Document Security Systems Announces the German Federal Patent Court Confirms Patent Validity

    ROCHESTER, N.Y., March 27 /CNW/ - Document Security Systems, Inc. (AMEX:  
DMC) ("DSS"), a leader in proven, patented protection against counterfeiting
and unauthorized copying, scanning and photo imaging, announced today that the
German Federal Patent Court (Bundespatentgericht) in Munich, Germany, ruled
that the Company's European Patent No 0455750B1 (the "Patent") is a valid
patent in Germany. The judgment is the outcome of a one-day hearing, which was
held earlier today.

    On August 1, 2005, DSS filed a patent infringement suit in the European
Court of First Instance against the European Central Bank alleging that the
Euro banknotes produced by the European Central Bank ("ECB") infringe DSS's
European Patent No 0455750B1 (the "Patent"). On March 24, 2006, DSS received
notice that the ECB had filed a claim to invalidity with the German Federal
Patent Court. DSS had received notice on March 24, 2006, of separate
counterclaim lawsuits in the United Kingdom and Luxembourg patent courts
seeking the invalidation of the Patent. Claims to invalidity, largely in the
same form, were also subsequently served in the Netherlands, Austria, Italy,
Spain, Belgium and France.

    Patrick White, Chairman and CEO of Document Security Systems, commented,
"This is a major victory for our shareholders as it substantiates the power of
our intellectual property portfolio. We thank the Bundespatentgericht, which
resides in the home country of the European Central Bank, for its efforts in
this complex case, and we also appreciate the work of our attorneys, McDermott
Will & Emery and Becker - Kurig - Straus. Our Patent has been deemed valid and
we will be able to proceed with the infringement phase of our lawsuit against
the ECB, despite decisions to the contrary regarding validity of the Patent in
other national courts."

    Mr. White added, "With the confirmation by the German Federal Patent
Court of our Patent's validity, we hope to work with all European Union
nations and their security printers to identify opportunities for partnerships
that will ensure optimum security for the protection of their negotiable
instruments, including with our newer and more effective technologies."

    This ruling also will enable DSS to pursue infringement claims of the
Patent against security printers and software developers of the various bank
notes printed not only in Germany, but also those notes printed in other
European countries that are used in Germany.

    Mr. White concluded, "We are pleased with this win, however, it is
important to note that we have greatly improved upon the technology covered by
this Patent since its issuance in 1991. Our suite of technologically more
sophisticated products can significantly upgrade protection against modern
counterfeiters. We will continue to drive our research and development efforts
to provide customized solutions for companies and organizations around the

    About Document Security Systems, Inc.

    A rapidly growing security technology company, Document Security Systems
is a world leader in the development of optical deterrent technologies that
help prevent counterfeiting and brand fraud from the use of the most advanced
scanners, copiers and imaging systems in the market. The Company's nine
patents and 19 patents-pending covering over 30 technologies and products
protect valuable documents and printed products from counterfeiters and
identity thieves. Document Security Systems' customers, which include
international governments, major corporations and world financial
institutions, use its covert and overt technologies to protect a number of
applications including, but not limited to, currency, vital records, brand
protection, ID cards, internet commerce, passports and gift certificates.
Document Security Systems' strategy is to become the world's leading producer
of cutting-edge security technologies for paper, plastic and electronically
generated printed assets. More information about Document Security Systems can
be found at its websites: and

    Safe Harbor Statement

    This release contains forward-looking statements regarding expectations
for future financial performance, which involve uncertainty and risk. It is
possible the Company's future financial performance may differ from
expectations due to a variety of factors including, but not limited to,
changes in economic and business conditions in the world, increased
competitive activity, achieving sales levels to fulfill revenue expectations,
consolidation among its competitors and customers, technology advancements,
unexpected costs and charges, adequate funding for plans, changes in interest
and foreign exchange rates, regulatory and other approvals and failure to
implement all plans, for whatever reason. It is not possible to foresee or
identify all such factors. Any forward-looking statements in this report are
based on current conditions, expected future developments and other factors
which the Company believes are appropriate in the circumstances. Prospective
investors are cautioned that such statements are not a guarantee of future
performance and actual results or developments may differ materially from
those projected. The Company makes no commitment to update any forward-looking
statement included herein, or disclose any facts, events or circumstances that
may affect the accuracy of any forward-looking statement.

For further information:

For further information: Investors: Kei Advisors LLC Deborah K.
Pawlowski, 716-843-3908 or Media: Dixon Schwabl
Advertising Kim Waver, 585-899-3273

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