Universal confirms that it will be able to track down the MP3s on peer-to-peer networks using these watermarks, although the company's MP3 experiment will not make use of unique identifiers that would allow record labels to see which user purchased the files.

However, the strategy of tracking users -- those who illicitly trade songs and those who don't -- through digital watermarks is still on the labels' radar.

A number identifying every unique music file sold worldwide could be added using Activated Content's watermark, which crams 4 bits of watermarked data into each second of a compressed music file. If one were to play a song over speakers and rerecord it, those bits would remain intact, according to Hill.

Most of the company's current customers use its watermarks to stop music writers from leaking advance promotional copies onto the internet. That system uses a 32-bit watermark, which, according to Hill, can render 4.2 billion unique IDs -- far greater than the number of music reviewers in the world.

Unique watermarks would allow labels to hunt down and sue alleged copyright infringers with vastly increased efficiency, even if the file was copied from their computer without their knowledge. Hill calls the possibility a "privacy nightmare."

There must be ways around this

It's easy!

Anyone who's got the promo can rip it and leak it. When confronted by the TMTTH laywers they can claim that the cd was stolen (that's bound to happen all the time at radio stations).

If it's a big radiostation I doubt they will report it to the police and interrogate 100s of employees.

one man from polish forum has the promo and says that it IS watermarked and its why he's not leaking.

A number identifying every unique music file sold worldwide could be added using Activated Content's watermark, which crams 4 bits of watermarked data into each second of a compressed music file. If one were to play a song over speakers and rerecord it, those bits would remain intact, according to Hill.