Robust LLM Watermarking with Minimal Semantic Distortion for IP Protection

Proprietary large language models (LLMs) face risks of intellectual property (IP) violation, as adversaries can replicate an LLM by collecting input-output pairs to train a surrogate model, causing financial setbacks. Watermarks offer a promising defense to verify ownership, but existing methods often struggle with semantic distortion, factual inconsistency, and adversarial attacks. In addition, key-conditioned watermarks for provider-specific detection, especially in cross-provider and multi-user scenarios, remain largely underexplored. To address these challenges, we propose SAFESEAL, a novel key-conditioned watermarking framework that achieves strong detectability with minimal impact on model utility, effectively balancing detectability, utility, and robustness. SAFESEAL preserves named entities while substituting linguistic terms with context-aware synonyms through a key-conditioned Tournament sampling mechanism, maintaining semantic fidelity and factual consistency. For detection, we introduce a key-conditioned contrastive detector that jointly encodes the text and key, enabling provider-specific and robust watermark verification. We derive theoretical bounds on the utility-detectability trade-off and significantly reduce latency through lightweight models, batching, and parallelism. Extensive experiments show that SAFESEAL outperforms baselines in utility, detectability, and robustness, achieving a BERTScore of 0.983, entity similarity of 0.963, a 98.2% detection rate, and the highest human ratings for text quality and content preservation, with latency comparable to the fastest baseline. To promote transparency and community-driven progress, we release the first public watermark leaderboard and an interactive demo.

SoK: Are Watermarks in LLMs Ready for Deployment?

Large Language Models (LLMs) have transformed natural language processing, demonstrating impressive capabilities across diverse tasks. However, deploying these models introduces critical risks related to intellectual property violations and potential misuse, particularly as adversaries can imitate these models to steal services or generate misleading outputs. We specifically focus on model stealing attacks, as they are highly relevant to proprietary LLMs and pose a serious threat to their security, revenue, and ethical deployment. While various watermarking techniques have emerged to mitigate these risks, it remains unclear how far the community and industry have progressed in developing and deploying watermarks in LLMs. To bridge this gap, we aim to develop a comprehensive systematization for watermarks in LLMs by 1) presenting a detailed taxonomy for watermarks in LLMs, 2) proposing a novel intellectual property classifier to explore the effectiveness and impacts of watermarks on LLMs under both attack and attack-free environments, 3) analyzing the limitations of existing watermarks in LLMs, and 4) discussing practical challenges and potential future directions for watermarks in LLMs. Through extensive experiments, we show that despite promising research outcomes and significant attention from leading companies and community to deploy watermarks, these techniques have yet to reach their full potential in real-world applications due to their unfavorable impacts on model utility of LLMs and downstream tasks. Our findings provide an insightful understanding of watermarks in LLMs, highlighting the need for practical watermarks solutions tailored to LLM deployment.