BURBANK, Calif. — Computer and consumer-electronics companies are jockeying to set standards for digital watermarking — a technique for electronically identifying and protecting copyrighted material. The technology they establish could bring a new level of security to digital videodisks and could prove a key enabler for electronic commerce via the Internet, cable TV and satellite.

But formidable issues remain to be addressed. For now, research into audio and video watermarking is proceeding separately; that could yield approaches that call for distinct detector circuits, upping the cost and complexity of systems support for digital watermarks. And it's unclear which of the groups currently grappling with the intricacies of digital watermarking is the most appropriate forum for establishing a standard that could apply across a range of platforms.

Meanwhile, some developers that should have a voice in the effort, observers say, may be coming to the table too late to protect their interests, or may not have been invited at all.

One of the most visible groups attacking the problem is the Copy Protection Technical Working Group (CPTWG), an ad hoc, voluntary industry group comprising representatives — many of them engineers — from Hollywood's content-production studios and from the computer and consumer-electronics industries. The group is pursuing techniques to hide copyright marks and generational copy-control information in digital video.

To date, seven proposals have been made to CPTWG's Data Hiding SubGroup (DHSG), and their sponsors — Hitachi, IBM, Macrovsion/Digimarc, NEC, Philips, Pioneer and Sony — have participated in two rounds of digital video watermark testing. But the technologies listed and evaluated as seven competing proposals in a DHSG interim report two months ago are fast coming down to three merged approaches.

IBM Corp. and NEC Corp. were the first to announce they would combine their pitches. Since then, the Macrovision/ Digimarc group has similarly teamed with Philips, EE Times has learned. At the last DHSG meeting here, "we made a joint demonstration to gauge reaction on our combined solution," said Mark Belinsky, senior vice president of Macrovision. "We are looking for one or more additional partners to form a formal consortium."

Meanwhile, a representative from Hitachi stated at the same meeting that Sony, Hitachi and Pioneer would prepare a joint proposal to DHSG.

While some in the industry interpret the consolidated DHSG proposals as a prelude to a cross-industry agreement on watermarking methods, others say the major studios remain skeptical that any of the proposals will become a de facto standard anytime soon.

One hitch is that CPTWG is by no means the only organization pursing a standard for digital watermarking. Among the more visible initiatives is one by the International Federation of the Phonographic Industry (IFPI; London) to select an audio watermarking technology. And the Digital Audio-Visual Council (Davic) is studying security issues for electronic commerce.

Observers wonder whether the technologies eventually embraced by CPTWG will be used not just in DVDs but also for electronic commerce via the Internet, satellite and cable. If so, they ask, is the CPTWG the best forum for determining technologies with such far-reaching implications?

Companies that have responded to the DHSG call for proposals confirmed that they expect to derive a cohesive watermarking technology that could be deployed across platforms. But they bristle at suggestions that the process will be undemocratic.

Alan Bell, program director of IBM DVD Project Office, said his company has become involved in the effort because providing "an additional safety net for scrambling is essential to send digital content electronically, and it's relevant not only for DVD players but also for PCs and the Internet." If watermarking is embedded in digital contents, Bell said, "it will be in everyone's interest" to use the same detector type, whether the contents are to be distributed via satellite, cable or DVD disk. DVD is just "half the story."

"This is not about declaring a solution," said Bell; "it's about building support in the industries."

Partner Jim Burger at Dow, Lohnes & Albertson, which represents the computer industry's Information Technology Industry Council (ITIC; Washington), similarly sees little cause for concern. Any group that "includes executives of Hollywood studios will think long and hard to make sure whatever technology they pick will work on cross-media devices." Burger said. "At this point, I don't know if we can improve our decision by inviting all other industries, including cable, satellite and others who may not have been active in the process.

"We are not saying our choice is going to be a slam dunk or that we're going to jam it down anyone's throat. This industry doesn't work that way."

Fiona Branton, vice president and chief counsel at the Information Technology Industry Council, agreed that the digital watermarking technology ultimately chosen for DVD movies "may end up as a de facto standard" for electronic commerce. Asked whether the computer industry's participants are aware of that likelihood, however, Branton responded, "Frankly, I don't think they've made the connection. Things are not that organized."

Voting rights
Given the impact the selected watermarking technology could have across platforms, the burden will be considerable on the body that votes to approve it. Neither the DHSG nor the CPTWG has opted to take on the task, instead shunting the voting power to the Copy Protection Advisory Council (CPAC). Still in the formation stage, the CPAC will be a technical advisory board to the CSS Entity, a not-for-profit corporation that will manage and issue Content Scrambling System licenses to those requiring access to a CSS decryption algorithm to build DVD chips, boards or systems.

