Minnesota Awards Digimarc New Secure Driver License Contract; New, Secure Design and Issuance Process to Thwart Counterfeiting and Fraud

Business Wire, Dec 8, 2004

BEAVERTON, Ore. -- Digimarc Corporation (NASDAQ:DMRCE) today announced that the Minnesota Department of Public Safety has awarded Digimarc a new, five-year driver license contract at an estimated value of $10.3 million, with an option to renew for another five-year period. This will usher in the next generation in ID security for the State of Minnesota, which is one of 32 U.S. states and several foreign countries that rely upon Digimarc's innovation and leadership for secure driver license design and issuance.

At a press conference in St. Paul today, Governor Tim Pawlenty unveiled the new design and state-of-the art security measures for the Minnesota driver license, saying, "These new cards make Minnesota a national leader in the area of identity protection."

Digimarc will be responsible for providing Minnesota with a new, enhanced card design that will include advanced, interlocking security features designed to thwart duplication or alteration of the State's cards. Minnesota will also become the 11th state in the U.S. to adopt Digimarc(R) IDMarc(TM) covert digital watermarking security features as a means to verify the authenticity of driver licenses at point of inspection. In addition, the new license will incorporate a new, custom security laminate and other new Digimarc design features that will make it extremely difficult to counterfeit or alter the cards without obvious detection.

The new licenses will be issued from one of Digimarc's high-security, central production facilities, offering a centralized control over materials and the secure issuance process. The State's new cards will be issued to residents of Minnesota beginning in mid-December.

"Providing the residents of Minnesota with a very advanced and secure driver license underscores our commitment to reducing identity theft and fraud and fighting counterfeiting," said Michael Campion, Commissioner of Public Safety. "We look forward to rolling out a new, high-security Minnesota license later this month."

"Minnesota's award of its driver license contract to Digimarc demonstrates the State's commitment to providing its citizens with the highest quality, most secure driver license system available," said Paul Gifford, president and COO, Digimarc. "We are extremely pleased that we were chosen by Minnesota to continue our service to the State. We look forward to fulfilling the Governor's pledge to upgrade Minnesota's system with a more advanced, secure card that uses the very best card production and issuance system in the industry."

"This contract marks the beginning of a new enhanced driver license system that will offer better security and ease of use for our citizens and operators," said Patricia McCormack, Director, Division of Driver and Vehicle Services, Minnesota Department of Public Safety.

About Digimarc

Digimarc Corporation (NASDAQ:DMRCE), based in Beaverton, Oregon, is a leading supplier of secure media solutions used in a wide range of security, identification and digital media content applications. Digimarc provides products and services that enable production of more than 60 million personal identification documents and driver licenses per year in 32 U.S. states and the District of Columbia and more than 20 countries. Digimarc's digital watermarking technology provides a persistent digital identity for various media content and is used to enhance the security of financial documents, identity documents and digital images, and support other media rights management applications.

Digimarc has an extensive intellectual property portfolio, with 183 issued U.S. patents with more than 3,000 claims, and more than 350 pending patent applications in digital watermarking, personal identification and related technologies.

The company is headquartered in Beaverton, Oregon, with other U.S. offices in Burlington, Massachusetts; Fort Wayne, Indiana; San Francisco, California; and the Washington, D.C. area; and European offices in London. Please go to www.digimarc.com for more company information.

Securities Safe Harbor

With the exception of historical information contained in this release, the matters described herein contain certain "forward-looking statements" that are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current reasonable expectations and are subject to certain assumptions, risks, uncertainties and changes in circumstances. Actual results may vary materially from those expressed or implied from the statements herein or from historical results, due to changes in economic, business, competitive, technological and/or regulatory factors. More detailed information about these factors is set forth in filings by Digimarc with the Securities and Exchange Commission, including the most recent annual report on Form 10-K and the most recent quarterly report on Form 10-Q. Digimarc is not obligated to (and expressly disclaims any obligation to) revise or update any forward-looking statements in order to reflect events or circumstances, whether they arise as a result of new information, future events, or otherwise.