As part of a contest in 2000,
SDMI (Secure Digital Music Initiative) invited researchers and others to try to break the
digital audio watermark technologies that they had devised. In a series of individual challenges, the participants were given a sample audio piece, with one of the watermarks embedded. If the participants sent back the sample with the watermark removed (and with less than an acceptable amount of
signal loss, though this condition was not stated by SDMI), they would win that particular challenge. Felten was an initial participant of the contest. He chose to opt out of
confidentiality agreements that would have made his team eligible for the cash prize. Despite being given very little or no information about the watermarking technologies other than the audio samples and having only three weeks to work with them, Felten and his team managed to modify the files sufficiently that SDMI's automated judging system declared the watermark removed. SDMI did not accept that Felten had successfully broken the watermark according to the rules of the contest, noting that there was a requirement for files to lose no sound quality. SDMI claimed that the automated judging result was inconclusive, as a submission which simply wiped all the sounds off the file would have successfully removed the watermark but would not meet the quality requirement.
SDMI lawsuits Felten's team developed a scientific paper explaining the methods used by his team in defeating the SDMI watermarks. Planning to present the paper at the Fourth International
Information Hiding Workshop of 2001 in
Pittsburgh, Felten was threatened with legal action by SDMI, the
Recording Industry Association of America (RIAA), and
Verance Corporation, under the terms of the
DMCA, on the argument that one of the technologies his team had broken was currently in use in the market. Felten withdrew the presentation from the workshop, reading a brief statement about the threats instead. SDMI and other copyright holders denied that they had ever threatened to sue Felten. However, SDMI appears to have threatened legal action when spokesman Matt Oppenheim warned Felten in a letter that "any disclosure of information gained from participating in the Public Challenge....could subject you and your research team to actions under the Digital Millennium Copyright Act.". This has been described as a case of
censorship by copyright. Felten, with help from the
Electronic Frontier Foundation, sued the groups, requesting a
declaratory judgement ruling that their publication of the paper would be legal. The case was dismissed for a
lack of standing. Felten presented his paper at the
USENIX security conference in 2001. The
United States Department of Justice has offered Felten and other researchers assurances that the DMCA does not threaten their work and stated that the legal threats against them were invalid. ==Sony rootkit investigation==