State Motor Vehicle Agencies Enforce 'One Driver, One License' Rules with Latest Release of Digimarc Biometric Identification Solution; Digimarc Delivers Powerful New Tools to Stop Identity Theft and Fraud and Related Crimes.

BEAVERTON, Ore. -- Digimarc Corporation (NASDAQ:DMRC) today announced the availability of version 2.0 of the powerful and proven Digimarc Biometric Identification solution. Drawing on successful deployment in states such as Alabama, Colorado, and Kansas, where Digimarc Biometric Identification stops thousands of attempts at driver license fraud and identity theft each year, this next-generation solution delivers new enhancements to accelerate searching, coordinate investigations, and stop driver license fraud.

Massachusetts recently completed a successful implementation of Biometric Identification 2.0, and Oregon and Texas have placed orders for the solution. Digimarc Biometric Identification 2.0 helps ensure that individuals applying for a driver license have not already been issued a valid license under another name or identity. This is accomplished using sophisticated facial recognition technologies that match an applicant's new portrait to the agency's database of licensing images to identify potential duplicates.

Biometric Identification 2.0, which was developed with input from the Massachusetts Registry of Motor Vehicles (RMV) and the Massachusetts State Police, allows those two agencies to run the 4,000 to 5,000 applicant images taken daily against the RMV's database of approximately 10 million images. Investigators review all matches, typically ruling out fraud in 5 to 10 seconds. So far, Digimarc Biometric Identification has detected minors who have obtained a duplicate license in order to buy alcohol, individuals whose licenses have been revoked or suspended, and career criminals who use multiple identities to evade capture and arrest.

"Facial recognition technology is helping Massachusetts achieve the goal of reducing license and ID fraud," said Anne L. Collins, Registrar, Massachusetts Registry of Motor Vehicles. "The program's efficiency allows a small number of investigators to quickly detect suspected fraud and provides required data that drives effective follow-up investigation by law enforcement."

"Digimarc was the first company in the industry to offer driver license issuers facial recognition solutions to ensure that only one license is issued to a driver," said J. Scott Carr, executive vice president, Digimarc. "Today, we are pleased to offer a new generation of Biometric Identification products that give driver license issuers, investigators and law enforcement a set of fast, easy-to-use tools to accurately and reliably compare all new applicant portraits with images in the driver license database and catch any attempts at multiple ID fraud."

When combined with tools to verify the documents and data presented as proof of an applicant's identity, biometric identification gives driver license issuers a complete solution to secure the enrollment and issuance process. Every day Digimarc biometric solutions make 163 billion facial recognition comparisons to filter out and stop thousands of attempts of driver license fraud annually.

Digimarc Biometric Identification 2.0 can be implemented as part of a central issuance system to stop issuance of a driver license before fraud is committed; or within an over-the-counter issuance environment, as a post-issuance investigative tool to track down and prosecute identity theft.

Key features and benefits of Digimarc Biometric Identification 2.0 include:

--  Expanded case management -

       --  A new capability to assign cases to individual
           investigators enhances investigator efficiency and ensures
           customer service levels when biometric comparisons gate
           issuance of driver license/IDs.

       --  Case visibility controls provide security for sensitive
           investigations, allow investigators to focus on their
           daily work and facilitate collaboration between
           investigators.

   --  Image upload for investigation -

       --  Supports fraud detection and law enforcement efforts by
           enabling external images to be used for comparisons within
           an investigation.

   --  Expanded reporting capabilities -

       --  Metrics and periodic summaries highlight fraud prevention
           progress and operational improvement opportunities.

For more information on Digimarc Biometric Identification 2.0, please visit: http://www.digimarc.com/biometric_identification

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 275 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 Digimarc's Biometric Identification 2.0 solution, 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 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.