relationship between the secure process monitoring the use of an application and the trusted component . such modifications allow the operating system to monitor the credential for service activity . the invention provides flexibility to accommodate all distribution models , e . g . direct , indirect , retail , internet , or shareware . software is readily duplicated and distributed without consideration of license agreements because the token , i . e . a small electronic file , is the physical evidence of the license agreement . the token may therefore follow a separate path from that of the software itself . the software becomes usable only when the token is present . this aspect of the invention provides a powerful mechanism for establishing unencumbered software distribution while reliably securing the software against improper or unauthorized use , sale , or duplication . thus , use of the invention clears gray area practices by offering an accountable system for license tracking . as an example , resellers may order tokens from isvs ( or their channel ) and make lawful customer image duplication without being encumbered by a specific license agreement . implementation of the invention does not necessitate a profound change of the economic and the money flow model of software distribution , yet provides the flexibility to move towards new distribution models progressively . this is because use of the invention clearly separates the value added by software license procurement from the value added by image loading and system supply . the invention provides a common on - line software distribution mechanism that can be deployed at factory sites , at resellers sites ( first and second tier ), within corporations , and even at individual end - user locations . this is made possible by the high level of trust induced by the use of the invention &# 39 ; s security mechanisms , e . g . tamper resistant , hardware - based security . more specifically , for the different levels of the software delivery chain the invention offers at least the following advantages : provides a trustworthy and efficient software distribution system that combines the advantages of online distribution and factory loading ; generates more revenue by enforcing the “ one license , one computer ” rule ; and opens new areas of software supply mechanisms , through the use of specialized tokens allowing , for example , leasing , pay per use , time bound promotions , and volume licenses . provide significant cost savings on manufacturing processes for fast and secure loading of operating systems and applications . a system implementing the invention does not require a third party contract for support because the processes can be more easily opened to resellers ( because the system is not based on proprietary processes ). provide significant cost savings on licensing for those licenses that are not required by our customers , i . e . where a system is loaded with win9x when the customer wants windows for workgroups . lower the cost of the computer platform , provided that a computer vendor can ship personal computers without operating systems . this increases efficiency in loading software , and in providing a lawful process for loading a complete customer image , including a full operating system in a one step manufacturing process . help to reduce tco by strictly enforcing the one license , one computer rule , and by making personal computers system management ready , thereby further reducing the cost of installing applications on new personal computers . provide in - house availability of a large software repository that can be constantly updated . provide better turn - around time because of the improved efficiency of the software suppliers . the user pays only once for the operating system . provide security features at a marginal incremental cost . provide the ability to use corporate tools while still complying with eulas . the personal computer can be more trusted because of the security features ( safe box , encryption ) included therein . provide simple installation , i . e . open the box , plug the computer to the corporate network and start using it in a few minutes . fig2 is a flow diagram showing a development timeline for implementing a token based software distribution scheme according to the invention . the deployment of such a technology typically follows a progressive path , from regular distribution centers and channel assembly partners to small and medium size businesses . first step ( 100 ): the first step provides added flexibility to existing proprietary manufacturing processes , which are designed to handle static bundles and cannot process dynamic combinations of software . this allows for software build to order ( sbto ) by dynamically transforming a set of software component requirements into a list of to - be - loaded software . a second feature manages customer images as a temporary solution for counting and reporting licenses of software included within the image in a secure environment ( distribution centers and current channel assembly partners ). second step ( 110 ): the second step first provides an accountable image building / loading system using the herein described security mechanisms . when a customer order is processed , a token is requested from a token server . the token is consumed by the image builder / leader and used to duplicate the exact number of copies of software corresponding to that order . a secure hardware element ensures that the image loading / building process cannot be tampered with and that only the correct number of software licenses granted by the token are issued . current protection mechanisms already in place in the distribution centers and at channel assembly partners are used to guarantee end to end security . this protection mechanism resides in a confidential software building procedure and in a flag implemented in a serial eeprom that makes the manufactured