UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

*

Beneficial ownership of the common stock, par value $0.001 per share (“Common Stock”), of Digimarc Corporation, a Delaware corporation (the “Company”), referred to herein is being reported hereunder solely because the reporting person may be deemed to have beneficial ownership of such Common Stock as a result of the Amended and Restated Support Agreements described in Items 3 and 4 hereof. Neither the filing of this Amendment to Schedule 13D nor any of its contents shall be deemed to constitute an admission by the reporting person that it is the beneficial owner of any Common Stock referred to herein for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or for any other purpose, and such beneficial ownership is expressly disclaimed. The reported beneficial ownership is comprised of (i) 859,276 shares of Common Stock (including restricted stock) that are subject to the Amended and Restated Support Agreements and (ii) stock options which, if 100% exercised, would entitle the holders thereof to acquire 2,454,395 shares of Common Stock (“Option Shares”) that are subject to the Amended and Restated Support Agreements. 1,330,250 of such Option Shares are the subject of stock options that have exercise prices higher than $11.90, the per share amount (the “Offer Price”) to be paid to stockholders of the Company who tender their shares pursuant to the Offer to Purchase, dated July 3, 2008, by Dolomite Acquisition Co., a Delaware corporation (“Merger Sub”), for all outstanding shares of Common Stock of the Company (“Out of the Money Options Shares”). 1,124,145 of such Option Shares are the subject of stock options that have exercise prices lower than the Offer Price (“In the Money Options Shares”). The number of shares of Common Stock (including restricted stock) subject to the Amended and Restated Support Agreements and the number of In the Money Option Shares subject to the Amended and Restated Support Agreements reflect, in the aggregate, approximately 8.39% of the beneficial ownership of the Company.

**

The calculation of the percentage is based on  22,508,617 shares of Common Stock (including restricted stock) issued and outstanding as of June 27, 2008, which number is based on the representations made by the Company in the Amended and Restated Agreement and Plan of Merger described in Items 3 and 4 hereof, plus 2,454,395 Option Shares that are subject to the Amended and Restated Support Agreements.

Item 1.

Security and Issuer

This Amendment No. 1 (the “Amendment”) amends and supplements the Statement on Schedule 13D originally filed with the Securities and Exchange Commission (the “SEC”) on April 2, 2008 (the “Schedule 13D”), with respect to the Common Stock of the Company.  The Company’s principal executive offices are located at 9405 S.W. Gemini Drive, Beaverton, Oregon 97008.  Capitalized terms used but not defined herein shall have the meanings attributed to them in the Schedule 13D.

Item 3.

Source and Amount of Funds or Other Consideration

Item 3 is amended and restated in its entirety as follows:

In connection with the Amended and Restated Agreement and Plan of Merger, dated as of June 29, 2008, by and among the Company, L-1 and Merger Sub (the “Merger Agreement”) described in Item 4, as a condition to the willingness of L-1 and Merger Sub to enter into the Merger Agreement, and as an inducement and in consideration therefor, L-1 and Merger Sub entered into Amended and Restated Support Agreements (each, a “Support Agreement,” and collectively, the “Support Agreements”) with each of Robert Chamness, Bruce Davis, Robert Eckel, Michael McConnell, Philip Monego, Sr. and Reed Stager (each, a “Stockholder,” and collectively, the “Stockholders”).  By reason of L-1’s entering into the Support Agreements with the Stockholders, and by reason of the irrevocable proxy and commitment by the Stockholders to tender their respective shares of Common Stock contained therein, L-1 may be deemed to have acquired beneficial ownership of the shares of Common Stock that are the subject of the Support Agreements.  L-1 anticipates that it will fund the transactions contemplated by the Support Agreements and the Merger Agreement through a combination of cash, debt financing and equity financing.  For a more detailed description of the Support Agreements, see Item 4 below, which description is incorporated herein by reference in response to this Item 3.

Item 4.

Purpose of Transaction

Item 4 is amended and restated in its entirety as follows:

Amended and Restated Merger Agreement

On June 29, 2008, the Company entered into the Amended and Restated Agreement and Plan of Merger with L-1 and Merger Sub.  Pursuant to the Merger Agreement, and subject to the terms and conditions set forth therein, L-1 and Merger Sub commenced a cash tender offer (the “Offer”) to purchase all of the issued and outstanding Common Stock of the Company at the Offer Price of $11.90 per share on July 3, 2008.  The Offer Price is subject to adjustment based on the total number of shares of Common Stock outstanding after giving effect to the exercise of options to purchase shares of Common Stock on the Spin-Off Record Date (as defined below).  The aggregate Offer Price, which does not include the value attributable to the Spin-Off (as defined below) is $310 million.

