Digimarc News: U.S. Supreme Court Directs Attention to Digital Watermarking as a Means to Curb Copyright Infringement.

BEAVERTON, Ore. -- Court ruling in MGM v. Grokster identifies digital watermarking as a technology that P2P file-sharing companies could deploy to deter copyright infringement

Digimarc Corporation (NASDAQ: DMRC) announced today that Monday's U.S. Supreme Court ruling in the landmark case, Metro-Goldwyn-Mayer Studios v. Grokster, identifies digital watermarking as one of three technologies that could be used by rights holders and peer-to-peer (P2P) file-sharing companies to deter piracy and illegal use of copyrighted entertainment content.

"The Court's ruling identifies digital watermarking as one of the technological innovations available today that could help the copyright holders and P2P networks reduce copyright infringement," said Bruce Davis, chairman and CEO, Digimarc. "Digimarc and its business partners stand ready to support copyright holders and the P2P industry as they consider the implications of this important ruling."

Digital watermarking is increasingly being deployed by the entertainment industry to more effectively manage media content and associated rights. Nearly all the major movie studios and record labels as well as major TV broadcasters around the world are using the technology to help identify and protect copyrighted content by employing a widening array of solutions from Digimarc and its business partners.

Coincidentally, Digimarc and the Motion Picture Association of America will be covering the Supreme Court ruling in their comments today, June 28, 2005, 12:00-1:30 p.m. at a luncheon discussion with the Congressional Entertainment Industries Caucus, B354 Rayburn House Office Building, in Washington D.C. Digimarc's presentation will address how digital watermarking can support the needs of content owners to protect their intellectual property while encouraging innovation of new technology and consumer products and meeting the expectations of consumers to fair and legitimate use of content.

About Digimarc

Digimarc Corporation (NASDAQ: DMRC), based in Beaverton, Oregon, is a leading supplier of secure media solutions used in a wide range of security, identification and digital media content applications. 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 194 issued U.S. patents with more than 4,000 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.

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 expected benefits of the U.S. Supreme Court Ruling, digital watermarking and its use by the P2P file-sharing networks to deter piracy 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 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 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, including its recent filings 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 March 31, 2005, in Part I, Item 2 thereof ("Management's Discussion and Analysis of Financial Condition and Results of Operations") under the captions "Overview," "Restatement of Prior Financial Results," "Critical Accounting Policies and Estimates," "Liquidity and Capital Resources," and "Risk Factors," and in Part I, Item 4 thereof ("Controls and Procedures").