Nebraska to Partner with Digimarc on Pilot Project to Improve Traffic Safety and Enhance ID Security.

BEAVERTON, Ore. -- Project focuses on use of digital watermarking and is funded by a grant from the National Highway Traffic Safety Administration 

Digimarc Corporation (Nasdaq:DMRCE) today announced the Nebraska Department of Motor Vehicles has been selected to participate in a pilot of new capabilities for authenticating driver licenses. The pilot will include driver license inspection within retail, law enforcement and Department of Motor Vehicle (DMV) environments. Because of the link between fake IDs and highway safety, the goal of the project is to enhance traffic safety and driver license security by authenticating driver licenses using digital watermarks.

The project will demonstrate a means to reduce underage alcohol sales and enhance officer safety in traffic stops through machine inspection of driver licenses. The program is supported by a grant of approximately $1 million that Digimarc received last year from the National Highway Traffic Safety Administration (NHTSA), an agency of the U.S. Department of Transportation (DOT).

All states and the District of Columbia have 21-year-old minimum drinking age laws, yet according to the NHTSA's National Center for Statistics and Analysis (NCSA), there were 1,861 young drivers involved in alcohol-related fatal crashes in 2003. Young drivers who were involved in fatal crashes and had any level of alcohol in their blood (BAC 0.01 +) increased by 5 percent over the last five years, (from 1,772 in 1999 to 1,861 in 2003). In many cases, the related alcohol purchases were made with fake driver licenses.

Over the next few months, Digimarc and the Nebraska DMV will work closely together to define the specific operational requirements of the program pilot and to select, integrate and test digital watermark reader platforms for the DMV, law enforcement and retail environments.

The project will cover three primary traffic safety and driver license authentication areas, all of which currently rely primarily on visual inspection of driver licenses presented to establish identity or age:

--Machine-assisted field inspection of driver licenses from police cruisers, such as during traffic stops.

--Machine-assisted inspection of driver licenses at retail point-of-sale locations involving the sale of alcohol.

--Machine-assisted inspection of driver licenses at the DMV during the application or renewal process.

"The Nebraska DMV has been working in close partnership for several years with our local financial, retail and law enforcement communities and with Digimarc to address issues of security and safety within our driver license system," said Beverly Neth, director, Nebraska Department of Motor Vehicles. "This very important pilot underscores our commitment to ensure the highest level of integrity of the driver license and state identification cards and enable these credentials to be authenticated to help deter financial fraud, ID theft, underage access to age-sensitive products and contribute positively to state and national homeland security initiatives."

In 2003, Nebraska was one of the first states in the country to announce it would add covert digital watermarking to its driver license. Today approximately 25 percent of the Nebraska licenses in circulation carry this digital security feature.

"Nebraska has been a leader in adoption of advanced security features in their driver license to combat identity theft and improve roadway safety for citizens," said J. Scott Carr, president, Digimarc Watermarking Solutions. "We are very pleased to engage in this program with the Nebraska DMV to demonstrate how authentication of driver license credentials can further enhance traffic safety."

About Digimarc

Digimarc Corporation (Nasdaq:DMRCE), 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 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 187 issued U.S. patents with more than 4,000 claims, and more than 350 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; the Washington, DC area; and European offices in London. 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. 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 these factors is set forth in filings by Digimarc with the Securities and Exchange Commission, including the most recent annual report on Form 10-K and the most recent quarterly report on Form 10-Q. 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, whether they arise as a result of new information, future events, or otherwise.