Exhibit 10.17  PROMISSORY
NOTE 
  Borrower:
  
  Lender:Indraneel
  Paul
  
  Digimarc
  Corporationc/o
  Digimarc ID Systems, LLC
  
  19801
  SW 72nd Ave, Suite 100201
  Burlington Road
  
  Tualatin,
  OR  97062Bedford,
  Massachusetts 01730  Principal
Amount: $260,000.00      Interest Rate:
4.99%; Default Rate: 10%    Date of Note:
July 1, 2002  PROMISE
TO PAY. I, Indraneel Paul (Borrower), promise to pay to Digimarc Corporation
(Lender) or order, in lawful money of the United States of America, the
principal amount of Two Hundred Sixty Thousand & 00/100 Dollars
($260,000.00), together with interest at the rate of 4.99% per annum on the
unpaid principal balance from July 1, 2002, until paid in full.  After maturity or in the event of
termination for cause or default, at which time all remaining and unpaid
principal shall be due, I agree to pay interest at a default rate of ten
percent (10%) per annum on the unpaid principal balance until paid in full.  PAYMENT.
Payments of principal and interest on this loan will be forgiven on a pro-rata
basis over a term of four years as long as Borrower remains a full-time
employee of Lender, and the loan will be forgiven in full if Lender terminates
Borrower for any reason other than just cause.  If Borrower voluntarily leaves the employment of Lender for any
reason, or if Borrower is terminated for cause, then the outstanding balance
of the loan shall accelerate and the Borrower will be responsible for paying
the outstanding principal balance, plus any interest that is accrued and unpaid,
in full within 90 days of the date of his departure.  During the period for which payments on the loan are forgiven,
principal and imputed interest shall be deemed to amortize in conformity with
Schedule A, which is attached to and made a part hereof, and which shall be
deemed accurate and conclusive as to amount of principal and interest that
either have amortized or that would be due and payable at any time.  For purposes of this Note, termination for
cause means termination for unlawful or unethical conduct or for any material
violation of the terms of Borrowers employment with Lender.  Borrower
acknowledges that the net benefit of the transaction will be taxable to
Borrower. The amount owed will be affected by the rate at which the loan amount
(plus interest) is forgiven. On an annual basis, within 30 days after the close
of each calendar year, Lender will provide a check to Borrower intended to
compensate Borrower for the approximate net benefit of the transaction at a
rate of 28% for federal taxes and 9% for state taxes, in the amounts set forth
in the attached Schedule A.  Borrower
agrees that Borrower will be responsible for any incremental income taxes.  If I am
required to make payments under this loan for any reason, unless otherwise
agreed or required by applicable law, payments will be applied first to any
unpaid collection costs and any late charges, then to any unpaid interest, and
any remaining amount to principal.  I
will pay Lender at Lenders address shown above or at such other place as Lender
may designate in writing.  PREPAYMENT.I may pay without penalty all or a
portion of the amount owed earlier than it is due.  Early payments will not, unless agreed to by Lender in writing,
relieve me of my obligation to continue to make payments under the payment
schedule.  Rather, early payments will
reduce the principal and interest balance due. 
I agree no to send Lender payments marked paid in full, without
recourse, or similar language.  If I
send such a payment, Lender may accept it without losing any of Lenders right
under this Note, and I will remain obligated to pay any further amount owed to
Lender.  All written communications
concerning disputed amounts, including any check or other payment instrument
that indicates that the payment constitutes payment in full of the amount
owed or that is tendered with other conditions or limitations or as full
satisfaction of a disputed amount, must be mailed or delivered to: Digimarc
Corporation, 19801 SW 72nd Ave., Suite 100, Tualatin, OR  97062.  INTEREST
AFTER DEFAULT.Upon default, including failure to pay upon
final maturity, Lender, at its option, may, if permitted under applicable law,
increase the interest rate on this Note to 10.00% per annum.  The interest rate will not exceed the maximum
rate permitted by applicable law.   1 
    DEFAULT.I will be in default under this Note if any of the following happen:  Payment Default.I fail to make any payment when due under this Note.  Break Other Promises.I break any
promise made to Lender or fail to perform promptly at the time and strictly in
the manner provided in this Note or in any agreement related to this Note, or
in any other agreement or loan I have with Lender.  False Statements.Any representation
or statement made or furnished to Lender by me or on my behalf under this Note