Formation of the CSS Entity is imminent, and the CPAC is expected to approve a digital video watermarking technology by the end of the year, according to sources close to the project.

Paul Wehrenberg, manager of advanced mass-storage and optical standards at Apple Computer and one of three DHSG co-chairmen, said standards establishment was never a part of DHSG's mission. "We were chartered by the CPTWG to investigate whether the concept of digital video watermarking makes sense and is mature enough to allow for marking in video, and if so, to find out what technical solutions are out there," he said. "What we've done so far has been very much a process of technical discovery."

Visibility and survivability tests have been run, but several technical hurdles remain, Wehrenberg said. "They include discussions on a copy-once scheme, architectural issues on where to place watermarking and watermarking detectors, further studies on false positives, and verification of gate counts for detector ICs."

The DHSG has not used an independent agency to test the different proposals, mainly because the CPTWG remains a voluntary, ad-hoc group without any funding, said IBM's Bell. "But we all believe that the DHSG, driven by chairmen Wehrenberg at Apple, Jerry Pierce at Universal Studios and Robert Finger at Matsushita, has done a superb job."

"Frankly, I think [DHSG members] are delighted to turn over the final decision to CSS," said Burger, whose firm represents not only the ITIC but also such key CSS participants as IBM, Hewlett-Packard, Apple, Microsoft, Intel, Zoran, ATI Technologies, Mediamatics and STMicroelectronics. Although the bylaws are still in the making, anyone who becomes a CSS licensee could become a member of the CSS Entity. There will be two different membership levels; the higher-priced, "participating" membership will bring the right to vote, change rules and modify specifications, Burger said.

Among as many as 200 potential CSS licensees, 21 to 27 CSS members are expected to be elected to CPAC membership, according to Burger. The goal is to ensure equitable of the content, consumer and computer industries, whose businesses CPAC's decisions will affect. "CPAC's decision can be overruled by CSS members or reversed by the entire industry," Burger noted. "It's a process as democratic as it gets."

Still unclear, however, is whether that structure is sufficiently understood by businesses that might be affected by CPAC's decisions but that have no current role in building or designing DVD products. Companies that have neglected to follow DVD developments closely or have yet to pony up for a CSS license may find it difficult to have their voices heard.

Then there are those who claim to have been excluded from the CPTWG process despite having approached the group early on. One such observer is Scott Moskowitz, chief executive officer of Blue Spike Inc. (Miami) and inventor of the company's Giovanni digital watermarking technology, which debuted this month.

"As a proponent and a developer of our own watermarking technology, covered by six patents, it's shocking that all of our attempts to contact the 'appropriate' parties [at CPTWG] have come to nil over a three-year period," Moskowitz said.

Giovanni is currently applicable to music and still images, although Moskowitz claims that its key design and encoding method could also be used to watermark video. The technology may have failed to grab CPTWG's attention because that group has focused nearly exclusively on video.

"A couple of companies may have suggested audio-oriented digital watermarking technologies, but their voices just didn't gain enough support within the group," acknowledged IBM's Bell.

"Audio wasn't excluded," said Burger, "but music people wanted to do a separate thing."

Audio's Muse
At the International Federation of the Phonographic Industry (IFPI), that "separate thing" is the Muse project. "Our testing is proceeding according to plan and is generating very interesting results," said Paul Jessop, director of technology at IFPI. "As we go on, our parallel work on the applications of audio watermarking shows that it will be a vital component of future protection systems for sound recordings."

Funding for the year-old embedded signaling project is split evenly between the European Commission and the music industry. TNO, an independent Netherlands-based research laboratory, is testing the Muse technology. Partners in the project include IFPI, the Recording Industry Association of America, Telstar and the international arms of BMG, EMI, Polygram, Sony, Universal and Warner.

According to sources, the current plan is to make results available to the partners in October, after extensive listening tests. The IFPI will neither make public the participants in the tests nor publish the results.

Blue Spike submitted its Giovanni digital watermarking technology to Muse and is among four proposals, out of a total of eight submitted, whose watermarks were deemed inaudible, Moskowitz said.

Bell said IBM has submitted an audio watermarking technology to the Muse project, separately from its CPTWG submission. Two distinct approaches are required, he said, because "audio has less noise where we can hide watermarks, while it's easier to fool human eyes in video watermarking."

There has been little effort thus far to merge audio and video watermarking efforts into a cohesive initiative. If Muse and the CSS Entity choose entirely different methods, any consumer device designed to handle digital audio and video may have to incorporate two detector ICs.

"The proposals currently being considered by CPTWG are all video watermarking schemes; that's a different problem altogether," said an IFPI member, who asked for anonymity. "We are not sure at which stage to bring CPTWG into the frame. It may have a role to play; but it deals with specific issues, and audio watermarking is not on its list at the moment."