Court Grants Digimarc Request to Halt Implementation of a Replacement Driver License System in Georgia.

Business Editors/High-Tech Writers

TUALATIN, Ore.--(BUSINESS WIRE)--Aug. 1, 2003

Court grants a stay of Viisage's planned implementation of Georgia

driver license system until trial occurs

Digimarc Corporation (Nasdaq:DMRC) today announced that the state court for Fulton County, Georgia has granted Digimarc's request for a preliminary injunction to preclude the state's Department of Motor Vehicle Services from continuing to work with Viisage Technology, Inc. (Nasdaq:VISG) to install a new driver license system for the state of Georgia.

After the state awarded a contract to Viisage on November 12, 2002, Digimarc filed a protest with the state shortly thereafter and later filed suit in Superior Court in March 2003 claiming that the state had violated its own procurement procedures and that Viisage was not a responsible bidder to whom the contract should have been awarded. With a specific finding made by the court after a full hearing that Digimarc had "made a compelling case that irregularities occurred during the procurement process" and demonstrated a substantial likelihood of success on the merits with a full trial, the court enjoined any further activities by the state in continuing to work with Viisage until a trial takes place for Digimarc's protest.

Under the state's contract with Viisage, Georgia was scheduled to begin using Viisage to issue licenses in August 2003. With the stay issued by the court, Digimarc will continue to provide its services under its existing contract for the Georgia driver license system until the matter is resolved.

"We are pleased with the court's ruling that if the case proceeds to a full trial on the merits, there is a substantial likelihood we will prevail," said Indra Paul, president of Digimarc ID Systems. "We have supported the state of Georgia's digital driver license system since 1997 and are confident that our bid proposed the highest quality and most secure driver license system that represents the best value for the people of Georgia. We hope that this matter will be resolved in a manner that allows us to continue to deliver on our commitment to providing the highest levels of quality service and support to Georgia's Department of Motor Vehicle Services and its customers."

About Digimarc

Digimarc Corporation (Nasdaq:DMRC) is a leading supplier of digital watermarking and secure personal identification technologies and solutions used in a wide range of security, identification and digital media content applications.

Digimarc provides more than 60 million personal identification documents and driver licenses per year for 33 U.S. states and more than 24 countries. Digimarc's digital watermarking technology provides a persistent digital identity to all media content and enhances the security of financial documents, identity documents and digital images.

Digimarc has an extensive intellectual property portfolio, with 113 issued U.S. patents with more than 2,000 claims, and more than 350 pending patent applications in digital watermarking, personal identification and related technologies. The company is headquartered in Tualatin, Oregon, with other U.S. offices in Burlington, Massachusetts; Fort Wayne, Indiana; San Francisco, California; and the Washington DC area; and European offices in London and Vienna. 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, but are not limited to, statements regarding the potential success of Digimarc's case with the state of Georgia, statements regarding any potential contract extension with the state of Georgia, statements regarding the nature of future service and support by Digimarc to the state of Georgia's Department of Motor Vehicle Services and its customers and other statements containing words such as "believes," "expects," "estimates" or "anticipates" and words of similar import or statements of management's opinion. 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, among other things, the judgments of the courts in the state of Georgia as well as changes in economic, business, competitive, technological and/or regulatory factors. More detailed information about various risk factors impacting Digimarc's forward-looking statements is set forth in filings by Digimarc with the Securities and Exchange Commission, including without limitation Digimarc's most recent quarterly report on Form 10-Q under Item 2 ("Management's Discussion and Analysis of Financial Condition and Results of Operations") thereof under the captions "Overview", "Critical Accounting Policies and Estimates", "Liquidity and Capital Resources", "Risks Related to Our Business" and "Risks related to Our Markets". 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 that may arise after the date of this press release, whether they arise as a result of new information, future events, or otherwise.