This use case has been inspired by a real story recently encountered on the Internet [1].

An artist creates expensive digital drawings (intellectual property). He or she has an agent who takes over the distribution of the drawings to galleries and their sale to individual customers. The artist uploads the new works to the agent’s server and then receives notifications from the agent about the sales process. One day the artist finds some of the new drawings on the Internet despite legal contractual regulations prohibiting galleries and individual end-buyers from distribution. He or she would like to prevent further incidents and sue the contract violator for damages.

Traditional cryptographic DRM approaches are not helpful in this situation. They cannot reliably prevent the sharing of the drawings or identify the culprit. Any authorized gallery or end-buyer can view a drawing encrypted by DRM, which means that they can reproduce the drawing and put it on the Internet without leaving a trace to their identity.

Digital watermarking offers a working solution. It cannot enforce the prevention of the distribution of the drawings but it offers a means of identifying the contract violator by fingerprinting each legally distributed copy of the drawing with information about its initial buyer.

In order to implement this solution, the artist’s agent subscribes to a fingerprinting web service provided by the company DiWa specialized in digital watermarking. The service needs an image and a buyer identification string as input and delivers a watermarked image as output.  The agent needs only a minor modification of his systems: instead of sending drawings directly to a gallery or an end-buyer, the systems first send the drawings together with the name of the buyer to the fingerprinting service and only then forward the resulting image to the corresponding gallery or end-buyer.

If an illegally distributed copy is found on the Internet, the advantages of flexibility, self-sufficiency and reliability of digital watermarking technologies described in the Technological Advantages section make it very probable that any information about the initial buyer encoded in the drawing by the DiWa web service is still present in the copy. The information can then be extracted by another web service provided by DiWa and the contract violator can be sued for damages.

References:
[1] S. Meyer. (2008) Midnight Sun: Edward's Version of Twilight. URL: http://www.stepheniemeyer.com/midnightsun.html (accessed May 9, 2009).