Hold one of those new hundred dollar bills up to the light, the Ben Franklin portrait facing you. Now look to the right. You’ll see another portrait of Ben staring at you, a ghostly image imprinted into the bill’s paper, imperceptible unless you look for it.

That’s a watermark, a little piece of 18th-century English technology that today continues to protect the United States’ and many other nations’ currencies against counterfeiters. Because such watermarks must be created during the paper manufacturing process (by means of a small mold attached to something called a dandy roll, which turns wet pulp into wet paper and is the most expensive part of a paper manufacturing machine, the rest of the machine being devoted mainly to the drying process), watermarks are nearly impossible for counterfeiters to duplicate.

Which makes watermarks a great if expensive way to guard against unauthorized duplication of documents, assuming, of course, that your documents are on paper, like hundred dollar bills are. If your documents are electronic, however, 18th-century technology doesn’t cut it: first, because the documents aren’t on paper, and second, because electronic documents are by their very nature easily duplicated, an exact copy often no farther away than point and click.

Twentieth-century paperless documents need a 20th-century sign of ownership: in essence, an electronic watermark not easily removed or duplicated. A new Princeton startup, Independence Way-based Signafy, has developed one.

Known as secure spread spectrum watermarking, Signafy’s technology alters images in ways that are imperceptible to the human eye, but that computers equipped with the right software can clearly see. These alterations cannot be removed or changed by anyone other than the owner without destroying the image. And no matter what you do to the image send it by E-mail, then copy it on a copy machine, then fax it, then copy it again, then scan it back into your computer the alterations remain identifiable, no matter how degraded or changed the image becomes. In fact, the inventors of the technology did exactly that and documented their methods in a trade journal

Watermarks are extra information placed in the contents of a photo or video or audio, explains Signafy president and CEO Jim Philbin. Without altering the look or sound of the original contents, you can add extra information to prove that you are the owner of the material.

Signafy’s watermark is a digital pattern embedded into the basic elements of an electronic image. Like a signature, the watermark identifies the image’s owner. And because the pattern or signature is indelible and inseparable from the image, wherever the image goes, the pattern goes with it.

Why does this matter? Because in a world filled with easily duplicated electronic data, copyright protection as the world has known it for centuries is becoming increasingly difficult.

Say you take a picture with your digital camera, download it into your desktop publishing program, and print it in your magazine. A person buys your magazine, scans the photo into his computer, and then sells the photo to another publication, where you happen to run across it a few weeks later.

In the old days, you could have shown up in court with the negative and said, hey, this guy stole my picture. But because you used a digital camera, you don’t have a negative. And your opponent in court claims that, in fact, you stole his image.

With Signafy’s digital watermarking technology, this dispute would be easily resolved. Your watermark would infuse your digital photo with an electronic signature that would clearly identify the picture as yours, a signature that would be computer-readable not only in the image originally printed in your magazine, but readable in all other copies, including the one published by your pilferer. Case closed.

Of course, no cases have been tried yet, Signafy’s Philbin says, noting that digital watermarking is a very young technology. But if you noticed a picture in a magazine that you knew was yours, you could go after the publisher for violation of copyright and be able to prove it.

In the abstract, digital watermarking is simple in the same way using a piece of software like Adobe Photoshop is simple. In Photoshop, you take an image and use the menus and control panels to manipulate it; with Signafy’s technology you take an image and the software watermarks it for you. But if you look behind either seemingly simple act, you find some very complex computer technology powered by some very heavy-duty math.

Digital watermarks, like much of computing, are based on algorithms. At the simplest level, algorithms are mathematical processes that generate a desired kind of output. In the context of watermarking, algorithms take the numerical representation of a digital image and everything in your computer’s brain is described by numbers, including the pixels, or dots, that make up images and generate a new numerical representation of that image. Embedded within that new representation is the secret code that identifies the owner of the image.

The algorithm is imposed on the image, explains Marc Triaureau, Jim Philbin’s assistant at Signafy. You can think of it as a serial number that becomes part of the integrity of the image. The watermark cannot be removed unless you know the algorithm and have the unwatermarked original, and remains part of the image no matter how it is manipulated.

To the human eye, the image is not altered significantly. But to a machine trained to look for it, it’s clearly there, and cannot be removed or changed.

