A circuit element is disclosed which restricts reproduction of an illegally duplicated recording medium and prevents illegal duplication of a recording medium. The circuit element is incorporated in a data reproduction apparatus or a data recording apparatus and includes an encryption discrimination section for discriminating whether or not data recorded on a recording medium is encrypted data, a digital watermark status detection section for detecting digital watermark status from within the data read from the recording medium, a determination section for determining, if it is discriminated that the data recorded on the recording medium is encrypted data, that the read data should not be filtered, but determining, if it is discriminated that the data recorded on the recording medium is not encrypted data, whether or not the read data should be filtered based on the digital watermark status, and a filter processing section for filtering part of the read data based on a result of the determination by the determination section.