personal computer inoperable until all the manufacturing processes have been executed . a second objective of this second step is to make personal computer clients system management software ready to use such that new personal computers only need to be plugged into the corporate network , and automatically download additional software from a system management server . this can be readily achieved by pre - loading system management software clients at the factory . usually , system management software is not pre - installed on new personal computer clients , and the it organization must load it , which may induce several days of delay and drastically increase the cost of deploying a new per computer within the organization . a third objective of the second step is to lead the definition of an industry - wide standard for software setup and install procedures . even though tools such as installshield from install shield software corporation , schaumburg , ill . are used in the industry , setup procedures may vary significantly from one isv or independent hardware vendor ( ihv ) to the other . this increases cost , introduces quality problems , and delays the time to market for oem vendors . at completion of the second step , the token system guarantees an exact count of software licenses preloaded on the personal computer at manufacturing , and therefore clears the gray area practices of non - legally covered software loading , as described above . protection against software piracy is provided by the nondisclosure of the proprietary software loading processes . however , those processes cannot be deployed in a nonsecure environment , and do not offer the flexibility and generalization capabilities for a broad deployment to all levels of the delivery chain , including second tier resellers or corporate customers . third step ( 120 ): trustworthy software duplication in a non - secure environment , that provides a widely deployable manufacturing process . one objective of the third step is to provide replication processes based on industry standard installation procedures that are secure enough such that their deployment can occur in non - trusted environments . the duplication control mechanisms have no effect on the end - user experience because the control is performed at manufacturing time . the install procedures are preferably those that are the de facto standards . encrypting the standard software components , e . g . cab files . upon receipt of the duplication token : decrypting appropriate software components partially or fully supported by a hardware security device ; creating an image protected with core technologies , such as touch points ; and binding a tamper resistant hardware id associated with the personal computer to the image . when the end user starts the software for the first time , the image is processed within a trusted component , and upon the agreement of the eula , to make it fully operational and usable . a non - erasable certificate is produced , which is a proof that the software has been installed on that particular platform . this process is inherently secure from the component base download to the first time use of the software and relies on standard install procedures rather than proprietary systems . it is therefore much more trustworthy and scalable . the process requires a secure component embedded into the personal computer client that is able to insure trustworthy encryption / decryption and signature / hash functions . the same secure component can be used as a generic encryption integrated circuit or hardware module to provide hardware based security . however , this does not prevent software piracy at the client personal computer level because one can always take an image of the disk once the eula has been agreed upon and the image as been processed and duplicate the image at will . to avoid this problem , the invention provides unforgeable proof that the image has been bound to a given personal computer , i . e . a credential . fourth step ( 130 ): a complete software usage control system , i . e . an end user oriented system , is provided . one objective of this final stage is to ensure that an application , once securely pre - loaded onto the personal computer cannot be duplicated and used on another personal computer . when an application is launched , a secure process intercepts the application calls , verifies the application certificate signature and checks that the hardware identification ( hw - id ) contained in the certificate matches that of the personal computer , verifies the authenticity of the application , and creates a credential to be used for the application monitoring . additional levels of control can be achieved by including critical functions under the direct control of a policy activation token . this is also an excellent mechanism for detecting viruses because the system cannot activate images that have been modified . to be trustworthy , the secure process must establish a trust relationship with the secure component . it also must not be possible to bypass the secure process and launch an application without monitoring such activity . only a modification of the operating system can make this possible . the fourth step provides a very strong antipiracy system . when the application certificate is bound to a number of computers , e . g . an office , a home , or a laptop computer , and is portable ( e . g . implemented on a smart card ), step 4 provides a solution for using office applications on multiple platforms with a consistent environment while complying with an eula . although the invention is described herein with reference to the preferred embodiment , one skilled in the art will readily appreciate that other applications may be substituted for those set forth herein without departing from the spirit and scope of the present invention . accordingly , the invention should only be limited by the claims included below .