In a move to bolster security around its driver’s licenses, Washington awarded Digimarc Corp. a $10 million, three-year contract extension to upgrade the state’s licenses and the processes and equipment used to create them.

Terms of the contract call for Digimarc of Beaverton, Ore., to install its new camera system in all 65 offices of the Washington Department of Licensing. The higher quality photos will make fraud and identity theft more difficult, Digimarc said.

The company also will upgrade software in the state’s driver’s license enrollment and issuance system. The software will give the state flexibility to incorporate new, secure identification applications as set by future regulations.

The contract also calls for Digimarc to incorporate a host of security features into the state’s driver’s licenses. They include machine-readable digital watermarks that would let authorities both in Washington and in other states authenticate the license.

Digital watermark security is used in more than 40 percent of all U.S. drivers’ licenses, the company said.

Digimarc has about 400 employees and 2005 fiscal revenue of $101.1 million, according to Hoover’s Online of Austin, Texas.