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In this paper we present a spatial-domain watermarking scheme for data hiding and copyright protection of still images and analyze the effect that the application of channel coding has on the performance of the watermark detection and decoding tests. Detector structures are derived for both tests and analytical bounds and approximations are obtained for the bit error rate (BER) and the receiver operating characteristic (ROC) associated with the watermark decoding and detection tests when block codes are employed. Finally, the analytical expressions are contrasted with experimental results in several cases of interest.