Patent ID: 7443982

Claim:
A method of watermarking and transferring watermarked material in a system including a transaction server, first and second clients, a first apparatus for applying a perceptible watermark to the material and second apparatus for removing the watermark, the method comprising the steps of: transferring from the transaction server to the first apparatus (i) data for creating a watermark, the creating data including (a) data defining an invertible algorithm and (b) data for creating at least one security key associated with the algorithm and (ii) data for creating a material identifier; using said first apparatus to apply a material identifier to the material and to apply a perceptible watermark to the material in accordance with the invertible algorithm, wherein the perceptible watermark is applied to the material as part of a compression of the material, and the invertible algorithm provides a perceivable impairment to the material; transferring from the first client to the transaction server said material identifier and data for inverting the algorithm including said at least one key; transferring the watermarked material to the second client; deriving said material identifier from the material; transferring the identifier from the second client to the transaction server; subject to predetermined conditions being satisfied, transferring from the transaction server to the second apparatus watermark removal data associated with said material identifier, the removal data including the at least one key and data defining an algorithm for removing the watermark in conjunction with the at least one key; and using the second apparatus to remove the perceivable watermark using said removal data, so as to remove the perceivable impairment from the material.