Digital watermarking

The invention is a system for digital watermarking that operates on a conventional digital video stream to etch, on hand, and read, on the other hand, digital watermarks in the stream that do not visibly interfere with the video content. A system according to the invention operates on digital data that has been transformed into the spatial-frequency domain, using inter-block differences between spatial-frequency coefficients to encode the bits of a digital watermark. Using the principles of the invention, it is possible to encode multiple watermark bits between two adjacent blocks, thus providing higher watermark data rates relative to underlying video content.