Digimarc Awarded Contract to Help Secure Nuclear Weapons in U.S. Navy Custody

Digimarc Corporation (NASDAQ:DMRC) today announced that it was officially awarded a contract by Battelle Energy Alliance, LLC (BEA), in the amount of $920,700, to help create a system to ensure the security and safety of strategic weapons facilities.

The Department of Defense’s Enhanced Security Weapons/Nuclear Weapons program will use Digimarc technology in a covert sensory system to provide long-range surveillance and intelligence of potential threat targets.

"We are pleased to be awarded this long-anticipated project and have our technology included as a key part of this innovative new program,” stated Bruce Davis, chairman and CEO of Digimarc. "The secure, persistent and imperceptible characteristics of digital watermarking, and its demonstrated value in government surveillance applications, make it ideal for this project.”

The program will meet the DoD requirements established by DoD S5210.41M which was signed in November 2004. Delivery of the project is anticipated by February 28, 2010.

About Digimarc

Digimarc Corporation (NASDAQ:DMRC), based in Beaverton, Oregon, is a leading innovator and technology provider, enabling businesses and governments worldwide to enrich everyday living by giving persistent digital identities to all forms of media and many other objects. The Company’s technology enables a wide range of solutions for deterring fraud, counterfeiting and piracy, enhancing national security, and enabling new digital media distribution and monetization models that provide consumers with more choice and access to content when, where and how they want it. Digimarc has an extensive intellectual property portfolio, with more than 525 U.S. and foreign patents, and more than 400 patents pending in digital watermarking, media identification and management, and related technologies. Digimarc develops solutions, licenses its intellectual property, and provides development services to business partners across a range of industries. Please go to www.digimarc.com for more Company information.

Forward-Looking Statements

With the exception of historical information contained in this release, the matters described in this release contain various "forward-looking statements." These forward-looking statements include statements about delays on federal defense contracts and other statements identified by terminology such as "may," "will," "should," "expects," "intends," "plans," "projects," "anticipates," "believes," "estimates," "predicts," "potential," "illustrate," "example" and "continue" or other derivations of these or other comparable terms. These forward-looking statements are statements of management's opinion and are subject to various assumptions, risks, uncertainties and changes in circumstances. Actual results may vary materially from those expressed or implied from the statements in this release as a result of changes in economic, business and/or regulatory factors. More detailed information about risk factors that may affect actual results is set forth in the Company's Form 10-K for the year ended December 31, 2008 in Part I, Item 1A thereof ("Risk Factors"), Part II, Item 7 thereof ("Management’s Discussion and Analysis of Financial Condition and Results of Operations”) under the captions "Liquidity and Capital Resources” and "Forward Looking Statements” and in Part II, Item 9A(T) thereof ("Controls and Procedures”), and in subsequent periodic reports filed with the SEC. 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, Digimarc undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this release.