Digimarc Innovations in Driver License Security Help Iowa Deter Counterfeiting, Terrorism and Fraud; New Secure Driver License System Positions Iowa to Tackle REAL ID Compliance

"Iowa's new digital driver license system is built on a number ofnew technologies, features and processes that will help us meet ourgoals of improving traffic safety and curtailing criminal activityrelated to the use of fraudulent identification," said Shirley Andre,Director of the Iowa DOT's Motor Vehicle Division. "We are pleased tohave worked closely with Digimarc to implement this advanced system ina timely manner and begin preparing Iowa for addressing REAL IDcompliance."

As part of the new system, Iowa recently introduced a newlydesigned digital driver license loaded with advanced innovations in IDsecurity, including Digimarc IDMarc(TM) and Digimarc ExianDual(TM)card architecture for instant issuance environments.

IDMarc is a digital watermarking-based, machine-readable securityfeature embedded and authenticated on identity documents. IDMarctransforms passive elements of a document into a covert interlockingsecurity feature. Nearly 40% of U.S. driver licenses produced in 2006are expected to be protected with IDMarc digital watermarks.

ExianDual is Digimarc's instant issuance card offering designedspecifically to increase driver license security and durability forStates that require instant issuance. Additionally, Iowa's ExianDualcard material is embedded with inventory control numbers for enhancedsecurity and card accountability from manufacture to issuance.

"With the adoption of the industry's key technological innovationsin card security for over-the-counter issuance environments andmachine-readable, digital watermark security for cross-jurisdictionaldriver license authentication, Iowa is demonstrating its leadership insecure driver license issuance," said Robert Eckel, president,government programs, Digimarc Corporation. "We look forward tocontinuing our close partnership with the Iowa DOT as they look aheadto the needs of the REAL ID Act."

Iowa's new system includes upgrades in hardware, software, cameraequipment, and a modular-component architecture supporting 123 issuinglocations around the State. The system also enables the DOT's new"photo anywhere" workflow scheduled for rollout this spring -- a smartprocess that gives issuers the flexibility to capture a person'sportrait anytime during the application process and use that portraitto verify identity before a valid driver license is issued. Identityverification is an important component of REAL ID compliance.

About Digimarc

Digimarc Corporation (Nasdaq:DMRC), based in Beaverton, Oregon, isa leading supplier of secure identity and media management solutions.Digimarc provides products and services that enable the production ofmore than 60 million personal-identification documents, includingtwo-thirds of U.S. driver licenses and IDs for more than 20 countries.Digimarc's digital watermarking technology provides a persistentdigital identity for various media content and is used to enhance thesecurity of financial documents, identity documents and digitalimages, and support other media rights-management applications.

Digimarc has an extensive intellectual property portfolio, withmore than 230 issued U.S. patents with more than 5,000 claims, andmore than 400 pending patent applications in digital watermarking,personal identification and related technologies. The Company isheadquartered in Beaverton, Oregon, with other U.S. offices inBurlington, Massachusetts; Fort Wayne, Indiana; and the Washington,DC, area; and international offices in London and Mexico. Please go towww.digimarc.com for more company information.

Additional Information
-- http://www.digimarc.com/watermark/idmarc/
More information on Digimarc IDMarc digital watermarking

-- http://www.digimarc.com/secureid/production/cards_architectures.asp
Descriptions of Digimarc card architectures, including ExianDual
and ExianEvident 3D

-- http://www.digimarc.com/about/real_id.asp
Information on the REAL ID Act of 2005 and its impact on driver
license issuers in the United States

-- http://www.digimarc.com/watermark/about/
More information on digital watermarking technologies like IDMarc

-- http://www.digimarc.com/patent/watermarking_applications.asp
Additional applications of digital watermarking

Securities Safe Harbor

With the exception of historical information contained in thisrelease, the matters described herein contain certain "forward-lookingstatements" that are made pursuant to the "safe harbor" provisions ofthe Private Securities Litigation Reform Act of 1995. Suchforward-looking statements include statements regarding the expectedbenefits of the new driver license system in Iowa, including thefacilitation of compliance with the REAL ID Act, as well as statementscontaining the words "believes," "expects," "estimates,""anticipates," "will" or words of similar import or statements ofmanagement's opinion. These statements are subject to certainassumptions, risks, uncertainties, and changes in circumstances.Actual results may vary materially from those expressed or impliedfrom the statements herein or from historical results, due to changesin economic, business, competitive, technological, and/or regulatoryfactors. More detailed information about risk factors that may affectactual results is set forth in filings by Digimarc with the Securitiesand Exchange Commission on Forms 10-K, 10-Q and 8-K, including, butnot limited to, those described in the Company's Form 10-K for theyear ended December 31, 2005, in Part II, Item 7 thereof("Management's Discussion and Analysis of Financial Condition andResults of Operations") under the captions "Liquidity and CapitalResources" and "Factors Affecting Forward Looking Statements" and inPart II, Item 9A thereof ("Controls and Procedures"). Readers arecautioned not to place undue reliance on these forward-lookingstatements, which reflect management's opinions only as of the date ofthis release. Except as required by law, we undertake no obligation torevise or publicly release the results of any revision to theseforward-looking statements.