The Offer, which is expected to close in August 2008, is conditioned upon, among other things, the satisfaction of a minimum tender condition and the completion of the Spin-Off or the Trust Transfer (as defined below).  Prior to the completion of the Offer, the Company will contribute all of the assets and liabilities related to its digital watermarking business, together with all of the Company’s cash, to a wholly-owned subsidiary of the Company (“DMRC LLC”), the limited liability company interests of which will be (i) distributed to holders of shares of Common Stock on the Spin-Off Record Date in a taxable spin-off (the “Spin-Off”) upon effectiveness of a registration statement on Form 10 (the “Form

10”) filed in connection with the Spin-Off, or (ii) pending effectiveness of the Form 10, transferred to a newly-created trust for the benefit of such stockholders of the Company (the “Trust Transfer”).  Following the Spin-Off or the Trust Transfer, DMRC LLC will merge with and into its wholly-owned subsidiary (“DMRC Corporation”), and each limited liability company interest of DMRC LLC will be converted into one share of common stock of DMRC Corporation.  If the Trust Transfer occurs, the trust will distribute shares of DMRC Corporation common stock to holders who held shares of Common Stock on the Spin-Off Record Date, upon effectiveness of the Form 10, which DMRC Corporation filed with the SEC on June 23, 2008.  Pursuant to the Merger Agreement, as soon as practicable after the completion of the Offer and subject to certain conditions, including those described above, Merger Sub will merge with and into the Company and the Company will continue as the surviving corporation and a wholly-owned subsidiary of L-1 (the “Merger”). 

On or immediately prior to the record date for the entitlement to a distribution of DMRC LLC limited liability company interests in connection with the Spin-Off (the “Spin-Off Record Date”), all outstanding Company stock options will fully vest and become exercisable.  Holders of Company stock options will be given the opportunity to exercise such stock options, and thereby to become stockholders of the Company, entitled to receive the Offer Price in connection with the Merger and, for stock options exercised prior to the Spin-Off Record Date, the distribution of DMRC LLC limited liability company interests in connection with the Spin-Off.  All Company stock options that are not exercised or cancelled prior to the effective time of the Merger will be cancelled and null and void as of the effective time of the Merger.

On or immediately prior to the Spin-Off Record Date, all outstanding shares of Company restricted stock will fully vest and the holders will be entitled to receive the Offer Price in connection with the Merger and the distribution of DMRC LLC limited liability company interests in connection with the Spin-Off.

At the effective time of the Merger and as a result of the Merger, each share of Common Stock issued and outstanding immediately prior to the effective time of the Merger will be cancelled and extinguished and automatically converted into the right to receive the Offer Price.

Upon consummation of the Merger, the directors and officers of Merger Sub immediately prior to the effective time of the Merger will be the initial directors and officers of the surviving corporation.

Following the consummation of the Merger, L-1 intends that the Common Stock will be deregistered under the Exchange Act, and delisted from the NASDAQ Global Market.

Amended and Restated Support Agreements

As noted in Item 3 above, in connection with the Merger Agreement, as a condition to the willingness of L-1 and Merger Sub to enter into the Merger Agreement, and as an inducement and in consideration therefor, L-1 and Merger Sub entered into the Support Agreements with the Stockholders.  Pursuant to his respective Support Agreement, each Stockholder has agreed to, (i) as promptly as practicable and in any event within 10 business days of the commencement of the Offer, validly tender all of his shares of Common Stock pursuant to and in accordance with the terms of the Offer and (ii) not withdraw any of his shares of Common Stock tendered pursuant to the Offer.  In addition, each Stockholder has agreed at any meeting (or any action by written consent in lieu of a meeting) of the stockholders of the Company or any adjournment or postponement thereof, and on every action or approval by written consent of the stockholders of the Company, to vote all shares of Common Stock beneficially owned by the Stockholder (or to cause them to be voted) or (as appropriate) execute written consents in respect thereof: (i) in favor of the adoption of the Merger Agreement and approval of the transactions contemplated thereby, (ii) in favor of the Spin-Off and associated restructuring (to the extent

to be voted upon by the Company’s stockholders), (iii) against any agreement (including, without limitation, any amendment of any agreement), amendment of the Company’s organizational documents or other action that is intended or could reasonably be expected to prevent, impede, interfere with, materially delay, postpone or discourage the consummation of the Merger and (iv) against any takeover proposal.  The Support Agreements shall terminate on the first to occur of (i) the written consent of L-1, Merger Sub and such Stockholder to terminate his respective Support Agreement, (ii) the termination of the Merger Agreement in accordance with its terms, (iii) the acceptance by L-1 or Merger Sub of such Stockholder’s respective shares of Common Stock tendered pursuant to the Offer and (iv) the effective time of the Merger.

Pursuant to his respective Support Agreement, each Stockholder irrevocably appointed each executive officer of L-1 as the Stockholder’s attorney-in-fact and proxy, with full power of substitution, to vote, express consent or dissent, or otherwise to exercise all voting and related rights with respect to such Stockholder’s shares at every annual, special or adjourned meeting of the stockholders of the Company, and in every written consent in lieu of any such meeting, to the extent described above.