or the related documents is false or misleading in any material respect, either
now or at the time made or furnished.  Death or Insolvency.I die or
become insolvent; a receiver is appointed for any part of my property; I make
an assignment for the benefit of creditors; or any proceeding is commenced
either by me or against me under any bankruptcy or insolvency laws.  Taking of the Property.Any creditor or governmental agency tries to take any
of the property or any other of my property in which Lender has a lien.  This includes taking of, garnishing of or
levying on my accounts with Lender. However, if I dispute in good faith whether
the claim on which the taking of the property is based is valid or reasonable,
and if I give Lender written notice of the claim and furnish Lender with monies
or a surety bond satisfactory to Lender to satisfy the claim, then this default
provision will not apply.  Adverse Change.A material
adverse change occurs in my financial condition, or Lender believes the
prospect of payment or performance of this Note is impaired.  Cure Provisions.If any
default, other than a default in payment, is curable and if I have not been
given a notice of a breach of the same provision of this Note within the
preceding twelve (12) months, it may be cured (and no event of default will
have occurred) if I, after receiving written notice from Lender demanding cure
of such default: (1) cures the default within fifteen (15) days; or (2) if the
cure requires more than fifteen (15) days, immediately initiate steps which
Lender deems in Lenders sole discretion to be sufficient to cure the default
and thereafter continue and complete all reasonable and necessary steps
sufficient to produce compliance as soon as reasonably practical.  LENDERS
RIGHTS.Upon default, Lender may declare the entire
unpaid principal balance on this Note and all accrued unpaid interest
immediately due, and then I will pay that amount.  ATTORNEYS
FEES; EXPENSES.Lender may hire or pay someone else to help
collect this Note if I do not pay.  I
will pay Lender that amount.  This
includes, subject to any limits under applicable law, Lenders attorneys fees
and Lenders legal expenses, whether or not there is a lawsuit, including
attorneys fees, expenses for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), and appeals.  If not prohibited by applicable law, I also
will pay any court costs, in addition to all other sums provided by law.  GOVERNING
LAW.  This Note will be governed by,
construed and enforced in accordance with federal law and the law of the State
of Oregon.  This Note has been accepted
by Lender in the State of Oregon.  CHOICE
OF VENUE.  If there is a lawsuit,
Borrower agrees upon Lenders request to submit to the jurisdiction of the
courts of Multnomah County, State of Oregon.  SUCCESSOR
INTERESTS.The terms of this Note shall be binding upon
me, and upon my heirs, personal representatives, successors and assigns, and
shall inure to the benefit of Lender and its successors and assigns.  RIGHT OF
SETOFF.To the extent permitted by applicable law,
Lender reserves a right of setoff in all amounts that Lender may owe Borrower,
including salary or reimbursements, in the event that this loan remains unpaid
after termination of cause or payment default. 
However, this right does not include any IRA or any trust accounts, for   2 
    which setoff would be prohibited by law. Borrower authorizes Lender, to
the extent permitted by applicable law, to charge or setoff all sums owing on
the debt against any and all such owed by Lender or me.  GENERAL
PROVISIONS.Lender may delay or forgo enforcing any of
its rights or remedies under this Note without losing them.  I and any other person who signs,
guarantees, or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, and notice of dishonor.  Upon any change in the terms of this Note,
and unless otherwise expressly stated in writing, no party who signs this Note,
whether as maker, guarantor, accommodation maker or endorser, shall be released
from liability.  All such parties agree
that Lender may renew or extend (repeatedly and for any length of time) this
loan or release any party or guarantor or collateral; or impair, fail to
realize upon or perfect Lenders security interest in the collateral; and take
any other action deemed necessary by Lender without the consent of or notice to
anyone other than the party with whom the modification is made.  The obligations under this Note are joint
and several.  This means that the words
I, me, and my mean each and all of the persons signing below.  PRIOR TO
SIGNING THIS NOTE, I READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE.  I AGREE TO THE TERMS OF THE NOTE.  I
ACKNOWLEDGE RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.  BORROWER:    X /s/ Indraneel Paul Indraneel Paul, Individually    3