Watermarks originally were used in paper manufacturing in order to uniquely identify the manufacturer of the paper. Now the same concept is being used to imbedded identifiers in digital media in order to identify the source of the content. For example, the music industry wants to watermark digital music in order to track down pirates.
Most color copiers built today watermark their output so that copies can be tracked back the copier. Rumor has it that inkjet printers are going to start watermarking their content. Other rumors imply that Xerox answers such requests from law enforcement agencies several times per week.