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Digital watermarking technology consists of a piece of software code placed onto files before they are distributed. The code identifies the copyright holder of the file, and depending on the type of watermark, may contain instructions and limitations on the file's use.
Copyright holders can also use software to search the Internet for Web sites that contain images or files with their watermark.
Digimarc's new patents allow the company to "build a sense of protection" for both copyright holders and its own intellectual property concerns into its existing products, said Bill Conwell, vice-president of intellectual property at Digimarc.
An effort to create industry-wide standards for digital watermarks under the Secure Digital Music Initiative (SDMI) has stalled, and a wide variety of companies are choosing to "go it on their own", obtaining patents on their own versions of the technology, Conwell said.
Digimarc is working on projects for both audio and video security. In conjunction with Koninklijke Philips and Sony, the company is developing security technologies for the Digital Versatile Disc Copy Control Association (DVD CCA). The company is also working with a "consortium of central banks to combat banknote piracies", said Conwell.
Digital watermarks are seen as a potential solution to the problem on widespread digital copyright violations spawned by Napster's popular music-swapping service, but their reliability has not been proven.
Princeton University professor Edward Felten attempted to present a paper in April 2001, outlining the results of his team's work on breaking digital watermarking technology in a hacking contest sponsored by the SDMI.
But the SDMI, the Recording Industry Association of America (RIAA), and Digimarc competitor Verance threatened to sue Felten for breaking the Digital Millennium Copyright Act's ban on disseminating methods to break the technology.
Felten and co-author Scott Craver later presented the paper at the USENIX Security Symposium in Washington, DC in August 2001. In it, they claimed that digital watermarks are ineffective on audio files because of the high cost of implementation and the relative ease of breaking the technology.
Felten's team worked on older, outdated digital watermarks, according to Conwell, and patent was obtained specifically to increase the security and robustness of Digimarc's products.