SecProbe.io

February 24, 2011

Via Email

Patrick White Chief Executive Officer
Document Security Systems, Inc.
28 Main Street East, Suite 1525 Rochester, New York 14614
Re: Document Security Systems, Inc.
  Registration Statement on Form S-3
Filed January 28, 2011
 File No. 333-171940

Dear Mr. White:
 We have limited our review of your registra tion statement to those issues we have
addressed in our comments.  In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure.
 Please respond to this letter by amending your registration statement and providing the
requested information.  Where you do not beli eve our comments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
 After reviewing any amendment to your re gistration statement and the information you
provide in response to these comments, we may have additional comments.

General

 1. In your Form 8-K filed on January 5, 2011, you state that the unregistered sale of
securities to Fletcher In ternational, Ltd. was made in reliance upon Rule 506 and
Section 4(2) of the Securities Act of 1933.  Y ou do not appear to have filed a Form D in
connection with the offering.  Please file a Form D electronically, or tell us in your
response letter why no such filing is requi red.  See Rule 503 of Regulation D, SEC
Release No. 33-8891, and the additional guidance provide d by the Division of
Corporation Finance at: http://www.sec.gov/divisions/corpfin/formdfiling.htm
 and
http://www.sec.gov/info/smallbus/secg/formdguide.htm .

Patrick White Document Security Systems, Inc. February 24, 2011 Page 2

 Facing Sheet of Registration Statement

 2. We note your reference to Securities Act Rule 41 6 in footnote 1 to the fee table.  Please
note that you may not rely on Rule 416 to regi ster for resale an indeterminate number of
shares of common stock that you may i ssue under a conversion formula based on
fluctuating market prices; you must register for resale the maximu m number of shares
that you think you may issue on conversion, based on a good-faith estimate and, if the
estimate turns out to be insufficient, you must file a new registration statement to register
the additional shares for resale.  For guidan ce, refer to Question 213.02 of the Division of
Corporation Finance’s Compliance and Disclo sure Interpretations of Securities Act
Rules.  Please confirm your unde rstanding in your response letter.
 Risk Factors, page 6

 “We have a significant amount of indebtedness…,” page 6

 3. You state that you have not made  interest payments on the cred it facility and have had to
obtain a default waiver in the past, includi ng as of September 30, 2010.  In your response
letter, please provide us with a detailed analysis supporting your eligibility to use
Form S-3, focusing on whether any such defaults , in the aggregate, are material to the
financial position of your company and its cons olidated and unconsolidated subsidiaries,
taken as a whole.  See General Instruction I.A.5 of Form S-3 and refer to the guidance
provided by Questions 115.10 and 115.12 of th e Division of Corporation Finance’s
Compliance and Disclosure Interpre tations of Securities Act Forms.
 Selling Stockholder, page 12

 4. Please revise to identify the person or pers ons who have voting or investment control
over your securities that are owne d by the selling security holde r.  For guidance, refer to
Question 140.02 of the Division of Corporat ion Finance’s Compliance and Disclosure
Interpretations of Regulation S-K.
 5. It appears that the selling secu rity holder is not registering a ll of the shares it owns in the
offering.  If correct, please revi se the table to disclose the amount and (if one percent or
more) the percentage of the class to be owne d by such security holder after completion of
the offering.  See Item 507 of Regulation S-K.
 Documents Incorporated by Reference, page 16

 6. Please consider revising this section to add language stating that al l filings made by you
pursuant to the Exchange Act after the date of  the initial registration statement and prior
to effectiveness of the registration statemen t shall be deemed to be incorporated by
reference into the prospectus.  For guidan ce, refer to Question 123.05 of the Division of

Patrick White Document Security Systems, Inc. February 24, 2011 Page 3

 Corporation Finance’s Compliance and Disclo sure Interpretations of Securities Act
Forms.
 Undertakings, page 20

 7. The language following undertaking 1(c) varies from the language set forth in Item 512
of Regulation S-K.  Please revise.
 8. We note that you have not included the undert aking set forth in Item 512(a)(5)(ii) of
Regulation S-K.  Pleas e revise or advise.
 Signatures, page 21

 9. You have not identified the person signing the registration statement in the capacity of
controller or principal accounting officer.  See Instruction 1 to Signatures for Form S-3.
Note that any person who occupies more than one of the specified positions must indicate
each capacity in which he or she signs the registration statement.  See Instruction 2 to Signatures for Form S-3.  Please include the signature of your cont roller or principal
accounting officer in your ame nded registration statement.

Exhibit 5.1

 10. The first paragraph refers to an aggregat e offering price of up to $7,487,000 of common
stock.  Please ensure that counsel’s opinion is revised to describe the current resale
offering.
 11. Please ensure that counsel opine s, if true, that: (i) the shar es of common stock are validly
issued, fully-paid and non-assessable, and that  (ii) when issued in accordance with the
provisions of the warrant agreement as descri bed in the prospectus, the warrant shares
will be validly issued, fully-paid and non-assessable.
 12. We note counsel’s statement that he is license d to practice law “solel y” in the state of
Colorado.  Please ensure that counsel removes this apparent qualification; we will not
object if counsel removes the word “solely.”

We urge all persons who are responsible for th e accuracy and adequacy of the disclosure
in the filing to be certain that the filing incl udes the information the Securities Act of 1933 and
all applicable Securities Act rules require.  Since the company and its management are in
possession of all facts relating to a company’s disc losure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

Patrick White Document Security Systems, Inc. February 24, 2011 Page 4

 Notwithstanding our comments, in the event you request acceleration of  the effective date
of the pending registration statement please pr ovide a written statement from the company
acknowledging that:

• should the Commission or the staff, acting purs uant to delegated authority, declare the
filing effective, it does not foreclose the Co mmission from taking any action with respect
to the filing;

• the action of the Commission or the staff, acting pursuant to delegated authority, in
declaring the filing effective, does not relieve the company from its full responsibility for
the adequacy and accuracy of the disclosure in the filing; and

• the company may not assert staff comments a nd the declaration of effectiveness as a
defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.  Please refer to Rule 461 regarding requests fo r acceleration.  We will consider a written
request for acceleration of the e ffective date of the registration statement as confirmation of the
fact that those requesting acceler ation are aware of their respec tive responsibilities under the
Securities Act of 1933 and the Secu rities Exchange Act of 1934 as they relate to the proposed
public offering of the securities specified in th e above registration stat ement.  Please allow
adequate time for us to review any amendment prior to the requested effective date of the
registration statement.

Please contact Evan S. Jacobson at (202) 551-3428 or me at (202) 551-3462 with any
questions.
Sincerely,
   /s/ Mark P. Shuman
Mark P. Shuman Branch Chief – Legal
 cc: Via Email

Gary A. Agron, Esq. Law Offices of Gary A. Agron