I've been watermarking all my new images for 18-24 months now, I haven't bothered doing all my older ones since they've been copied and scraped so many times. I remember leosghost telling me in the early 2000s to watermark them however I wasn't concerned since I ranked #1 for them all and because I was the original I naturally assumed that Google would always assign them that way...but oh no, G's got its knickers in such a twist this past 3-4 years, and especially so since Panda, I'm not taking anything for granted any more.
hopefully see a solution via a script to prevent that google can hotlink the images.
There will be those around here who will remember me screaming every day about one image alone being searched for and hotlinked 30,000 times a day! I eventually found the correct coding for htaccess and have not had a problem with hotlinking since.
I mentioned a couple of days ago that my main CMS image gallery is not having the larger images shown in the results, only the 400 x 300, which is fine by me since from this weekend I shall upload new large images to the server and then download the 400 x 300 and watermark them with something like "Low Resolution Image, Click To See Larger" and then that notice will be seen in the image SERPs and should encourage people to visit my site since they will then know something better is there...maybe:-)
Incidentally for WordPress users there is a great protection script already out there disabling not only hotlinking but also text copying and pasting!