It's been three years in the making (since May 3, 2004, to be precise), but Microsoft has now won a patent (number 7,266,697, for those of you keeping track at home) for what it calls 'stealthy audio watermarking.' In plain English, this new technology is designed to enable a song vendor to keep track of the origin of a digital music track, no matter how many times it's converted to other formats or distorted.
Beating 'Plausible Attacks'
According to ArsTechnica, the technique is designed to defeat a series of so-called 'plausible attacks' as identified by the RIAA, including sucessive digital/analog and analog/digital conversions, MP3 and other lossy conversion techniques, frequency response distortion, and others.
An End to DRM Without Losing Control? Implications of the Patent
If Microsoft's patent works as well in practice as the description states, it could enable music vendors to dump DRM via encryption without losing control of their content. As discussed previously here, some major music vendors are already selling unencrypted MP3 audio tracks as a premium-quality, more flexible to use alternative to standard encrypted WMA audio tracks. However, without watermarking, vendors can't be sure if their music is being redistributed en masse by purchasers. Digital watermarking can fix that, especially if each download is individually watermarked.
Beating 'Big Brother'
Although watermarking digital audio tracks doesn't run the risk of "I can't play this on my device" the way that current DRM methods do, it's still a potential privacy invader. Don't like the idea? Do something old-fashioned: create your own digital music tracks from your own CD collection. If you originate the digital music, the only 'watermark' you need to worry about is the one you left on the jewel case from setting a cold drink on it during the ripping process.