>>7Consider a software distributed to N different users with each distribution having N*N bits watermark, where each user's distribution shares N bits with other N-1 users. In such situation malicious users A and B can't detect watermark by comparing their distributions, because such comparison won't show the bits they share and won't expose other bits, allowing identifying the leaker uniquely. You can easily show that if n users can't detect watermark, then n+1 users also cannot.