We report results of theoretical modeling into a scatterometry-based method relevant to overlay measurement. A set of two array targets were designed with intentional offsets difference, d and d+20 nm, between the top and bottom grid arrays along the X and Y directions. The correlation of bi-azimuth measurements is the first critical issue been taken into account. The method linearizes the differential values of scatterometry signatures at the first diffraction order with respect to designed offsets, and hence permits determination of overlay using a classical linear method. By evaluating the process variations (eg. CD, roundness and thickness) on overlay measurement error, a set of two overlay target design were optimized to minimize the correlation of bi-azimuth measurements and maximize the measurement sensitivity.