We propose a secure watermarking scheme that integrates watermarking with cryptography for addressing some important issues in copyright protection. We address three copyright protection issues—buyer-seller identification, copyright infringement, and ownership verification. By buyer-seller identification, we mean that a successful watermark extraction at the buyer's end will reveal the identities of the buyer and seller of the watermarked image. For copyright infringement, our proposed scheme enables the seller to identify the specific buyer from whom an illegal copy of the watermarked image has originated, and further prove this fact to a third party. For multiple ownership claims, our scheme enables a legal seller to claim his/her ownership in the court of law. We will show that the combination of cryptography with watermarking not only increases the security of the overall scheme, but it also enables to associate identities of buyer/seller with their respective watermarked images.