A legal dispute between digital watermark developer Verance and rival Digimarc could complicate efforts to set a standard for DVD copy-protection. Verance on Wednesday filed a lawsuit in federal court in Portland, Ore., charging Digimarc with violating antitrust and unfair competition laws, the latest legal blow in a long-standing intellectual property dispute between the two companies. Among other things, the suit alleges that Digimarc illegally submitted Verance's digital watermarking technology to a standards group. The case could have wider ramifications for copyright holders, who may have to wait longer for a standard to emerge, analysts said. A previous copy-protection scheme for DVDs, known as CSS, was broken two years ago by Linux programmers, leaving Hollywood studios scrambling to find a replacement. The suit "is going to delay an adoption of a standard for DVD copy-protection," said Phil Benyola, digital media research analyst for investment company Raymond James Financial. "The longer they hash it out in the Portland courts, the longer it's going to take for the industry to (accept a) solution and get some compliant software out there."

The company is an active member of the Video Watermarking (VWM) group, a coalition of consumer-electronics companies that includes Hitachi, Macrovision, NEC, Philips Electronics, Pioneer and Sony. The group hopes to create a scheme based on digital watermarking technology that will allow film studios to distribute content online without giving ground to potential copyright pirates.