Digimarc Digital Watermarking to be Used to Protect Satellite Images on Internet; Microsoft to Use Digimarc Digital Watermarking to Communicate Copyright Information of Tens of Millions of Images Served up by Microsoft Virtual Earth

Business Wire, May 2, 2006

BEAVERTON, Ore. -- Digimarc Corporation (NASDAQ:DMRC) today announced that Microsoft's Virtual Earth business unit has signed a multi-year deal to use Digimarc's ImageBridge(TM) digital watermarking software. Under the deal, Microsoft will embed Digimarc digital watermarks into tens of millions of satellite images served up by its Virtual Earth platform offering as a means to communicate and protect image copyrights.

Microsoft's Virtual Earth platform powers a variety of consumer, enterprise and government applications that enable people to discover, learn about, and explore specific locations using traditional vector maps as well as maps overlaid upon satellite and aerial images. In light of the value of such services, scarcity of source material, and intense competition, the ability to identify and protect valuable copyrighted image assets is increasingly important to providers of satellite and aerial imagery.

"This agreement is consistent with trends across various media industries toward use of digital watermarking to communicate and protect copyrighted media assets as well as to enhance consumer experiences. We are pleased to be supporting a market leader like Microsoft to help enhance the value of their exciting Virtual Earth offering," said Stuart Rosove, senior director of business development, Digimarc Corporation.

"Microsoft takes the protection of intellectual property and copyrighted materials very seriously. Protecting and communicating the copyrights for the satellite and aerial images used in the Virtual Earth platform is essential to our business," said Stephen Lawler, general manager of the Virtual Earth Business Unit. "We chose Digimarc because their ImageBridge digital watermarking has the depth and breadth of capabilities we need to communicate the copyrights of our valuable image assets."

Digimarc ImageBridge digital watermarking weaves a unique and imperceptible identifier into images that enables communication of copyright ownership, while the sophisticated ImageBridge tracking system monitors the Internet and specified URLs, locating digitally watermarked images and delivering reports to brand owners. This ensures that image users or licensees are acting in compliance with guidelines, and allows legal departments to effectively communicate and enforce image copyrights.

Users of Microsoft Virtual Earth platform will be able to check for copyright information or connect to additional opportunities through a Digimarc-enabled image by reading the digital watermark carried by the image. Digimarc digital watermarks can be read through the digital watermark reader plug-in found in many popular image editing applications, including Adobe Photoshop, or through Digimarc's free Reader software, which can be downloaded at http://www.digimarc.com/watermark/download/download.asp

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 240 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.

Additional Information

    --  http://www.digimarc.com/watermark/imagebridge/
        More information on Digimarc ImageBridge

    --  http://www.digimarc.com/watermark/download/download.asp
        Download the Digimarc ImageBridge reader

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

    --  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 relating to the performance and benefits of Digimarc's ImageBridge digital watermarking software and 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-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.