# On Protecting Agentic Systems' Intellectual Property via Watermarking

arXiv: https://arxiv.org/abs/2602.08401 · HTML: https://mlsanity.com/paper/2602.08401/

## Key facts

- Cited by 8 papers in the map (data through 14 Oct 2026).
- Placed in Agent threats, guardrails and governance, one of 16 directions in LLM agents and tool use.
- Builds on 54 of its 73 references that are in the map.
- First posted on arXiv 9 Feb 2026.

## Placed in

- LLM agents and tool use / [Agent threats, guardrails and governance](https://mlsanity.com/agents/agent-threats-guardrails-and-governance/)
- LLM safety and security / [Watermarking generated content and models](https://mlsanity.com/safety/watermarking-generated-content-and-models/)

## Builds on (most cited first, 30 of 54)

- [Language Models are Few-Shot Learners](https://mlsanity.com/paper/2005.14165/) (2020)
- [Training language models to follow instructions with human feedback](https://mlsanity.com/paper/2203.02155/) (2022)
- [Proximal Policy Optimization Algorithms](https://mlsanity.com/paper/1707.06347/) (2017)
- [LoRA: Low-Rank Adaptation of Large Language Models](https://mlsanity.com/paper/2106.09685/) (2021)
- [Qwen3 Technical Report](https://mlsanity.com/paper/2505.09388/) (2025)
- [ReAct: Synergizing Reasoning and Acting in Language Models](https://mlsanity.com/paper/2210.03629/) (2022)
- [Explaining and Harnessing Adversarial Examples](https://mlsanity.com/paper/1412.6572/) (2014)
- [Think you have Solved Question Answering? Try ARC, the AI2 Reasoning Challenge](https://mlsanity.com/paper/1803.05457/) (2018)
- [Universal and Transferable Adversarial Attacks on Aligned Language Models](https://mlsanity.com/paper/2307.15043/) (2023)
- [Scaling Instruction-Finetuned Language Models](https://mlsanity.com/paper/2210.11416/) (2022)
- [A Survey on Large Language Model based Autonomous Agents](https://mlsanity.com/paper/2308.11432/) (2023)
- [Extracting Training Data from Large Language Models](https://mlsanity.com/paper/2012.07805/) (2020)
- [ToolLLM: Facilitating Large Language Models to Master 16000+ Real-world APIs](https://mlsanity.com/paper/2307.16789/) (2023)
- [The Rise and Potential of Large Language Model Based Agents: A Survey](https://mlsanity.com/paper/2309.07864/) (2023)
- [τ-bench: A Benchmark for Tool-Agent-User Interaction in Real-World Domains](https://mlsanity.com/paper/2406.12045/) (2024)
- [LIMA: Less Is More for Alignment](https://mlsanity.com/paper/2305.11206/) (2023)
- [DeepSeek-V3.2: Pushing the Frontier of Open Large Language Models](https://mlsanity.com/paper/2512.02556/) (2025)
- [Extracting Training Data from Diffusion Models](https://mlsanity.com/paper/2301.13188/) (2023)
- [A Watermark for Large Language Models](https://mlsanity.com/paper/2301.10226/) (2023)
- [LIMO: Less is More for Reasoning](https://mlsanity.com/paper/2502.03387/) (2025)
- [Detecting Language Model Attacks with Perplexity](https://mlsanity.com/paper/2308.14132/) (2023)
- [AgentBoard: An Analytical Evaluation Board of Multi-turn LLM Agents](https://mlsanity.com/paper/2401.13178/) (2024)
- [Agent-as-a-Judge: Evaluate Agents with Agents](https://mlsanity.com/paper/2410.10934/) (2024)
- [Jailbreak Attacks and Defenses Against Large Language Models: A Survey](https://mlsanity.com/paper/2407.04295/) (2024)
- [Data Interpreter: An LLM Agent For Data Science](https://mlsanity.com/paper/2402.18679/) (2024)
- [APIGen: Automated Pipeline for Generating Verifiable and Diverse Function-Calling Datasets](https://mlsanity.com/paper/2406.18518/) (2024)
- [Stealing Part of a Production Language Model](https://mlsanity.com/paper/2403.06634/) (2024)
- [Tree Search for Language Model Agents](https://mlsanity.com/paper/2407.01476/) (2024)
- [A Semantic Invariant Robust Watermark for Large Language Models](https://mlsanity.com/paper/2310.06356/) (2023)
- [Large Language Models as Urban Residents: An LLM Agent Framework for Personal Mobility Generation](https://mlsanity.com/paper/2402.14744/) (2024)

## Built on by (most cited first, 8 of 8)

- [MemMark: State-Evolution Attribution Watermarking for Agent Long-Term Memory Systems](https://mlsanity.com/paper/2605.25002/) (2026)
- [Sequential Behavioral Watermarking for LLM Agents](https://mlsanity.com/paper/2605.11036/) (2026)
- [TRACE: A Two-Channel Robust Attribution Watermark via Complementary Embeddings for LLM-Agent Trajectories](https://mlsanity.com/paper/2607.08400/) (2026)
- [RedAct: Redacting Agent Capability Traces for Procedural Skill Protection](https://mlsanity.com/paper/2606.10813/) (2026)
- [AgentProv: Auditing Agentic LLM API Providers via Tool-use Policy Probes](https://mlsanity.com/paper/2609.00052/) (2026)
- [TrajMark: Ownership Attribution and Segment-Level Tamper Localization for Coding-Agent Trajectories](https://mlsanity.com/paper/2609.10416/) (2026)
- [Who Is Behind the Harness? Fingerprinting LLMs through Agentic Behavior](https://mlsanity.com/paper/2609.28559/) (2026)
- [Semantic Behavioral Watermarking: Paraphrase-Robust and Forgery-Resistant Provenance for LLM Agents](https://mlsanity.com/paper/2610.08668/) (2026)

## Abstract (arXiv)

The evolution of Large Language Models (LLMs) into agentic systems that perform autonomous reasoning and tool use has created significant intellectual property (IP) value. We demonstrate that these systems are highly vulnerable to imitation attacks, where adversaries steal proprietary capabilities by training imitation models on victim outputs. Crucially, existing LLM watermarking techniques fail in this domain because real-world agentic systems often operate as grey boxes, concealing the internal reasoning traces required for verification. This paper presents AGENTWM, the first watermarking framework designed specifically for agentic models. AGENTWM exploits the semantic equivalence of action sequences, injecting watermarks by subtly biasing the distribution of functionally identical tool execution paths. This mechanism allows AGENTWM to embed verifiable signals directly into the visible action trajectory while remaining indistinguishable to users. We develop an automated pipeline to generate robust watermark schemes and a rigorous statistical hypothesis testing procedure for verification. Extensive evaluations across three complex domains demonstrate that AGENTWM achieves high detection accuracy with negligible impact on agent performance. Our results confirm that AGENTWM effectively protects agentic IP against adaptive adversaries, who cannot remove the watermarks without severely degrading the stolen model's utility.