We can protect our word documents with password and also add the watermarks to them to keep the word documents confidential. With using Free Spire.Doc and only several lines of codes, we can fulfill the requirements easily.
Introduction
My recent project needs to avoid our word
documents to be used by other readers. Then we choose to protect the word
documents with password and also add the watermarks to them to keep the word
documents confidential. We intend to finish the job by ourselves and it is so
complex and it may take us lots of time to fulfill it. Finally we searched out
Free Spire.Doc and with only several lines of codes and we can fulfill
our requirements easily. This project will show you clearly how to
protect the word documents with password and add text watermark and picture watermark
to the word document.
Main codes:
Spire.Doc offers a method of Document.Encrypt() to enable
developers to encrypt the word documents with password. We can easily call
Spire.Doc to use the class of Spire.Doc.PictureWatermark
and Spire.Doc.TextWatermark to add
the picture watermark and text watermark to protect the word documents to be
used by others.
How
to get it?
This free word component is listed on the Nuget, you can get the
Free Spire.Doc.dll directly from there and add it as the reference for your
project. Firstly, review the original documents:

Code
Snippets of how to protect the document and add the watermarks to it.
Step 1: Create a new word document and load the document from file.
Document document = new Document();
document.LoadFromFile("sample.docx");
Step 2: Add the text watermark to the word document
TextWatermark txtWatermark = new TextWatermark();
txtWatermark.Text = "Confidential";
txtWatermark.FontSize = 90;
txtWatermark.Layout = WatermarkLayout.Diagonal;
document.Watermark = txtWatermark;
Step 3:
Encrypt the word document with password
document.Encrypt("12345");
Step 4:
Save the document to file:
document.SaveToFile("Result.docx", FileFormat.Docx);
Effective
screenshot of the word document with password and text watermark:
After
input the password, we will get this word document with text watermark:

The code snippet of how to add the picture
watermark:
PictureWatermark picture = new PictureWatermark();
picture.Picture = System.Drawing.Image.FromFile("logo.png");
picture.Scaling = 200;
document.Watermark = picture;
Effective result of the picture watermark:

Then our word document has been protected
by both password and the watermark. We are pretty happy with Free Spire.Doc,
the API was designed very well. It is intuitive to use and it easily does
exactly what we need.
PS: Word document only accept one kind of
watermark once a time, either text watermark or picture watermark. We only use
one kind of watermark for one same word document.
Full codes:
static void Main(string[] args)
{
Document document = new Document();
document.LoadFromFile("sample.docx");
PictureWatermark picture = new PictureWatermark();
picture.Picture = System.Drawing.Image.FromFile("logo.png");
picture.Scaling = 300;
document.Watermark = picture;
//TextWatermark txtWatermark = new TextWatermark();
//txtWatermark.Text = "Confidential";
//txtWatermark.FontSize = 90;
//txtWatermark.Layout = WatermarkLayout.Diagonal;
//document.Watermark = txtWatermark;
document.Encrypt("12345");
document.SaveToFile("Result.docx", FileFormat.Docx);
}