Signafy is not the only company developing digital watermarking technology. Two other companies Digimarc of Portland, Oregon, and UK-based High Water Signum Å already have commercially available watermarking software on the market. Like Signafy’s technology, both competing technologies use algorithms to mathematically alter images in order to identify their owners. But unlike Signafy’s, those companies’ watermarks are relatively easy to remove, and are sometimes unstable when images are manipulated.

Our technology is the most secure and robust, Jim Philbin says, robust being the inside term for not easy to remove or alter unless you know how the image was watermarked in the first place. The difference between ours and others’ technologies is similar to the difference between public key and private key encryption. In private key watermarking, the person who adds the watermark alone has the information needed to extract it. In public key, anyone can detect the watermark. Most of our competitors use public key.

So unlike other watermarking technologies, Signafy’s creates a watermark the existence of which would be unknown, let alone decipherable or removable, to anyone but the person who applied the watermark.

In addition, Signafy algorithmically alters the significant portions of images, where other watermarking technologies tend to alter only the blank parts. This difference means that it is possible to remove other watermarks without significantly altering the watermarked image; try to remove a Signafy watermark, and you’ll end up with an image so degraded it’s unusable.

Currently available only as part of two high-end software packages Invisible Ink for Images Professional Software Development Kit, and Informix Invisible Ink Datablade, a module for Informix database software Signafy’s watermarking technology is geared to the professional user who needs serious image protection. By contrast, the less secure SureSign Writer Photoshop plug-in available from High Water Signum is just $99, a different market entirely.

Signafy’s technology was developed about two years ago by scientists at Forrestal-based NEC Research Institute, including Ingemar Cox. Uncharacteristically for a Japanese company, the $41-billion computer and electronics giant NEC decided to spin out the technology into its own startup company, rather than continuing to develop it in-house, Jim Philbin says.

After some discussion, it was decided to do a Silicon Valley-style startup, which goes against the grain of Japanese business practice, says Philbin, who in addition to his duties with Signafy remains the director of advanced computing technology at the NEC Research Institute, where he has worked since 1990. This is the first time a major Japanese company has done a startup here or in Japan.

The arrangement is uncharacteristic for the Japanese because, as Philbin notes, in Japan employees are not allowed to own stock in the company for which they work, while at Signafy the management team holds a significant percentage of equity (although NEC remains the principal shareholder).

The don’t have equity as a way to make money as a model, Philbin says of Japanese business practices. But NEC is looking for ways to do business in the 21st century, new models. So the goal with Signafy is not only to bring the technology to the market, but also to see if this kind of business model will work. It’s a real startup, and although as majority shareholder NEC could change the management if it wanted to, the management team controls the company’s destiny.

At present, Signafy has 10 employees, some from NEC, others recruited from outside. Philbin expects that number to increase to 20 by next year. In addition, he expects that the company will seek venture capital next year as well as it continues to develop its product portfolio, and that Philbin himself will eventually be replaced as CEO so that he can return to his job at NEC.

A native of York, Pennsylvania, Philbin holds undergraduate and master’s degrees in computer science from Yale. Before joining NEC, his career included computer program development and a five-year stint as director of the computer center at INSEAD, the international graduate business school in France. He began at NEC in 1990 as a senior research associate, later becoming the director of advanced computing projects before being named director of advanced computing technology. Going forward, Philbin expects Signafy to develop new watermarking-related products and services, mainly as a licenser of technology to large hardware and software firms rather than as a stand-alone manufacturer and marketer.

In the future, we expect to get involved in hardware with chips in cameras that will watermark images as they are taken, Philbin says. We’re also very strongly involved in the digital video disk standardization effort, trying to become the watermarking standard for that medium. And for smaller users, we’ll be building Photoshop plug-ins. Another potential application for the technology will be in web crawlers that roam the Internet looking for images with proprietary watermarks.

So in the future, everyone from home-based desktop publishers to directors of international photo agencies will be able to indelibly mark their images as their own, effectively protecting their copyrights in the digital age with electronic watermarks. And perhaps one day, when you hold some future iteration of the hundred dollar bill up to the light, you’ll no longer be able to see Ben Franklin’s face hovering secretly to the right of his portrait. But your computer will.

Signafy, 4 Independence Way, Princeton. Jim Philbin, president and CEO. 609-734-7620; fax 609-734-0788.

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