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Watermarking embeds a secret message into a cover message. In media watermarking the secret is usually a copyright notice and the cover a digital image. Watermarking an object discourages intellectual property theft, or when such theft has occurred, allows us to prove ownership. The Software Watermarking problem can be described as follows. Embed a structure W into a program P such that: W can be reliably located and extracted from P even after P has been subjected to semantics preserving transformations such as code optimization and obfuscation; W is stealthy; W has a high data rate; embedding W into P does not adversely aaect the performance of P; and W has a mathematical property that allows us to argue that its presence in P is the result of deliberate actions. In the rst part of the paper we construct an informal taxonomy of software watermarking techniques. In the second part we formalize these results. Finally, we propose a new software watermarking technique in which a dynamic graphic watermark is stored in the execution state of a program. 1 Introduction Apart from Grover 15] and a few recent US patents 10,20, 27,32], very little (publicly available) information seems to exist on software watermarking in which a copyright message is embedded into a program. This is in contrast to media watermarking which is a very active area of research 4,6,21, 29]. In the present paper we will try to bring together what little information does exist in the form of a taxonomy of software watermarking techniques, provide a formalization of software watermarking, and present new results on dynamic data structure watermarking.