A method and system of detecting colluders conducting a collusion attack including a minority-type collusion attack on a digital product includes the generation of codewords used as watermarks in the digital product. The inner code of the codewords is generated using permutations of rows in a Hadamard matrix and concatenating them together. A typical outer code of the codeword is the Reed Solomon code. An adaptive detector is able to accurately detect one of three or more colluders of a minority-type attack. Prior art schemes using an error correcting code-based watermarking mechanism with an inner code fail to detect colluders with a minority-type collusion attack which includes three colluders.