1. IDMarc and Document Inspector

2. © Digimarc Corporation - Confidential Digimarc Secure ID Leadership Digimarc driver licenses in 30 states and Wash. D.C. Digimarc drivers licenses, national IDs & voter IDs in more than 20 countries More than 60 million Digimarc ID cards issued per year; 2 billion IDs to date Digital watermarking pioneer, IDMarc adopted by 20 U.S. States More than one in three US licenses produced in 2006 featured IDMarc Digimarc is the world leader in designing, developing and integrating secure ID systems DWM

3. © Digimarc Corporation - Confidential Secure Credential Post Issuance Inspection Secure Enrollment Secure Production Digimarc Secure ID Lifecycle Solutions Card Architecture ExianBase ExianEvidentExianDual ID Authentication for Travel, Retail, Banking, DMV IDMarc Test DLTest (Knowledge Testing) Camera Tower Capture Software Capture Identity Validation Suite (IDVS) Applicant Data Verification Biometric Identification Verify Store Image Server (Image and Document Archiving) Security Features IDMarc OVD Laser Perforation Banknote Design Multi- Personalization Tamper Evident Restricted Materials DurabilityOthers… Document Inspector Over-the-Counter Issuance Workflow Inventory Management Production Hardware/ Software Central Issuance Workflow Inventory Management Production Control (Zero Gap) Mailing/ Auditing Secure Facilities Professional Staffing Fingerprint & Signature Capture Document Authentication SEE, FEEL, MACHINE VALIDATE

4. © Digimarc Corporation - Confidential Digital Watermarking Digital Watermarking (DWM): Includes a set of proven software technologies Covertly encodes and decodes digital information Creates an imperceptible identity in digital content, digitally-derived print and analog media DWM is currently being used to secure and enhance Financial documents Identification documents including driver licenses and visas (IDMarc) Both printed and electronic digital photographs Native and broadcast digital audio and video

5. © Digimarc Corporation - Confidential IDMarc An imperceptible digital code that can be placed into all forms of digital or printed content, including driver licenses Security feature that takes up no additional space on the driver license Machine readable by a low-cost readers with secure software Enables cross-jurisdictional authentication Balances the need for document security with citizen privacy Original Photo IDMarc Embedded IDMarc Image 0101001010010 1001010101001 0100101010110

6. © Digimarc Corporation - Confidential IDMarc- Linked and Layered Security A Covert Digital Laminate Digital interlocking is enabled by IDMarc Stand alone security features can now cross reference one another Covert features can link to overt Physical features link to digital features

7. © Digimarc Corporation - Confidential Why IDMarc in Driver Licenses? Reliable visual authentication is impacted by … Digital counterfeiting techniques More than 200 different U.S. DL designs Skill and experience required to be able to spot a fake ID Darkness or areas with limited visibility Staff distractions Unfamiliarity with out-of-state licenses Digital Watermarking eliminates judgments calls through instant machine authentication

8. © Digimarc Corporation - Confidential IDMarc Inspection Machine readable authentication IDMarc Inspector Series software compares linked data elements to authenticate the document Multi-layer inspection Different levels of analyses depending on software Forensic or Retail/Age Verification editions of the software available

9. © Digimarc Corporation - Confidential IDMarc Adoption- Data as of January 2007 IDMarc® Trends 20 states 11 States at critical mass (over 50% IDMarc in circulation) New drivers the most likely to have IDMarc DL Total DLs in circulation with IDMarc: ~23% (51,462,000) 50% USDL under contract* Q1 2006 Q2 2006 Q3 2006 Q4 2006 07-08 TBD Michigan Nebraska Colorado Kansas Florida New Jersey Alabama Iowa Wyoming Mass Vermont Minnesota Idaho Oregon DC Utah Texas Washington Indiana States with over 50% of total DLs in circulation w/ IDMarc *Annual forecasted IDMarc issuance data (either in production or under contact) divided by the total annual issuance for all US DLs.

10. © Digimarc Corporation - Confidential NHTSA Pilot Program with the Nebraska DMV NHTSA grant to determine easy authentication of driver licenses using IDMarc IDMarc readers installed at: 18 point-of-sale sites, 30 office sites including DMV exam stations and 35 law enforcement sites DMV and Law Enforcement utilized a forensic version Point-of-sale sites utilized a retail version Results of the program: 97% had confidence that the ID was authentic 86% (retail only) would purchase the hardware that uses the digital watermark feature Nebraska deployed readers on their examiner workstations