Watch Out! We can trace that MP3 back to you

MP3 Inventor, Fraunhofer Institute, Develops Tool to Fight Piracy.
Fraunhofer Institute has developed prototype technology, based on the group's own digital watermarking technology, for tracking pirated audio files in peer-to-peer file-sharing networks.

The system lets content providers, such as music studios, embed a watermark in their downloadable MP3 files. Watermark technology makes slight changes to data in both sound and image files. For instance, the change could be a higher volume intensity in a tiny part of a song or a brighter color in a minuscule part of a picture. Even the best trained human eyes and ears can't detect the change.

If, for instance, you purchase and download a CD, burn a copy and give it to a friend and that person puts it on a file sharing network, the system will trace that music back to you and, depending on the legal system of the country you're in, you could be hit with an expensive fine... or worse.