Today another "urban legend", thought to be a wacko conspiracy theory with no basis in fact, proved to be true after all. Many brands of color printers do include information on every document to trace that document back to you.
The Electronic Frontier Foundation (EFF) has cracked the code on at least one line of printers, and is working on cracking the codes on others. (See stories: Washington Post - Red Herring). Industry leaders and government officials have now confirmed that they have been working together on the coding for years.
The official purpose of the coding is to prevent counterfeiting. By being able to trace a counterfeit bill back to a particular printer at a particular time, law enforcement can find out who is making their own money at home.
A couple of problems arise, however.
1) There's nothing to prevent government/law enforcement from using the codes to track other printing, such as protected anonymous speech. Those living under repressive regimes (here and elsewhere) can have their self-published works tracked back to their door. This is a high-tech, and more effective implementation, of how the Soviet Union used to track down dissidents by their typewriter imprints. The hidden data, placed there without the users knowledge, is a potentially dangerous invasion of privacy.
2) EFF reports that the codes were very easy to crack. There's nothing to prevent individuals with the proper knowledge and tools from cracking the codes and using them in order to commit crimes against others. This supposed "law enforcement tool" can easily be turned against us by criminals and terrorists looking to harm those they want to target.
The further we get from 1984, the closer we get to 1984.