A system and method of generating a watermarked signal are disclosed. The system segments the signal into overlapping blocks using a window function and processes the overlapping blocks according to whether each block is odd- or even-numbered. The system windows the odd-numbered blocks, modulates the phase of each block in the frequency domain, transforms each modulated block in the time domain, windows each block transformed into the time domain and overlap-adds each odd-numbered block with each even-numbered block to generate the watermarked signal.