Digital watermarking is the process of embedding information into a digital signal which may be used to verify its authenticity or the identity of its owners. It is a technique to embed identification codes called watermarks, into cover media or host media. Watermarking is used for data integrity, protection of intellectual property, and data authentication. Watermarking does not restrict access to the data while encryption has the aim of making messages unintelligible to any unauthorized persons who might intercept them. Once encrypted data is decrypted, the media is no longer protected. A watermark is designed to permanently reside in the host data. If the ownership of a digital work is in question, the information can be extracted to completely develop an Authentication system to be used in telemedicines. In this paper the aim is to implement the watermarking techniques in spatial and frequency domain in telemedicines and then obtaining lossless image back for its analysis. The extracted image which is obtained should have a high peak signal to noise ratio (PSNR) or else it's discarded. At the receiver end the patient digest is cross verified to obtain back the watermarked medical image for further analysis. Results of the computer simulations are provided to observe the analysis in this proposed algorithm. © 2012 IEEE.