A watermarking system comprises an encoding data processor operable to generate at least one marked version of an original item of material by introducing one of a predetermined set of code words into a copy of the original material item. The encoding data processor is arranged to form other code words of the set by cyclically shifting a first code word. The system includes a detecting data processor operable to identify the code word in the marked material item. The detecting data processor is operable to recover the code word from the marked material item and to form a Fourier transform of the recovered code word and a Fourier transform of the first code word of the set. The data detecting processor forms correlation samples by forming an inverse transform of a combination of the recovered and the first code word. Each of the correlation value samples provides the correlation value for one of the set of code words. A computationally efficient way of calculating the correlation for each code word in the set is thereby provided. As a result a time taken to detect a code word present in a marked material item is improved. The watermarking system finds particular application in identifying a point of distribution of pirate copies of video material generated by capturing the watermarked image, using, for example, a camcorder in a cinema.