Louisiana Awards Digimarc $7 Million Contract Extension; Digimarc, Which Helped the Agency and Citizens Affected by Last Year's Hurricane Katrina with New Identification Needs, Earns Ongoing Business

Business Wire, August 29, 2006

BEAVERTON, Ore. -- Digimarc Corporation (NASDAQ:DMRC) today announced the Louisiana Office of Motor Vehicles (OMV), a Digimarc customer for five years, has awarded Digimarc a two-year contract extension valued at nearly $7 million for driver license issuance and vehicle registration.

The Louisiana OMV has had to deal with extraordinary circumstances over the past year -- from thousands of citizens being displaced and left without identification to branch offices being destroyed or damaged and employees having to re-build their personal and professional lives. Working together with the OMV in the aftermath of the disaster, Digimarc set up temporary issuance locations within Louisiana, and other States offering shelter to displaced citizens, including Texas and Massachusetts. The Company helped these States securely issue the identity documents citizens needed to get jobs and access social services.

"The Louisiana OMV has faced extreme and unexpected challenges this past year, and as our trusted solution provider, Digimarc was always there for us with responsive service," said Kay Hodges, Commissioner, Louisiana Office of Motor Vehicles. "We look forward to continuing our close working relationship with Digimarc and drawing on their expertise as we look ahead to serving the future needs of our citizens."

"Together, Louisiana and Digimarc have deployed and operated a world-class solution and tackled key issues following Hurricane Katrina -- from getting mission-critical driver license issuance systems back in operation, to quickly meeting the photo identification and vehicle registration needs of the State's citizenry, especially those who were displaced or evacuated after the disaster," said Bob Eckel, president, Digimarc government programs. "We are proud of what we accomplished together, and are pleased that Louisiana has chosen to place its trust in Digimarc again."

In May 2006, GovTech recognized Digimarc for its efforts to support motor vehicle agencies and citizens impacted by the hurricane with their Best Solution award. For more information about how Digimarc and Louisiana tackled the challenges of providing identification and driver licenses after the disaster, visit http://www.govtech.net/gtc/index.php/GTCWest2006/BestSolutions#5

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 annual 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 275 issued U.S. patents with more than 5,000 claims, and more than 500 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.

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 value of the two-year contract extension with Louisiana OMV and the expected benefits of the extension, as well as other 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-Q for the quarter ended June 30, 2006, in Part I, Item 2 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 I, Item 4 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.