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I seem to recall an anecdote on how one branch of the British government had designed a way to circulate seemingly identical for-your-eyes-only documents to a small circle of high-level collaborators, while ensuring the possibility to identify them if the document leaked. The story was that they used tiny variations in typography to make differentiable documents that seemed identical to the naked eye.

So, my question is: Is that feasible? Does that involve modification of font outlines, or kerning, or something else? Is that done in the font itself, or in the typographic engine?

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If I were to develop something as you describe that can survive xeroxing, it would HAVE to be related to measurable metrics and letterforms that can survive scaling and translation. If it were me, I would probably have something that uniquely transforms individual letterforms using a unique id as a random seed. Whatever is done would also need to survive redacting and excerpting... –  horatio Oct 31 '12 at 17:13
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Yes, there are methods to do this. It's not used with the typography though (speaking in general). It's related to steganography and the common method is to use yellow ink to print a pattern of dots which can be recognized as a serial number or other ID depending on purpose.

It is printed in a small size typically close to an edge. As yellow is hard to read for the human eye on white paper, this is rarely discovered. To detect it blue light is used together with scanning.

This is not only used by government, but is common in consumer printers from manufacturers such as Brother, Canon, Dell, Epson, HP, IBM, Konica Minolta, Kyocera, Lanier, Lexmark, Ricoh, Toshiba and Xerox (2).

Some links:
1) http://ezinearticles.com/?Secret-Spy-World-Of-Inkjet-Printer-Tracking!&id=6397632
2) https://en.wikipedia.org/wiki/Printer_steganography

Update:

I choose to put my comment here as part of the answer even though if will be of speculative nature as the actual facts are not available to the public.

As for other techniques related to intelligence/security services I would assume that this information would still be classified (details of the techniques). We can only speculate.

Too small variations (ie. small "artifacts" in the glyphs) would be lost due to quality loss in the copy process, so it need to be related to geometry and the relationship between the glyphs, ie. spacing, difference in heights, line-heights, use of different words at different locations etc. Perhaps a checksum/acid-test mechanism to handle small errors. I'm just trowing out possible scenarios here.

If it is to a small group you wouldn't need more than a few chars to encode this sort of information (ID). And it's not so difficult to write a software that implement this.

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Thanks, yeah, I definitely know about that… The story I am referring to definitely was about a typographic method, and the needs for it was justified by the fact that the document is still identifiable after B&W photocopying, e.g. –  F'x Oct 30 '12 at 20:37
    
I would assume that information would still be classified (details of the techniques). We can only speculate. Too small variations would be lost due to quality loss in the copy process, so it need to be related to geometry and the relationship between the glyphs, ie. spacing, difference in heights, line-heights, use of different words at different locations etc. If it is to a small group you wouldn't need more than a few chars to encode this sort of information. It's not so difficult to write a software that implement this. –  Ken Oct 30 '12 at 21:24
    
@AbdiasSoftware I saw your flag, but am not sure what you are asking for. If you'd like to delete your answer, use the delete link at the bottom of it. –  Farray Nov 1 '12 at 5:33
    
@Farray ? I must have hit some button unaware of it. My apologies (the pad on this mini laptop is all over sometimes - not my favorite). –  Ken Nov 1 '12 at 6:41
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