TUALATIN, ORE. - August 21, 2000 - Digimarc Corporation (NASDAQ: DMRC), the world leader in digital watermark technology and applications, today announced that SquareTrade, the leading provider of online trust services for e-commerce transactions, will use Digimarc watermarking technology to monitor the usage of the SquareTrade Seal of approval on the Internet.

Under the terms of the agreement, SquareTrade will embed Digimarc's imperceptible digital watermarks in the SquareTrade Seal, a visual symbol granted to e-commerce sites that demonstrate reliability and commitment to superior customer service. The Digimarc watermark and Digimarc's Media Commerce solutions will enable SquareTrade to communicate ownership of the image and provide links to additional information about SquareTrade's trust-building services including online dispute resolution to viewers who read the Seal with a Digimarc reader. Digimarc's image tracking service, MarcSpider, will help monitor when and where the Seal is used on the Web to gather usage information and identify potential misuse.

"The SquareTrade Seal fosters trust among online buyers and sellers. It symbolizes a company's commitment to serving customers reliably and fairly while also providing them a tool that in many cases acts as an extension of a company's customer service offering by helping customers resolve disputes that might occur in the regular course of doing business," said Steve Abernethy, president and CEO of SquareTrade. "Incorporating Digimarc's watermark technology into our Seal will allow us to better organize, distribute and monitor the usage of this image and significantly increase our ability to maintain the integrity of what the SquareTrade Seal stands for among buyers and sellers in the online community."

The SquareTrade Seal embedded with Digimarc's digital watermark will carry a unique Digimarc ID that can link to specific ownership and contact information when the watermark is read by a viewer. Whenever the SquareTrade Seal is opened or scanned into an application enabled with a Digimarc reader, the user is proactively notified - via a copyright symbol in the image's title bar - that the Seal is watermarked. Additional information about the Seal can be easily accessed across the Web. MarcSpider tracks the Seal across highly trafficked public areas of the Web to help SquareTrade determine whether the Seal is being used appropriately and with permission.

"As e-commerce activity continues its exponential growth, it becomes even more critical for businesses to build and maintain customer trust and loyalty in their ongoing relationships," said Reed Stager, vice president of Digimarc Media Commerce. "The SquareTrade Seal is given to only those sites that meet solid guidelines determined by SquareTrade. By embedding our digital watermarking technology into their Seal, we can help SquareTrade track and monitor usage to ensure their Seal is only displayed on approved sites."

The application of Digimarc watermark technology in SquareTrade Seal is an example of how Digimarc's innovative Media Commerce solutions can be used to support the needs of artists, creative professionals and enterprises protect their valuable digital content. Digimarc Media Commerce solutions employ patented, digital watermark technology that is used by hundreds of thousands of creative professionals and organizations around the world to track, manage and protect image, audio and video content while enabling e-commerce by connecting content to data, information and e-commerce opportunities across the Internet.

About SquareTrade
SquareTrade is the leading innovator in the development of a trust infrastructure for e-commerce transactions. SquareTrade addresses the all-important issue of building trust in e-business relationships, one of the essential enabling factors necessary to fully realize the power of the Internet and online commerce. The digitally watermarked SquareTrade Seal establishes an online seller's customer service track record, helps build buyer confidence and serves as the first line of defense against fraud. It is backed by SquareTrade's patent-pending, web-based dispute resolution service and SquareTrade's international network of more than 250 mediators and arbitrators. Founded in 1999, SquareTrade is based in San Francisco, Calif. For more information, employment opportunities or to contact a SquareTrade representative, visit www.squaretrade.com.

About Digimarc
Digimarc (NASDAQ: DMRC) is the world leader in digital watermark technology that allows imperceptible digital code to be embedded in any analog or digital media content for a wide variety of applications. The company has three business units. Digimarc Media Commerce solutions enable and facilitate e-commerce by connecting digital image, audio and video content to data, information and e-commerce opportunities across the Internet while allowing the tracking, management and protection of content. Digimarc Secure Documents works with governments and banks around the world to offer anti-counterfeiting solutions to deter forgery of valuable documents. Digimarc MediaBridge - a fundamentally new way to access the Internet - allows printed materials, such as magazine advertisements, to become direct portals to relevant destinations on the Internet. For more information about Digimarc, please visit our Web site at www.digimarc.com.

<* This release contains forward -looking statements that are subject to risks and uncertainties. Although Digimarc Corporation believes that the expectations reflected in its forward-looking statements are reasonable, actual results could differ materially from those expectations. Important cautionary statements and risk factors that would affect actual results are discussed in materials filed by Digimarc Corporation with the Securities and Exchange Commission.

Note: Digimarc is a registered trademark and MediaBridge is a trademark of Digimarc Corporation. All other trademarks are the property of their respective owners. a trademark of SquareTrade, Inc.