Digimarc Launches New Service to Improve States' Ability to Identify Driver License Fraud.

Digimarc Anti-Fraud Service supports goal of ensuring "One Driver, One License" by quickly finding potential duplicate licenses issued to the same individual

BEAVERTON, Ore. -- Digimarc Corporation (NASDAQ: DMRC) today announced its Digimarc Anti-Fraud Service, a new offering that helps State driver license issuing authorities identify and root out multiple license fraud by comparing all facial images stored in the driver license database against each other. The Anti-Fraud Service reduces the effort and cost required to implement Digimarc Biometric Identification later as it uses the same software and processes, but is delivered as a one-time service.

According to a 2006 Federal Trade Commission report, consumer complaints of identity fraud and theft increased 25% between 2003 and 20051, with total economic losses to consumers of approximately $5 billion and a total cost to businesses of over $48 billion. To address this growing concern, the Digimarc Anti-Fraud Service provides States with the means to effectively root out multiple driver licenses issued to the same individual and equips law enforcement to successfully prosecute fraud cases.

Digimarc's new service automatically "scrubs" an agency's existing driver license database looking for possible duplicate licenses issued to the same person - whether through fraud, identity theft or other inadvertent reasons - and returns results according to the greatest likelihood of fraud for follow-up. The Anti-Fraud Service includes a range of investigation tools that support law enforcement efforts to efficiently find and further pursue suspected fraud.

"Ensuring 'One Driver, One License' is an important part of combating identity theft," said Bob Eckel, president, government programs, Digimarc. "The Digimarc Anti-Fraud Service leverages biometric identification technology to identify potential fraud in a driver license issuer's portrait database and lays the foundation for preventing such problems in the future."

The Digimarc Anti-Fraud Service offers an ideal entry point for jurisdictions looking to evaluate biometric applications as a means to enhance the protection of citizens from identity theft and fraud. Driver license issuers and law enforcement agencies are able to quantify the return on investment (ROI) of a full scale deployment of Digimarc Biometric Identification with proven results that assist with budget justification.

For more information about the Digimarc Anti-Fraud Service, please visit: http://www.digimarc.com/govt/anti_fraud.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 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 295 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 effectiveness of Digimarc's Anti-Fraud Service in identifying and preventing driver license fraud and in facilitating the adjudication of suspected fraud, 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-Q for the quarterly period ended September 30, 2006, in Part I, Item 2 thereof ("Management's Discussion and Analysis of Financial Condition and Results of Operations") under the caption "Risk Factors." 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.

1 Consumer Fraud and Identity Theft Complaint Data, January - December 2005, Federal Trade Commission, January 2006