Your Answers.
Everywhere.
Your Solution.
Now.
Your Data.
Smarter.
January 31, 2006

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

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

For immediate release

Digimarc and GCS Research Expand Relationship to Deliver Enhanced Digital Watermarking Solutions to the Geospatial Market

GCS Research to use Digimarc technology to develop and deliver new digital watermarking products that address the growing need to identify, protect and connect valuable geospatial imagery

Beaverton, Oregon and Missoula, Montana - Jan. 31, 2006 - Digimarc Corporation (NASDAQ: DMRC) and GCS Research today announced they have expanded their business relationship through a new licensing agreement that enables GCS Research to bring new digital watermarking-based products to the geospatial market based on Digimarc intellectual property and technology components.

Geospatial or remote-sensed imagery is becoming an increasingly valuable asset, with industry giants like Google and Microsoft offering satellite imagery as part of new commercial solutions, and state, local and federal government agencies relying upon image and sensor data to better understand, manage and respond to threats. This is especially the case in the government sector for intelligence, mission planning and emergency response.

As a result, the ability to identify, protect and connect geospatial image assets using digital watermarking is increasingly important to customers in the federal, state, local government and private sector GIS markets as well as for defense and intelligence agencies.

Under the agreement, GCS Research will use Digimarc's patented digital watermarking technology to build new products that address the unique needs of the geospatial image and sensor data workflow. Digital watermarking capabilities, marketed by GCS Research under the product name GeoMarc™, enable GCS Research customers to embed information into image pixels for copyright protection, geospatial data connectivity, geospatial data linking, and persistent georeferencing of geospatial imagery. GeoMarc is available today as an extension to ESRI's ArcGIS software.

"This agreement reinforces the value we see in our long-standing relationship with GCS Research," said Reed Stager, executive vice president, Digimarc. "We are thrilled to be working with GCS Research in support of their efforts to build enhanced digital watermarking products that address many of the image identification and linking needs of the geospatial industry."

"We're excited to have achieved this expanded license agreement with Digimarc for their patented technology. This agreement will allow GCS Research to go to the next level in the development of our product line and will enable us to deliver new digital watermarking capabilities to the geospatial community that help identify, protect and connect valuable geospatial and remote-sense image assets," said Alex Philp, president, GCS-Research.

Earlier this month, Digimarc and GCS Research announced their involvement in a program to deliver digital watermarking to the U.S. Army Night Vision Electronic Sensor Directorate to enable more effective battlefield, port and border intelligence.

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 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 200 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 GCS Research

GCS Research LLC is a geospatial information technology company headquartered in Missoula, Montana. We deliver integrated products and services that allow our clients to organize, protect, visualize, analyze, and share their geospatial information across distributed networks.  We specialize in custom .NET geospatial applications and interoperable Web services that harness the power of location intelligence and deliver this information across the enterprise.  GCS Research provides award-winning geospatial solutions designed to support connected workflows and powerful, client experiences. 

Additonal information:

Digital watermarking and the U.S. Army Night Vision Electronic Sensor Directorate
http://www.digimarc.com/about/release.asp?newsID=3nnnn65

Digimarc Corporation
http://www.digimarc.com

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 increasing importance and anticipated benefits of digital watermarking within the geospatial market, as well as 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 quarterly period ended June 30, 2005, in Part I, Item 2 thereof ("Management's Discussion and Analysis of Financial Condition and Results of Operations") under the caption "Risk Factors." 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.


January 31, 2006
Press Release: Digimarc and GCS Research Expand Relationship to Deliver Enhanced Digital Watermarking Solutions

Digimarc and GCS Research Expand Relationship to Deliver

Enhanced Digital Watermarking Solutions

BEAVERTON, Ore. & Missoula, Mont.-- Jan. 31, 2006--  GCS Research to Use Digimarc Technology to Develop and Deliver New Digital Watermarking Products That Address the Growing Need to Identify, Protect and Connect Valuable Geospatial Imagery   

Digimarc Corporation (Nasdaq:DMRC) and GCS Research today announced they have expanded their business relationship through a new licensing agreement that enables GCS Research to bring new digital watermarking-based products to the geospatial market based on Digimarc intellectual property and technology components.

Geospatial or remote-sensed imagery is becoming an increasingly valuable asset, with industry giants like Google and Microsoft offering satellite imagery as part of new commercial solutions, and state, local and federal government agencies relying upon image and sensor data to better understand, manage and respond to threats. This is especially the case in the government sector for intelligence, mission planning and emergency response.

As a result, the ability to identify, protect and connect geospatial image assets using digital watermarking is increasingly important to customers in the federal, state, local government and private sector GIS markets as well as for defense and intelligence agencies.

Under the agreement, GCS Research will use Digimarc's patented digital watermarking technology to build new products that address the unique needs of the geospatial image and sensor data workflow. Digital watermarking capabilities, marketed by GCS Research under the product name GeoMarc(TM), enable GCS Research customers to embed information into image pixels for copyright protection, geospatial data connectivity, geospatial data linking, and persistent georeferencing of geospatial imagery. GeoMarc is available today as an extension to ESRI's ArcGIS software.

"This agreement reinforces the value we see in our long-standing relationship with GCS Research," said Reed Stager, executive vice president, Digimarc. "We are thrilled to be working with GCS Research in support of their efforts to build enhanced digital watermarking products that address many of the image identification and linking needs of the geospatial industry."

"We're excited to have achieved this expanded license agreement with Digimarc for their patented technology. This agreement will allow GCS Research to go to the next level in the development of our product line and will enable us to deliver new digital watermarking capabilities to the geospatial community that help identify, protect and connect valuable geospatial and remote-sense image assets," said Alex Philp, president, GCS-Research.

Earlier this month, Digimarc and GCS Research announced their involvement in a program to deliver digital watermarking to the U.S. Army Night Vision Electronic Sensor Directorate to enable more effective battlefield, port and border intelligence.

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 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 200 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 GCS Research

GCS Research LLC is a geospatial information technology company headquartered in Missoula, Montana. We deliver integrated products and services that allow our clients to organize, protect, visualize, analyze, and share their geospatial information across distributed networks. We specialize in custom .NET geospatial applications and interoperable Web services that harness the power of location intelligence and deliver this information across the enterprise. GCS Research provides award-winning geospatial solutions designed to support connected workflows and powerful, client experiences.

    Additonal information:

    --  Digital watermarking
        http://www.digimarc.com/watermark/about/

    --  Digimarc Corporation intellectual property on digital
        watermarking
        http://www.digimarc.com/patent/patents.asp

    --  Digital watermarking and the U.S. Army Night Vision Electronic
        Sensor Directorate
        http://www.digimarc.com/about/release.asp?newsID=3nn65

    --  Digimarc Corporation
        http://www.digimarc.com