Digimarc Innovations in Driver License Security Help Iowa Deter Counterfeiting, Terrorism and Fraud; New Secure Driver License System Positions Iowa to Tackle REAL ID Compliance

Business Wire, April 4, 2006

BEAVERTON, Ore. -- Digimarc Corporation (Nasdaq:DMRC) today announced the Iowa Department of Transportation (DOT), a long-time Digimarc customer, has successfully completed implementation of a new and highly secure digital driver license system designed to deter counterfeiting and identity theft, curb underage drinking and enhance Homeland Security.

"Iowa's new digital driver license system is built on a number of new technologies, features and processes that will help us meet our goals of improving traffic safety and curtailing criminal activity related to the use of fraudulent identification," said Shirley Andre, Director of the Iowa DOT's Motor Vehicle Division. "We are pleased to have worked closely with Digimarc to implement this advanced system in a timely manner and begin preparing Iowa for addressing REAL ID compliance."

As part of the new system, Iowa recently introduced a newly designed digital driver license loaded with advanced innovations in ID security, including Digimarc IDMarc(TM) and Digimarc ExianDual(TM) card architecture for instant issuance environments.

IDMarc is a digital watermarking-based, machine-readable security feature embedded and authenticated on identity documents. IDMarc transforms passive elements of a document into a covert interlocking security feature. Nearly 40% of U.S. driver licenses produced in 2006 are expected to be protected with IDMarc digital watermarks.

ExianDual is Digimarc's instant issuance card offering designed specifically to increase driver license security and durability for States that require instant issuance. Additionally, Iowa's ExianDual card material is embedded with inventory control numbers for enhanced security and card accountability from manufacture to issuance.

"With the adoption of the industry's key technological innovations in card security for over-the-counter issuance environments and machine-readable, digital watermark security for cross-jurisdictional driver license authentication, Iowa is demonstrating its leadership in secure driver license issuance," said Robert Eckel, president, government programs, Digimarc Corporation. "We look forward to continuing our close partnership with the Iowa DOT as they look ahead to the needs of the REAL ID Act."

Iowa's new system includes upgrades in hardware, software, camera equipment, and a modular-component architecture supporting 123 issuing locations around the State. The system also enables the DOT's new "photo anywhere" workflow scheduled for rollout this spring -- a smart process that gives issuers the flexibility to capture a person's portrait anytime during the application process and use that portrait to verify identity before a valid driver license is issued. Identity verification is an important component of REAL ID compliance.

About Digimarc

Digimarc Corporation (Nasdaq:DMRC), based in Beaverton, Oregon, is a leading supplier of secure identity and media management solutions. Digimarc provides products and services that enable the production of more than 60 million personal-identification documents, including two-thirds of U.S. driver licenses and IDs for 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 more than 230 issued U.S. patents with more than 5,000 claims, and more than 400 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; and the Washington, DC, area; and international offices in London and Mexico. Please go to www.digimarc.com for more company information.

Additional Information

-- http://www.digimarc.com/watermark/idmarc/
   More information on Digimarc IDMarc digital watermarking

-- http://www.digimarc.com/secureid/production/cards_architectures.asp
   Descriptions of Digimarc card architectures, including ExianDual
   and ExianEvident 3D

-- http://www.digimarc.com/about/real_id.asp
   Information on the REAL ID Act of 2005 and its impact on driver
   license issuers in the United States

-- http://www.digimarc.com/watermark/about/
   More information on digital watermarking technologies like IDMarc

-- http://www.digimarc.com/patent/watermarking_applications.asp
   Additional applications of digital watermarking

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. Such forward-looking statements include statements regarding the expected benefits of the new driver license system in Iowa, including the facilitation of compliance with the REAL ID Act, as well as statements containing the words "believes," "expects," "estimates," "anticipates," "will" or words of similar import or statements of management's opinion. These statements 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 risk factors that may affect actual results is set forth in filings by Digimarc with the Securities and Exchange Commission on Forms 10-K, 10-Q and 8-K, including, but not limited to, those described in the Company's Form 10-K for the year ended December 31, 2005, in Part II, Item 7 thereof ("Management's Discussion and Analysis of Financial Condition and Results of Operations") under the captions "Liquidity and Capital Resources" and "Factors Affecting Forward Looking Statements" and in Part II, Item 9A thereof ("Controls and Procedures"). Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date of this release. Except as required by law, we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements.