Digimarc and Activated Content Renew and Extend Licensing Agreement to Further Address Piracy of Music and Video Games.

BEAVERTON, Ore. & BELLEVUE, Wash. -- License Supports Activated Content Efforts to Help Music Industry Deter Piracy of Pre-Release Music as Well as Unauthorized Music and Game Downloads

Digimarc Corporation (NASDAQ: DMRC) and Activated Content today announced they have renewed and extended their multi-year licensing agreement to help the music and video game industries fight digital piracy across existing and emerging content distribution markets.

The multi-year, non-exclusive agreement, which licenses Digimarc's audio watermarking patents to Activated Content, renews Activated Content's previous license agreement with Digimarc for forensic tracking of pre-release music. The agreement expands the licensed fields of use to include tracking of commercially downloaded digital music and video game downloads as a means to identify and deter unauthorized use in the consumer space and also to allow for the development of video and digital cinema forensic tracking applications.

"The renewal of our licensing agreement with this long-standing partner will support the continued expansion of Activated Content's business and the promising market opportunity for forensically tracking media content to deter piracy," said Reed Stager, vice president, Corporate Licensing, Digimarc Corporation. "Activated Content solutions, under license from Digimarc, are now successfully being used by many of the major record labels for pre-release music, and will now have the opportunity to be extended to help the industry address the piracy concerns surrounding business-to-consumer content downloads of music and games."

"We are very pleased with the success the music industry has seen in deploying Activated Content audio watermarking solutions to forensically track and deter piracy of pre-release music and believe there are great opportunities for broadening the reach of these solutions to address additional business and consumer distribution models," said Eric Silberstein, CEO, Activated Content. "Our partnership with Digimarc ensures that we can leverage Digimarc's support and expertise as we focus on serving music and video industry customers and providing solutions to their piracy issues."

Based in Bellevue, Washington, Activated Content develops and commercializes audio watermarking-based products designed to help the music industry enhance the security of digitally distributing music - whether in pre-release form to music critics, radio stations and distributors, or in released form to consumers or channel partners.

Currently, Activated Content's products are incorporated in more than 2 million audio tracks from the major record labels to identify and track leaks of promotional, pre-release music onto the Internet. By embedding a digital watermark into music to help identify the authorized recipient, content owners can identify where pre-release music left the path of authorized distribution. The watermark content ID can also enable promotional applications such as linking the copy of the music to the most up-to-date promotional material for the authorized recipient.

Activated Content's customers include major record labels such as SonyBMG and Universal Music Group, mastering studios, disk duplicators and online business-to-business music distributors.

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 195 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.

About Activated Content

Launched in 2001 and based in Bellevue, Washington, Activated Content Corporation has developed and is marketing a suite of products and services to protect and manage audio-inclusive content. Market entry products protect music in B2B & B2C markets from piracy using a patented advanced audio watermarking technology. The products are fully developed for embedding inaudible digital watermarks into audio, and provide a full and robust set of tools for forensic tracking from creation to distribution.

With global deployments in England, France, Germany, Denmark, the Netherlands, Turkey, India, Australia, and Canada, the Activated Content watermarking technology is incorporated in over 2 million audio tracks worldwide leading to weekly detection of industry leaks and piracy. The Activated Content products can be adapted for use in protecting, tracking, and managing major motion pictures, direct-to-DVD, and electronic games as well as other forms of audio-inclusive entertainment content.

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 Activated Content's solutions and their use by the music industry 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").