SAN DIEGO, CA, January 28, 2004 - ImageWare Systems, Inc. (AMEX: IW), a global provider of digital imaging, identification and biometric solutions, today announced that it received a purchase order for its EPI Builder® Software Developer’s Kit (SDK) from Digimarc Corporation (NASDAQ: DMRC), the leading supplier and integrator of secure media solutions used in high-end security, identification and digital media content applications. Digimarc will use ImageWare’s EPI Builder SDK to integrate certain card design and card rendering features into its implementation of the Florida Department of Highway Safety and Motor Vehicles’ new, state-of-the-art driver license system.

ImageWare’s EPI Builder SDK is a software developer’s kit that enables application developers, system integrators and OEMs to build custom identification solutions or incorporate sophisticated ID functionality into their existing applications. EPI Builder is designed specifically to facilitate the production of high-end, secure credential systems used for AAMVA-compliant driver licenses, ICAO-compliant travel documents, national IDs, voter registration and access control, among others.

“Based on our considerable experience implementing large-scale government ID programs, we are pleased to include ImageWare’s EPI Builder solution as an important tool that we will use in our implementation of the Florida driver license program,” said Indra Paul, president, Digimarc ID Systems. “It offers strong overall functionality that facilitates our ability to build custom solutions for our diverse clients.”

“We are delighted that Digimarc has chosen to incorporate ImageWare technologies into this project,” stated Joe Schuler, ImageWare’s senior vice president of sales and marketing. “We’ve been helping Digimarc deliver robust card design and rendering capabilities since 1999, and we look forward to working with them for this and other secure identification solutions worldwide.”

About ImageWare Systems, Inc.
ImageWare Systems, Inc. (AMEX:IW), is a leading developer and provider of identity management solutions, providing biometric, secure credential, law enforcement and digital imaging technologies. Scalable for worldwide deployment, the Company's biometric product line includes a multi-biometric engine that is hardware and algorithm independent, enabling the enrollment and management of unlimited population sizes. ImageWare's identification products are used to manage and issue secure credentials including national IDs, passports, driver licenses, smart cards and access control credentials. ImageWare's digital booking products provide law enforcement with integrated mug shot, fingerprint Livescan and investigative capabilities. The Company also provides comprehensive digital workflow solutions for the professional photography industry. ImageWare is headquartered in San Diego, with offices in Washington DC and Canada. For more information visit www.iwsinc.com.

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This news release may contain forward-looking statements made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. While these statements are meant to convey to the public the company's progress, business opportunities and growth prospects, readers are cautioned that such forward-looking statements represent management's opinion. While management believes such representation to be true and accurate based on the information available to the company, actual results may differ materially from those described. The company's operations and business prospects are always subject to risks and uncertainties. Important facts that may cause actual results to differ are set forth in the company’s periodic filings with the U.S. Securities and Exchange Commission.

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