The Center for Democracy & Technology (CDT) issued an interesting paper titled “Privacy principles for digital watermarking“. CDT published similar principles of other technologies such as RFID or DRM.

The document proposes eight principles:
1. Privacy by design; Interestingly in this principle, CDT recommends that the digital watermark technology providers imposes, by contract binding, to the application designer to respect privacy issues. This is highly ethical but is it realistic in business environment?
2. Avoid embedding independently useful identifying information directly in watermark; in other words the payload should look random without access to relevant information
3. Provide notice to end-users; CDT provides an interesting rationale to inform end users if the watermark is used against copyright infringement. End user should secure his/her content to avoid theft by third parties; else they may suffer from legal actions.
4. Control access to reading capability
5. Respond appropriately when algorithms are compromised; Their recommendations is not to renew the algorithms as technologists would recommend. Rather, CDT recommends to publish a notice if the hack allows watermark forging. I am not sure that this will be loved by technology provider
6. Provide security and access control for back-end databases
7. Limit uses for secondary purposes
8. Provide reasonable access and correction procedures for personally identifiable information

The principles are sound and many of them apply to other security related techniques. Of course, in view of the goal of its editor, some recommendations are Utopian. This document is worth reading.