Other than as described above, L-1 has no plans or proposals which relate to, or may result in, any of the matters described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.

The summaries of the Merger Agreement and the Support Agreements contained in this Item 4 are qualified in their entirety by reference to the Merger Agreement and the Support Agreements, each of which is incorporated herein by reference.  Copies of the Merger Agreement and Form of Support Agreement were filed with the SEC on July 3, 2008, as Exhibits 2.1 and 10.1, respectively, to L-1’s Current Report on Form 8-K.

Item 5.

Interest in Securities of the Issuer

Item 5 is amended and restated in its entirety as follows:

(a)           Pursuant to the Support Agreements, L-1 may be deemed to beneficially own 3,482,943 shares of Common Stock, which represents 13.27% of the beneficial ownership of the Company, which is calculated based on a total of 22,508,617 shares of Common Stock issued and outstanding as of June 27, 2008, which number of total outstanding shares is based on the representations made by the Company in the Merger Agreement, plus 2,454,395 Option Shares that are subject to the Support Agreements.  The reported beneficial ownership is comprised of (i) 859,276 shares of Common Stock (including restricted stock) that are subject to the Support Agreements and (ii) 2,454,395 Option Shares that are subject to the Support Agreements.  1,330,250 of such Option Shares are Out of the Money Options Shares and 1,124,145 of such Option Shares are In the Money Options Shares.  The number of shares of Common Stock (including restricted stock) subject to the Support Agreements and the number of In the Money Option Shares subject to the Support Agreements reflect, in the aggregate, approximately 8.39% of the beneficial ownership of the Company.  Neither the filing of this Statement nor any of its contents shall be deemed to constitute an admission by L-1 that it is the beneficial owner of any Common Stock referred to herein for purposes of the Exchange Act, or for any other purpose, and such beneficial ownership is expressly disclaimed.

(b)           Pursuant to the Support Agreements and the limited proxies granted therein, L-1 may be deemed to have shared power to vote 3,313,671 shares of Common Stock held beneficially by the Stockholders.

(c)           Neither L-1 nor, to the knowledge of L-1, any of the Schedule 1 Persons, has effected any transaction in the Common Stock during the past 60 days.

(d)           The Stockholders are the record owners of the shares of Common Stock covered by the Support Agreements that L-1 may be deemed to beneficially own.  Each Stockholder has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Common Stock covered by his respective Support Agreement.

(e)           Not applicable.

Item 7.

Material to be Filed as Exhibits

1.                                                                                       Amended and Restated Agreement and Plan of Merger, dated as of June 29, 2008, by and among L-1 Identity Solutions, Inc., Dolomite Acquisition Co. and Digimarc Corporation (incorporated by reference to Exhibit 2.1 to L-1’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on July 3, 2008)

2.                                                                                       Form of Amended and Restated Support Agreement (incorporated by reference to Exhibit 10.1 to L-1’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on July 3, 2008)

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L-1 IDENTITY SOLUTIONS, INC.

By:

/s/ Robert V. LaPenta

Robert V. LaPenta

Chairman, Chief Executive Officer and President

Directors

Name

Present Principal Occupation or Employment

Robert V. LaPenta

Chairman; President and Chief Executive Officer of L-1

B.G. Beck

Director; Member of the board of directors of Cardinal Financial Corporation

Denis K. Berube

Director; Executive Vice President and Chief Operating Officer of Lau Technologies(1)

Milton E. Cooper

Director; Retired

Robert S. Gelbard

Director; Chairman of Washington Global Partners, LLC(2)

Malcolm J. Gudis

Director; Chancellor of the board of trustees of The Episcopal School of Dallas

John E. Lawler

Director; President of East/West Financial Services, Inc.; Co-founder and Chief Executive Officer of Sterling Wealth Management, Inc.(3)

James M. Loy

Director; Senior Counselor at The Cohen Group(4)

Harriet Mouchly-Weiss

Director; Founder and Managing Partner of Strategy XXI, Ltd. (5)

Peter Nessen

Director; President of Nessen Associates Ltd.(6)

B. Boykin Rose

Director; Appointee to South Carolina Education Lottery Commission

Executive Officers
(Who Are Not Directors)

Name

Present Principal Occupation or Employment

Joseph Atick

Executive Vice President, Chief Strategy Officer

James A. DePalma

Executive Vice President, Chief Financial Officer and Treasurer

Doni L. Fordyce

Executive Vice President, Corporate Communications

Mark S. Molina

Executive Vice President, Chief Legal Officer and Secretary

Joseph Paresi

Executive Vice President, Chief Marketing Officer

Vincent A. D’Angelo

Senior Vice President, Finance, and Chief Accounting Officer