The Fraunhofer Institute IPSI in Darmstadt, Germany, developer of the MP3 format, has announced new watermarking technology. The technology includes a watermark maker, which would be embedded in software used to generate digital files by copyright holders, and a watermark detector that identifies the watermark. The Institute has developed a software client that monitors the P2P networks.

Watermarking has previously been proposed by the DCIA, a P2P industry association and examined here. Watermarking has been touted as an anti-piracy tool because it can identify the original licensor of the content. But it has little applicability to P2P networks where unauthorized content is generated by the user, not the publisher.