Digimarc Corporation - Securities Class Action

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_______________
Copyright (c) 2001
Stanford Law School

Digimarc Corporation Conclusion: According to the Company’s FORM 10-Q for the quarterly period ended September 30, 2007, the district court directed that the litigation proceed within a number of "focus cases" rather than in all of the 310 cases that have been consolidated. The Company's case is not one of these focus cases. On October 13, 2004, the district court certified the focus cases as class actions. The underwriter defendants appealed that ruling, and on December 5, 2006, the Court of Appeals for the Second Circuit reversed the district court's class certification decision. On April 6, 2007, the Second Circuit denied plaintiffs' petition for rehearing. In light of the Second Circuit opinion, the Company has informed the district court that this settlement cannot be approved because the defined settlement class, like the litigation class, cannot be certified. The Company cannot predict whether the Company will be able to renegotiate a settlement that complies with the Second Circuit's mandate. Due to the inherent uncertainties of litigation, the Company cannot accurately predict the ultimate outcome of the matter.

As summarized by the Company’s FORM 10-Q for the quarterly period ended March 31, 2006, beginning in May 2001, a number of substantially identical class action complaints alleging violations of the federal securities laws were filed in the United States District Court for the Southern District of New York naming approximately 300 companies, including the Company, certain of its officers and directors, and certain underwriters of the Company’s initial public offering as defendants. The complaints have since been consolidated into a single action, and a consolidated amended complaint was filed in April 2002. The individual officer and director defendants entered into tolling agreements and, pursuant to a court order dated October 9, 2002, were dismissed from the litigation without prejudice. Furthermore, in July 2002, the Company and the other defendants in the consolidated cases filed motions to dismiss the amended complaint for failure to state a claim. The motion to dismiss claims under Section 11 was denied as to virtually all the defendants in the consolidated actions, including the Company. The claims against the Company under Section 10(b), however, were dismissed. In June 2003, a committee of the Company’s board of directors conditionally approved a proposed partial settlement with the plaintiffs in this matter. In June 2004, an agreement of settlement was submitted to the court for preliminary approval. The settlement would provide, among other things, a release of the Company and of the individual defendants for the conduct alleged in the amended complaint to be wrongful. The Company would agree to undertake other responsibilities under the partial settlement, including agreeing to assign away, not assert, or release certain potential claims the Company may have against its underwriters. Any direct financial impact of the proposed settlement (other than defense costs incurred and expensed prior to May 31, 2003) is expected to be borne by the Company’s insurers. The court granted the preliminary approval motion on February 15, 2005, subject to certain modifications. On August 31, 2005, the court issued a preliminary order further approving the modifications to the settlement and certifying the settlement classes. The court also appointed the Notice Administrator for the settlement and ordered that notice of the settlement be distributed to all settlement class members beginning on November 15, 2005 and completed by January 15, 2006. The settlement fairness hearing was held on April 26, 2006, but the court has not yet rendered its decision. If the court determines that the settlement is fair to the class members, the settlement will be approved.

Several complaints have been filed against Digimarc Corporation. The complaints allege various improper practices by certain of Digimarc's officers and directors, and one of their lead underwriters, BancBoston Robertson Stephens. The complaints allege violations of the Securities Act of 1933, under Section 11, 12 and 15; Section 1-(b) and 20(a) of the Securities Exchange Act of 1934, as well as Rule 10b-5. The also allege that certain of Digimarc's officers, directors, and BancBoston issued and sold Digimarc common stock in it's IPO without disclosing to investors that BancBoston had solicited and received excessive and undisclosed commissions from certain investors. They further allege that the Registration Statement filed with the SEC contained misstatements regarding the commissions the underwriters would derive from the IPO.

INDUSTRY CLASSIFICATION:
SIC Code: 7373
Sector: Technology
Industry: Software & Programming

COMPANY/ISSUER NAME:	Digimarc Corporation
COMPANY/ISSUER TICKER:	DMRC
COMPANY WEBSITE:	http://www.digimarc.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Morris Kassin, et al. v. Digimarc Corporation. et al.

COURT: S.D. New York	DOCKET NUMBER: 01-CV-3792
JUDGE NAME: Hon. John G. Koeltl
DATE FILED: 05/03/2001	SOURCE: Business Wires
CLASS PERIOD START: 12/01/1999	CLASS PERIOD END: 03/12/2001
TYPE OF COMPLAINT: Unamended/Unconsolidated
PLAINTIFF FIRMS IN THIS OR SIMILAR CASE:
Lovell & Stewart 500 Fifth Avenue, New York, NY, 10110 (voice) 212.608.1900, (fax) 212.719.4677, sklovell@aol.com Sirota & Sirota LLP 110 Wall Street 21st Floor, New York, NY, 10005 (voice) 888.759.2990, (fax) 212.425.9093, Info@SirotaLaw.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 2

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint
Type: Complaint		Date on the document: 05/03/2001

REFERENCE COMPLAINT

In Re Digimarc Corporation Initial Public Offering Securities Litigation

COURT: S.D. New York	DOCKET NUMBER: 01-CV-3792
JUDGE NAME: Hon. Shira A. Scheindlin
DATE FILED: 04/19/2002	SOURCE: Business Wires
CLASS PERIOD START: 12/01/1999	CLASS PERIOD END: 12/06/2000
TYPE OF COMPLAINT: Consolidated and/or Amended
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Bernstein Liebhard & Lifshitz LLP (New York, NY) 10 E. 40th Street, 22nd Floor, New York, NY, 10016 (voice) 800.217.1522, (fax) , info@bernlieb.com Milberg Weiss Bershad Hynes & Lerach LLP (New York, NY) One Pennsylvania Plaza, New York, NY, 10119-1065 (voice) 212.594.5300, (fax) , Schiffrin & Barroway LLP 3 Bala Plaza E, Bala Cynwyd, PA, 19004 (voice) 610.667.7706, (fax) 610.667.7056, info@sbclasslaw.com Sirota & Sirota LLP 110 Wall Street 21st Floor, New York, NY, 10005 (voice) 888.759.2990, (fax) 212.425.9093, Info@SirotaLaw.com Stull, Stull & Brody (New York) 6 East 45th Street, New York, NY, 10017 (voice) 310.209.2468, (fax) 310.209.2087, SSBNY@aol.com Wolf Haldenstein Adler Freeman & Herz LLP 270 Madison Avenue, New York, NY, 10016 (voice) 212.545.4600, (fax) 212.686.0114, newyork@whafh.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 6

DOCUMENTS FOR THE REFERENCE COMPLAINT
Consolidated Amended Class Action Complaint For Violations Of The Federal Securities Laws
Type: Complaint		Date on the document: 04/19/2002
U.S. District Court Civil Docket
Type: Docket		Date on the document: 09/30/2004
U.S. District Court Civil Docket
Type: Docket		Date on the document: 06/28/2007

OTHER DOCUMENTS

Case Name and/or Number:
Type:		Date on the document:

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