A method for embedding an entire image, audio or video 
watermark sequence within another image, audio or video data sequence with minimum loss of 
data quality is presented. The method exploits the de-correlation property of data coefficients in the orthogonal transform domain, similar to the application in 
data compression through 
transform coding. The present invention describes the usage of a 
Discrete Cosine Transform as the embedding domain. However, other orthogonal transforms such as Fourier, Walsh-Hadamard, Haar, Sine and 
Wavelet can also be used for this operation. A 
unique key derived adaptively from spatial locations registering the thresholds of the ac transform energies is used to unlock or de-
watermark the embedded image or audio sequence. Moreover, an exponential filter has been developed to compress and expand the 
watermark coefficients prior to the embedding and retrieval process. The method can be used in resolving 
multimedia copyright protection issues arising on 
the Internet and in the music industry, such as the inclusion of a company's logo or an artist's recorded voice. The method can also be incorporated as a built-in feature for 
digital recording devices, such as still and video cameras, as well as more recent devices such as VCD and DVD players. Moreover, the method can be applied to the commercial and service sectors, where security in transmission and reception of private information in terms of speech or image is of the utmost importance.