Watermarking Companies in Patent Dispute

Can pirate chasers attend to business while accusing each other of piracy? Digimarc and Verance Corporation, two competitors in the digital watermarking race, have been swapping accusations over patent infringements.

On Wednesday, May 2, Tualatin, OR–based Digimarc was granted 28 patent applications for digital audio watermarking technologies that it had filed for between 1993 and 1995. The US Patent Office issued a "Notice of Allowance" approving Digimarc's patent claims, and on the same day informed the company that 74 of the 94 claims made in Digimarc's US Patents #5,636,292 and 5,850,481 had been approved as "patentable."

The approvals coincided with Digimarc's announcement of a new video watermarking technology that is intended to protect video content distributed over the Internet. "Digimarc's early patent filings contain a wealth of pioneering watermarking technology relating to audio, video, and still imagery . . . . We have established a large portfolio of landmark patents in still image and video watermarking, and we are now broadening our portfolio with more key patents in audio watermarking," said Digimarc CEO Bruce Davis.

Davis saw approval of the claims as validation of litigation that Digimarc launched earlier this year against its competitor Verance Corporation, citing infringements of patents for technology used to hide watermarks in digital audio files and in other types of media. The notification from the Patent Office will enable Digimarc to pursue its case against Verance, which it had put on hold while Patent Office officials examined the evidence. Davis described the notification as "a great outcome, re-affirming the validity of the vast majority of the claims in these two early patents. We expect the re-exam certificate to be issued later this year, which should permit us to immediately resume the Verance lawsuit."

The day after the Patent Office made its rulings public, San Diego–based Verance emphasized that claims made in three of Digimarc's patent applications were rejected and still under reexamination. Digimarc's celebratory statements were premature, according to Verance executives, who pointed to rejected claims as proof that the dispute is far from resolved. "We are pleased with the Patent Office's rejections and remain confident that Verance will be absolved of any infringement of those claims, if they survive the reexamination proceedings," said Verance CEO Robert Warren.

Whether the two adversaries will resolve their dispute in or out of the courtroom isn't clear at this point. Digimarc has applied for more than 200 patents on its technology.