
Not necessarily --- they could release the details of the algorithm
without releasing the "system key" (called SK by Hellman).  That would
make most people happy, and with some sort of verification procedure
before key exchange, the "official" chips would only work with other
"official" chips.  In other words, secrecy of SK makes "physically
identical clone versions" impossible;  secrecy of the algorithm shouldn't
be necessary.

Of course, revealing the algorithm opens them up to attacks on SK ---
since all units share this key, compromising it may be a big deal.
Personally, I wouldn't feel too comfortable knowing that one "secret"
80-bit number held in many places was all that guaranteed my security.
Of course, compromise of SK doesn't necessarily mean that the system
is compromised, but it's impossible to tell whether or not that's true
with a secret algorithm.

Incidentally, what's to keep a "secret algorithm" from using the secret
SK as the main key, with UK being only marginally important.  Then
a court order for UK may not even be necessary to do a wiretap.
