PRESS RELEASE

Digimarc and Mobile Data Systems to Deliver Digital Watermarking-Based Mobile Print-to-Web Applications to U.S. Market

Mobile Data Systems, Inc. becomes Digimarc’s first U.S. partner to deploy the digital watermarking-based Digimarc Mobile platform

September 20, 2006

Nesconset, NY and Beaverton, OR – Digimarc Corporation (NASDAQ: DMRC) today announced an agreement with Mobile Data Systems Inc. to bring new consumer-oriented mobile applications and experiences based on Digimarc Mobile print-to-web linking technology to the U.S. marketplace.

Under the agreement, Mobile Data Systems will license and use the Digimarc Mobile platform to market a number of innovative mobile consumer applications that allow camera phone users to automatically link from printed materials, such as catalogs, magazine advertisements, and packaging, to associated sites and services on the Internet.

"With this latest agreement for the Digimarc Mobile platform, we are building momentum for digital watermarking solutions that simplify mobile Internet access and turn printed objects into launching points for compelling applications," said Stuart Rosove, senior director, business development, Digimarc. "Mobile Data Systems' leadership in providing innovative mobile solutions makes them an ideal partner to market Digimarc’s print-to-web linking capabilities to the growing U.S. mobile market."

One example of Mobile Data Systems' innovative applications includes its Pocket Photo Suite™ solution, which helped photographers of a major news organization covering the Super Bowl XL game earlier this year to quickly and easily transmit pictures from the sidelines to distribution centers using wireless LAN connectivity, without ever leaving the field. The Company also offers an array of wireless mobility applications for sales personnel, field technicians, insurance and patient safety users (see www.mobiledatasys.com), among others.

"We are excited by the potential of the Digimarc Mobile platform to bridge the physical and mobile worlds and envision a variety of innovative and practical applications that will benefit mobile consumers," said Anthony Iacovone, VP of Business Development at Mobile Data Systems. "We believe the combination of our expertise in optically-based mobile solutions and Digimarc’s expertise in digital watermarking will enable valuable new experiences for mobile Internet users."

Using Digimarc Mobile technology, machine-readable digital watermark data that is not visible to users is incorporated into printed materials — magazines, signs, catalogs, and entertainment and consumer packaging — and "read" by enabled mobile imaging devices, such as smart phones and PDAs, to automatically deliver valuable mobile content and e-commerce opportunities to consumers.

Digimarc Mobile solutions, which are recognizable by the "Digimarc Enabled" icon, are also being deployed by partners in Japan, Spain and Portugal, representing some of the world’s most advanced mobile economies. For more information, please visit: www.digimarc.com/comm/mobile.asp

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.

About Mobile Data Systems: Mobile Data Systems, Inc. is a privately held company based on Long Island, New York that is committed to creating the interactive link between traditional media and its target audience. Using bar code and digital watermark encoding technologies and industry standard mobile device and cell phone platforms, Mobile Data Systems is enabling consumers to interact with product packaging, printed advertisement, and a growing list of other printed media. Businesses are better able to reach, attract and increase the responsiveness to their brands and advertising initiatives using interactive campaigns that are redefining how the world markets products and services in the age of mobility. Learn more at www.mobiledatasys.com.

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For more information:

Digimarc

Leslie Constans
Digimarc Public Relations
503-469-4620
lconstans@digimarc.com

Jeremy Bartram
InfoTech Strategies for Digimarc
206-264-1999
bartram@itstrategies.com

Mobile Data Systems

Rob DeStefano
MDS Public Relations

631-360-3400
rdestefano@mobiledatasys.com