We present a methodology for the watermarking of synchronous sequential circuits that makes it possible to identify the authorship of designs by imposing a digital watermark on the state transition graph (STG) of the circuit. The methodology is applicable to sequential designs that are made available as firm intellectual property, the designation commonly used to characterize designs specified as structural hardware description languages or circuit netlists. The watermarking is obtained by

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... ulating the STG of the design in such a way as to make it exhibit a chosen property that is extremely rare in nonwatermarked circuits while, at the same time, not changing the functionality of the circuit. This manipulation is performed without ever actually computing this graph in either implicit or explicit form. Instead, the digital watermark is obtained by direct manipulation of the circuit description. We present evidence that no known algorithms for circuit manipulation can be used to efficiently remove or change the watermark and that the process is immune to a variety of other attacks. We present both theoretical and experimental results that show that the watermarking can be created and verified efficiently. We also test possible attack strategies and verify that they are inapplicable to realistic designs of medium to large complexity.