Guang Yang, Amir Ghasemian, Fengchen Liu et al.
Detecting unauthorized knowledge distillation from a deployed LLM API is hard because the defender controls neither the attacker's training pipeline nor the next-token logits. Existing defenses operate on the teacher's output tokens -- biasing the next-token distribution (green-list watermarks, cryptographic schemes, antidistillation sampling) or rewriting outputs after generation. Recent work shows a paraphrasing attacker can strip these signals without losing the underlying knowledge. We propose interaction-layer antidistillation watermarks, which move the trace one layer higher, into the teacher's interaction behavior: the defender wraps the teacher with a system prompt that intermittently induces a behavioral marker -- an explicit follow-up question, a low-frequency variant, or a declarative restatement. An oblivious distiller inherits the behavior, and the defender audits via black-box queries with a human-validated LLM-as-judge (Cohen's kappa = 0.84/0.78 on strong/style rubrics). Across 63 LoRA-distilled students under a Llama-3.3-70B-Instruct teacher (35,343 judged samples), behavioral watermarks transfer at 88.9% (Gemma) / 80.9% (OLMo) / 45.2% (Qwen) relative fidelity (H1, H2). Under non-adaptive DIPPER paraphrasing, robustness decomposes into a teacher-self ceiling (about 66.4%) and student-relative retention of 21-112%, with OLMo preserving the watermark above the teacher itself (H3, F-Amp). Low-density (about 20%) explicit and implicit declarative variants transfer above per-family baseline (H4, F-Style). An N=20 in-lab study (pre-registered Latin-square) shows all marker variants within 0.22 Likert step of baseline; TOST, Friedman, and Bonferroni-Wilcoxon support H5. The interaction layer is a viable design locus for antidistillation watermarking, complementary to token-, model-, and reasoning-trace-layer defenses.