Exhibit 10.16  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: $100,000.00      Interest Rate:
6.75%; Default Rate: 13%    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 One Hundred Thousand & 00/100 Dollars ($100,000.00),
together with interest at the rate of 6.75% 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 thirteen percent (13%) per annum on the unpaid
principal balance until paid in full.  PAYMENT.
This is a single payment loan, with that payment due on June 30, 2006.  I agree to pay this loan in one principal
payment of $100,000 plus all interest that has accrued on the unpaid principal
balance at the rate set forth above. 
This payment is estimated to be $130,897.38 as of June 30, 2006.  Interest on the note is computed on a
365/365 simple interest basis; that is, by applying the ratio of the multiplied
by the actual number of days the principal balance is outstanding.  The Note also allows interest on interest,
in that the unpaid interest from each prior month is added to the unpaid
principal prior to the calculation of interest for the subsequent month.  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 show above or at such other place as Lender may designate in
writing.  If
Borrower voluntarily leaves the employment of Lender for any reason, or if
Borrower is terminated for just 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 term of this loan, interest shall be deemed to accrue
in conformity with Schedule A, which is attached to and made a part of hereof,
and which shall be deemed accurate and conclusive as to amounts of principal
interest that will 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.  PREPAYMENT.Borrower 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 Borrower of Borrowers obligation to continue to make payments under
the payment schedule.  Rather, early
payments will reduce the principal balance due and may result in Borrowers
making lower interest payments. 
Borrower agrees not to send Lender payments marked paid in full,
without recourse, or similar language. 
If Borrower sends such a payment, Lender may accept it without losing
any of Lenders right under this Note, and Borrower 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.  LATE
CHARGE.If a payment is 10 days or more late,
Borrower will be charged 5.000% of the regularly scheduled payment.  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 13.00% per annum.  The interest rate will not exceed the
maximum rate permitted by applicable law.  1 
    DEFAULT.Each of the following shall constitute an event of default (Event of
Default) under this Note: Payment Default.Borrower fails to make any payment when due under
this Note.  Other Defaults.Borrower fails to comply with or to perform any other
term, obligation, covenant or condition contained in this Note or in any of the
related documents or to comply with or to perform any term, obligation,
covenant or condition contained in any other agreement between Lender and
Borrower.  False Statements.Any warranty,
representation or statement made or furnished to Lender by Borrower or on
Borrowers 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
or becomes false or misleading at any time thereafter.  Death or Insolvency.The death of
Borrower, the insolvency of Borrower, the appointment of a receiver for any
part of Borrowers property, any assignment for the benefit of creditors, any
type of creditor workout, or the commencement of any proceeding under any
bankruptcy or insolvency laws by or against Borrower.  Creditor or Forfeiture Proceedings.Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor of Borrower or by any governmental agency against
any collateral securing the loan.  This
includes a garnishment of any of Borrowers accounts with Lender.  However, this Event of Default shall not
apply if there is a good faith dispute by Borrower as to the validity or
reasonableness of the claim which is the basis of the creditor or forfeiture
proceeding and if Borrower gives Lender written notice of the creditor or
forfeiture proceeding and deposits with Lender monies or a surety bond for the
creditor or forfeiture proceeding, in an amount determined by Lender, in its
sole discretion, as being an adequate reserve or bond for the dispute.  Adverse Change.A material
adverse change occurs in Borrowers 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 Borrower has 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 Borrower, 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 initiates steps
which Lender deems in Lenders sole discretion to be sufficient to cure the
default and thereafter continues and completes 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 Borrower will pay that amount.  ATTORNEYS
FEES; EXPENSES.Lender may hire or pay someone else to help
collect this Note if Borrower does not pay. 
Borrower 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, Borrower 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.  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 Borrower.  SUCCESSOR
INTERESTS.The terms of this Note shall be binding upon
Borrower, and upon Borrowers heirs, personal representatives, successors and
assigns, and shall inure to the benefit of Lender and its successors and
assigns.  GENERAL
PROVISIONS.Lender may delay or forgo enforcing any of
its rights or remedies under this Note without losing them.  Borrower 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.  UNDER
OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY US (LENDER) AFTER
OCTOBER 3, 1989 CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR
PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWERS
RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED TO BE
ENFORCEABLE.  PRIOR TO
SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS
NOTE.  BORROWER AGREES TO THE TERMS OF
THE NOTE.  BORROWER
ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.  BORROWER:    X /s/ Indraneel Paul Indraneel Paul, Individually   3