Digimarc Patent Proposes Solution for Identifying Copyrighted Content in Social Networks and Peer-to-Peer Environments.

The patented invention also enables identification of "orphan works" that have lost their copyrighted information

BEAVERTON, Ore. -- Digimarc Corporation (NASDAQ:DMRC) announced today that it has been issued a patent (U.S. Patent No. 7,095,871) that describes ways to improve the identification and management of copyrighted digital assets. The patent, entitled "Digital asset management and linking media signals with related data using watermarks," teaches ways of identifying entertainment content with digital watermarks and linking it to multiple sources of valuable information or services.

As digital content continues to proliferate and be distributed across social networks and peer-to-peer (P2P) environments on the Internet, identifying and managing copyrighted assets and related goods and services is becoming an increasing challenge. The problem is compounded by the fact that digital works can easily lose their identifying information during the distribution process, digital-to-analog conversion, or routine file format changes. Digital watermarking provides identifying and linking capabilities in an unobtrusive, persistent, format-independent fashion - giving images, movies, music or other digital content a digital identity that can help better manage content and associated rights and connect users to valuable information, relationships, and goods and services associated with the content.

Better identification of entertainment content on social networking sites such as YouTube and MySpace could enhance the consumer experience and improve marketing effectiveness, while protecting copyrights. The growing number of delivery options for digital media is enabling entertainment producers to increasingly package goods and services with entertainment content to enhance the value to consumers and improve profit margins. Digital watermarking has been used for many years to help track and manage commercial photographs on the Internet as a means to protect copyrights and enhance the licensing of those properties. More recently, digital watermarking has been widely adopted as an improved means of television broadcast monitoring and audience measurement. Various entertainment industry standards for leading-edge media innovations contemplate the use of digital watermarking, including digital cinema and high definition DVD.

"Social networking based on sharing entertainment content is a booming phenomenon that is plagued by the fact that media content can easily lose its identifying information when shared across these networks, creating 'orphan works' whose copyrights and ownership is unknown to users and not easily identified," said Reed Stager, executive vice president, Digimarc. Stager continued, "Images, music and movies need to be easily identified to provide enhanced consumer experiences and ensure appropriate use of copyrighted media. Digital watermarking is a promising and effective means to persistently identify entertainment content and enable new distribution models and enhanced consumer experiences."

Several other recently issued Digimarc patents propose improved means of identifying and managing media content, including:

* Associating images with metadata using watermarks; U.S. Number 7,010,144

* Linking to multiple databases by layering watermarks in content; U.S. Number 7,020,304

* Linking content with usage rights; U.S. Number 7,035,427

* Embedding object identifiers in media objects compatible with object identification standards; U.S. Number 7,044,395

* Creating interactive video objects by associating video with actions using watermarks; U.S. Number 7,050,603

* Linking documents to on-line data; U.S. Number 7,051,086

* Linking graphical images to the Internet; U.S. Number 7,058,697

* Managing relationships among related content using watermarks; U.S. Number 7,098,931

* Distributed systems for registering watermarked content and responding to requests triggered by watermark detection; U.S. Number 7,111,170

Digimarc licenses its extensive portfolio of digital watermarking-related patents and technology to the media and entertainment and other industries in support of a wide range of applications. Digimarc and its licensees have enabled the watermarking of billions of media objects around the world and deployed hundreds of millions of watermark readers in professional and consumer software applications and hardware devices. Digimarc has an active licensing program to foster use of the innovations covered in these patents. For more information on digital watermarking or Digimarc's licensing program, please, contact [e-mail].

Digimarc is also a founding member of the Digital Watermarking Alliance, an international group of industry leading companies that was recently formed to promote the value of digital watermarking to content owners, industry, policy makers and consumers (www.digitalwatermarkingalliance.org).

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 285 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 benefits of digital watermarking in connection with managing digital content and associated rights and connecting users to other related information, the anticipated increase in social networking, the use of digital watermarking to provide effective means to identify entertainment content and enable new distribution models, and other contemplated uses of digital watermarking, 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.