Digital watermarks have recently been proposed for the purposes of copy pro
tection and copy deterrence for multimedia content, In copy deterrence, a c
ontent owner (seller) inserts a unique watermark into a copy of the content
before it is sold to a buyer. If the buyer sells unauthorized copies of th
e watermarked content, then these copies can be traced to the unlawful rese
ller (original buyer) using a watermark detection algorithm. One problem wi
th such an approach is that the original buyer whose watermark has been fou
nd on unauthorized copies can claim that the unauthorized copy was created
or caused (for example, by a security breach) by the original seller. In th
is paper, we propose an interactive buyer-seller protocol for invisible wat
ermarking in which the seller does not get to know the exact watermarked co
py that the buyer receives. Hence the seller cannot create copies of the or
iginal content containing the buyer's watermark. In cases where the seller
finds an unauthorized copy, the seller can identify the buyer from a waterm
ark in the unauthorized copy, and furthermore the seller can prove this fac
t to a third party using a dispute resolution protocol, This prevents the b
uyer from claiming that an unauthorized copy may have originated from the s
eller.