1. What Is a Digital Watermark?
A digital watermark is a set of data embedded in a digital image, which may be used for a number of different purposes including copyright protection. A digital watermark can be detected only by appropriate software. Instead of “ensuring the authenticity or integrity of documents, as a digital signature or a digital seal does, a digital watermark aims to identify the origin, author, owner, usage rights, distributor, or authorized user of an image, video clip, or audio clip, even if the image or clip has been processed and distorted.”  The unique reference contained in the watermark links to a particular database that holds complete copyright contact information. Thus, the digital information embedded in the digital watermark helps identify the copyrighted work as original, which in turn helps prevent piracy of copyrighted works.
Digital watermarking is relatively a new way of protecting intellectual property, however, the theories and technologies behind it have been around for a while: computer-based steganography (cryptography), spread-spectrum communications, and noise theory.
2. Detection and Use of
“Digital watermarks are effective only when imperceptible;
[they] cannot be visible when viewing a digitized photograph or audible when
listening to a digitized sound recording. Otherwise, watermarks would obstruct
the quality of the image or the music and, furthermore, facilitate removal by
copyright infringers.” Furthermore, in order to be effective,
watermarks must remain recognizable even if the document has undergone several
conversions including copying, editing, scanning, and rescanning.
Although digital watermarks are unlikely to provide protection against theft, they effectively deter copyright piracy of still images, video and audio files transmitted over the Internet, intranets, digital satellite and digital cable. For example, an intentional attempt to delete watermarks will result in a serious degradation in the quality of the work, thus, giving viewers or listeners less incentive to pirate the inferior copy.
Second, “a copyright owner may be able to trace the source of an unauthorized copy posted on the Internet, thereby exposing that user inducing the abuse to liability.” Finally, because an imitated work would be easily identifiable from the original, copyright owner may have more confidence to distribute his own work on the internet.”
3. Application to Current Copyright Issues.
Proving online infringement is difficult, and digital watermarks, (along with other protections afforded under the current copyright laws) can make it easier for copyright owners to pursue an infringement claim. The following cases, decided prior to the development of the digital watermark technology, demonstrate its importance. In Playboy v. Webbworld,  a federal court in Texas found the operator of a web site liable for copyright infringement where the web site included photographs that had appeared in Playboy magazine. Apparently, without seeing a need for further explanation, the court simply stated: “The images retrieved by [Playboy's electronic infringement research assistant] from the [defendant's] website are virtually identical to those images which previously appeared in one of Playboy's copyrighted magazines.” In cases, where virtual identity may not be readily available to an unaided eye, watermarks will play a very important role in detecting infringement.
In a similar suit filed by Playboy, Playboy v. Russ Hardenburgh, Inc. in Ohio, the court found a corporation and its president and sole shareholder liable for 412 infringing graphic image files found on the defendant's computer bulletin board system. The president was found personally liable, the court said, because he “has the authority, right and ability to control the content of the BBS and its operations.” In June 1997, Playboy announced that it was using a digital watermark developed by Digimarc Corp. to keep track of whether photos from Playboy's Web site wind up elsewhere on the Net.
 Lidia Pedraza, Comment, Entertainment Law Initiative 2000 Legal Writing Contest.
 Jian Zhao, Look, It's Not There: Digital Watermarking is the Best Way to Protect Intellectual Property from Illicit Copying, BYTE.COM, Jan. 1997 (visited Feb. 15, 2003) <http://www.byte.com/art/9701/sec18/art1.htm>.
Rosemarie F. Jones, Comment, Wet Footprints? Digital Watermarks: A
Trail to the Copyright Infringer on the Internet. 26.
Pepp. L. Review 559, 568-569.
 See Zhao, Supra, note 2.
 See A & M Records, Inc. v. Napster, Inc., (2000) 114 F. Supp. 2d 896 (The case briefly discusses the advantages and disadvantages afforded by digital watermarks.)
 See id. at p. 1174.
 Playboy v. Russ Hardenburgh, Inc. (1997) 982 F. Supp. 503.
 Id. at p. 514
 Dan Goodin, A Market Waiting to Happen, Intellectual Property Magazine September,