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One of the greatest challenges confronting anyone who creates and/or owns intellectual property is figuring out when someone is stealing the property. This is particularly true where the intellectual property is available on the Internet. Now, the growing use of embedded digital watermarks — a combination of ancient coding concepts and modern technology — may give copyright owners a more effective way of identifying and prosecuting infringers. Digital watermarks work in ways somewhat similar to traditional physical watermarks, which are embedded text or images that may be seen from various angles or when held to the light. Watermarks, a faint design made in paper during the manufacturing process that typically identifies the maker, are used to hinder the counterfeiting of money and bank checks. The digital version permits information to be embedded in electronic forms of information such as electronic books, photographs, music and movies. The popularity of the Internet has resulted in intellectual property in electronic form finding its way onto the Web. Whether the information was intended to be published on the Web — such as online versions of publications, artwork and photographs — or whether that information otherwise found its way onto the Internet — such as music and movies — once information is in electronic form and on the Internet, it is relatively easy for someone to copy and redistribute that information. While copyright law prohibits copying and distribution without permission, the copyright owner must first discover that the information has been copied illegally, then where the duplicated information exists on the Internet. Given the vast number of computers on the Internet, finding cases of illegal copying can be next to impossible. That’s where digital watermarks come in. ARISES FROM ANCIENT ART Digital watermarks are a modern incarnation of the ancient art is steganography, a form of encryption where a message is hidden inside another message. One of the earliest reported uses of steganography can be found in the histories of Herodotus, describing how a message could be concealed in wax-covered tablets. In ancient Greece, text was written on wax-covered tablets of wood. In order to hide a message on a tablet, one would remove the wax, write a message on the wood, and then re-cover the wood with wax. As a result, the tablet would appear blank to anyone who didn’t know to look beneath the wax. Although the process has changed somewhat over the millennia, the fundamental approach of hiding information has remained the same. During World War II, for example, German spies used steganography to send hidden messages in what appeared to be innocuous letters to family members. Extracting the sensitive communiqu�s involved extracting one letter or number from each word in the innocuous letter. TRACKING WATERMARKS ONLINE Like their ancient forebears, digital watermarks are made up of information hidden within a file. The information can be used to identify the owner of the file, such as a photographer who might claim ownership of the copyright in a digital photograph. Alternatively, the digital watermark can be used to identify the distributor or end-user of an electronic file such as a computer program. Digital watermarks can even be embedded in music and motion pictures. The power of digital watermarks is that they can be tracked online. Modern technology has allowed digital watermarks to be used to enforce copyright law. For a yearly fee, copyright owners now can use such automated services to detect unauthorized uses of their copyrighted material. Without such technologies, finding instances of infringement — whether on the Internet or otherwise — is like trying to find a needle in a haystack. Beaverton, Ore.-based Digimarc Corp. provides a variety of digital watermark solutions, including a service that scans more than 50 million Web pages every month to determine whether and where digitally watermarked images are being used. Using the service, a photographer uses software to apply a digital watermark to a photograph before it is posted to the Internet. Digimarc’s service will scan the Internet to identify every Web site where the digital watermark is found and provide a report to the photographer identifying sites where the digital watermark appeared. The photographer may then determine whether the use of the photograph constitutes an infringing use. The process of digitally watermarking an electronic file is similar for most applications. The copyright owner uses software to apply the digital watermark to a file. In the case of a digital photograph, the digital watermark software modifies the pixels of the image without significantly altering the overall look. The result is that a photograph with a digital signature appears to the casual viewer the same way it would without the digital signature. In the cases of other electronic forms of information — music or movies — a digital watermark can be applied with no perceptible change. FINDING KARAOKE VIOLATOR Digital watermarks have even been used to identify specific distributors of musical recordings. Last February, the 10th U.S. Circuit Court of Appeals released an opinion in Palladium Music Inc. v. EatSleepMusic Inc. involving the alleged infringement of the copyrights to various karaoke music tracks — music recorded to permit people to sing along. According to information presented in the case, the owner of the rights to the karaoke tracks, Oklahoma City-based Palladium Music was able to discover that EatSleepMusic was selling allegedly unauthorized copies of Palladium’s copyrighted recordings on the Internet. Palladium Music ultimately sued EatSleepMusic and the company to whom Palladium had sold copies of its music, Tennessee-based Chartbuster Karaoke. By using a unique digital watermark in the music provided to Chartbuster Karaoke, Palladium was able to identify Chartbuster Karaoke as the source of recordings that EatSleepMusic was selling over the Internet. Although Palladium was found not to have taken the appropriate steps to secure its copyrights in the music at issue and did not prevail in the action as a result, the case nonetheless illustrates the potential digital watermarks have for assisting copyright owners who seek to protect their rights: a digital watermark can operate as a unique identifier. Given the prevalence of illegal online copying — as exemplified by the millions of users of online tools such as Napster, Aimster and Grokster to illegally copy and share music recordings — intellectual property owners know that posting their copyrighted material on the Web is risky. They also know that chances are good their intellectual property will find its way onto the Internet even if it was not intended to be distributed there. Through the use of digital watermarks, intellectual property owners may feel more comfortable taking that risk. Samuel Lewis is a partner at Feldman Gale in Miami, where he practices computer/Internet law and intellectual property law. He can be reached at [email protected].

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