Training machine learning (ML) models is expensive in terms of computational power, amounts of labeled data and human expertise. Thus, ML models constitute intellectual property (IP) and business value for their owners. Embedding digital watermarks during model training allows a model owner to later identify their models in case of theft or misuse. However, model functionality can also be stolen via model extraction, where an adversary trains a surrogate model using results returned from a prediction API of the original model. Recent work has shown that model extraction is a realistic threat. Existing watermarking schemes are ineffective against IP theft via model extraction since it is the adversary who trains the surrogate model. In this paper, we introduce DAWN (Dynamic Adversarial Watermarking of Neural Networks), the first approach to use watermarking to deter model extraction IP theft. Unlike prior watermarking schemes, DAWN does not impose changes to the training process but it operates at the prediction API of the protected model, by dynamically changing the responses for a small subset of queries (e.g., <0.5%) from API clients. This set is a watermark that will be embedded in case a client uses its queries to train a surrogate model. We show that DAWN is resilient against two state-of-the-art model extraction attacks, effectively watermarking all extracted surrogate models, allowing model owners to reliably demonstrate ownership (with confidence $>1- 2^{-64}$), incurring negligible loss of prediction accuracy (0.03-0.5%).
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