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A data capacity estimation method is proposed for image watermarking. The data capacity is maximum number of bits that can be embedded in an image such that the image has no perceptual loss. It is assumed that the input is a JPEG2000 image file and after watermark embedding, the image is JPEG2000-compressed using the same quantization factors. This is called JPEG2000-to-JPEG2000 (J2K2J2K) watermarking. A human visual systems (HVS) model is used to estimate the just noticeable difference (JND) of each discrete wavelet transform (DWT) coefficients.