Originally Posted by tical

The watermark would be able to tell you who downloaded the first copy of it (before it was released) to the public. So if that user shared a video he downloaded by uploading it to a tube - you would be able to know it was him.

What happens after that would be entirely up to the paysite owner, content producer, and their lawyers. I can't guarantee this would stand up in court, but if it did, just ONCE, it could put a nice dent in this type of piracy (at least coming out of the states).