Rivals give watermark a stamp of approval

WASHINGTON — Efforts to come up with an additional layer of copy protection on DVDs to back up the compromised Content Scrambling System now in place took a turn for the better last week.

Two groups of companies — the so-called Galaxy Group, consisting of Hitachi, NEC, Pioneer and Sony; and the so-called Millennium Group, made up of Digimarc, Macrovision and Philips — agreed to combine forces on a single watermarking standard that could help prevent copying of DVDs, even if someone manages to hack the CSS encryption codes.

The two groups had previously backed separate, competing standards. Open warfare between them over patent and antitrust issues was a primary cause for the breakdown in industry negotiations over a watermark standard in January 2000.

However, the cessation of hostilities between Galaxy and Millennium is no longer enough to itself bring about a new copy protection standard. In March of this year, the DVD-Content Control Assn., the group that licenses CSS technology to studios, hardware makers and DVD replicators, decided to take another crack at a watermark standard and issued a Notice to Interested Parties seeking proposals.

Sources close to the situation say DVD-CCA has received “multiple” new proposals in addition to the combined Galaxy/Millennium system — perhaps as many as four. So while Galaxy’s and Millennium’s original individual systems were leading contenders for an industry standard the first time around, their combo standard will be among those being carefully evaluated by outside technology experts, a process that is likely to take months.

The need for a supplemental copy-protection system has grown more acute over the past year. The primary encryption system, CSS, has been hacked multiple times, and a dozen or more hacking programs are widely available on the Internet.

Once those programs have been used to strip the encryption from a disc, the movie can be easily copied to a computer hard drive and uploaded to the Internet.

A new generation of digital video recorders is also beginning to trickle onto the market in the U.S., including digital VCRs and recordable DVD systems.

Originally, all digital video recorders were to carry special circuitry that would recognize a watermark on a DVD and refuse to copy it. But with no such standard in place, the recorders being built today do not contain the right circuitry.

Another open question is whether the general consensus on adopting a watermark standard among studios, consumer electronics companies and computer manufacturers that existed the first time around still holds.

Computer makers’ support for a system that blocks the copying of digital information was always somewhat begrudging, and if they were to not go along this time it could leave a hole in any new copy-protection regime.

Macrovision president Bill Krepick thinks the consensus is still there, but new negotiations can’t start until the DVD-CCA picks its new standard-bearer.

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