Protecting Language Models Against Unauthorized Distillation through Trace Rewriting

Fuente: arXiv
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Hauptverfasser: Ma, Xinhang, Yeoh, William, Zhang, Ning, Vorobeychik, Yevgeniy
Format: Preprint
Veröffentlicht: 2026
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author Ma, Xinhang
Yeoh, William
Zhang, Ning
Vorobeychik, Yevgeniy
author_facet Ma, Xinhang
Yeoh, William
Zhang, Ning
Vorobeychik, Yevgeniy
contents Knowledge distillation is a widely adopted technique for transferring capabilities from LLMs to smaller, more efficient student models. However, unauthorized use of knowledge distillation takes unfair advantage of the considerable effort and cost put into developing frontier models. We investigate methods for modifying teacher-generated reasoning traces to achieve two objectives that deter unauthorized distillation: (1) \emph{anti-distillation}, or degrading the training usefulness of query responses, and (2) \emph{API watermarking}, which embeds verifiable signatures in student models. We introduce several approaches for dynamically rewriting a teacher's reasoning outputs while preserving answer correctness and semantic coherence. Two of these leverage the rewriting capabilities of LLMs, while others use gradient-based techniques. Our experiments show that a simple instruction-based rewriting approach achieves a strong anti-distillation effect while maintaining or even improving teacher performance. Furthermore, we show that our rewriting approach also enables embedding watermarks that can be reliably detected with essentially no false alarms. Our code is available at https://github.com/xhOwenMa/trace-rewriting.
format Preprint
id arxiv_https___arxiv_org_abs_2602_15143
institution arXiv
publishDate 2026
record_format arxiv
spellingShingle Protecting Language Models Against Unauthorized Distillation through Trace Rewriting
Ma, Xinhang
Yeoh, William
Zhang, Ning
Vorobeychik, Yevgeniy
Artificial Intelligence
Computation and Language
Knowledge distillation is a widely adopted technique for transferring capabilities from LLMs to smaller, more efficient student models. However, unauthorized use of knowledge distillation takes unfair advantage of the considerable effort and cost put into developing frontier models. We investigate methods for modifying teacher-generated reasoning traces to achieve two objectives that deter unauthorized distillation: (1) \emph{anti-distillation}, or degrading the training usefulness of query responses, and (2) \emph{API watermarking}, which embeds verifiable signatures in student models. We introduce several approaches for dynamically rewriting a teacher's reasoning outputs while preserving answer correctness and semantic coherence. Two of these leverage the rewriting capabilities of LLMs, while others use gradient-based techniques. Our experiments show that a simple instruction-based rewriting approach achieves a strong anti-distillation effect while maintaining or even improving teacher performance. Furthermore, we show that our rewriting approach also enables embedding watermarks that can be reliably detected with essentially no false alarms. Our code is available at https://github.com/xhOwenMa/trace-rewriting.
title Protecting Language Models Against Unauthorized Distillation through Trace Rewriting
topic Artificial Intelligence
Computation and Language
url https://arxiv.org/abs/2602.15143