Microsoft has won a patent for a digital-watermarking technology that could be used to protect the rights of content owners even when digital music is distributed without DRM protection.

The technology, called "stealthy audio watermarking," inserts and detects watermarks in audio signals that can identify the content producer, "providing a signature that is embedded in the audio signal and cannot be removed," according to a filing with the U.S. Patent and Trade Organization (USPTO).

The application for U.S. patent 7,266,697 was filed May 3, 2004, by Darko Kirovski and Henrique Malvar, both of whom work at Microsoft Research. Malvar is a Microsoft distinguished engineer and managing director of Microsoft Research in Redmond, Washington, and Kirovski is a researcher there.

Microsoft currently has DRM (digital rights management) technology called Windows Media DRM that encrypts audio files and protects them from misuse or unauthorized redistribution. The company has traditionally been an outspoken proponent of using DRM to protect owners of digital content, though it said earlier this year it would consider selling DRM-free songs online after rival Apple struck a deal with EMI Group to do so.

Forensic digital watermarking technology, like the technology Microsoft has patented, doesn't encrypt files the way DRM technology does or prevent people from unauthorized use. However, it can be used to prove who owns the content of the digital file by encoding a file with a unique digital signature. That means illegally traded songs could be tracked back to the original purchaser, allowing authorities to identify illegal sharers and serving as a deterrent.

The technology could also be used to track files for royalty distribution.

In fact, Apple has been inserting simple watermarks into digital audio files that include personal information about the purchaser on some files sold over iTunes so those files can be traced back to their purchaser in the case of unauthorized distribution.

However, Microsoft's watermark is much more intrinsic to the file and cannot be stripped out easily by hackers, like Apple's can, said J. Alex Halderman, a computer science PhD candidate at Princeton University who specializes in DRM technology. "It's much harder for people to remove from the recording," he said.

The trick for these watermarks to be effective for digital music files, however, is that they must be inaudible and thus undetectable by those listening to the files, which has been difficult for those who have tried to create this technology in the past, Halderman said.

Indeed, in their filing, Kirovski and Malvar acknowledged that to work properly, the watermarks must not only be inaudible, but also "must be scattered throughout the file in such a way that they cannot be identified and manipulated" and "be robust enough so that it can withstand normal changes to the file, such as reductions from ... compression algorithms."

Microsoft Tuesday declined to comment on how it plans to use the watermark technology it has patented. However, Microsoft Research already has licensed similar yet non-forensic watermarking technology to a company called Activated Content, which is using the technology to insert and extract non-secure data into audio files.