SecProbe.io

December 28 , 2012

Via E -Mail
Robert Bzdick
Chief Executive Officer
Document Security Systems, Inc.
First Federal Plaza
28 Main Street East, Suite 1525
Rochester, NY 14614

Re: Document Security Systems, Inc.
Registration Statement on Form S -4
Filed  November 26 , 2012
File No. 333-185134

Dear Mr. Bzdick :

We have limited our review of your registration 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 believe 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 registration statement and the information you
provide in response to these  comments , we may have  additional comments.

Form S -4 filed on November 26, 2012

General

1. We note that you have requested technical guidance from the Division of Corporation
Finance’s Office of Chief Accountant.  Please note that these issues are still under
consideration by the Division’s Office of Chief Accountant and that we may issue further
accounting comments if appropriate.

2. Please revise your prospectus cover page, questions and answers section, prospectus
summary, and other appropriate places in your registration statement to describe the

Robert Bzdick
Document Security Systems, Inc.
December 28,  2012
Page 2

 value of the merger consideration offered to the shareholders of Lexington Group, Inc.
We note that a variety of securities will be issued by Document Security Systems, Inc.
(“DSS”) as part of the merger transaction,  such as DSS common stock, Series A
Convertible Preferred Stock, warrants, additional common stock shares held in escrow,
and/or options.  Please also describe any assumptions used in your calculation of the
value of the merger consideration.

3. Please rev ise your prospectus cover page, questions and answers section, prospectus
summary, and other appropriate places in your registration statement to describe the
estimated number or range of securities that will be issued as part of your merger
consideration,  including your common stock, Series A Convertible Preferred Stock,
warrants, additional common stock shares held in escrow, options, and the common stock
underlying such preferred stock, warrants and/or options.  Please describe any
assumptions used in yo ur calculation and clarify whether such figures or illustrative
examples are presented on a pre -split basis subject to the approval of the reverse stock
split proposal.

4. Please note that your description of the merger transaction and consideration in your
prospectus cover page, questions and answers section, prospectus summary and summary
term sheet should be written in plain English.  Please revise these sections to remove the
highly technical descriptions of the merger transaction and consideration in the  forepart
of your prospectus and provide the appropriate cross -references to more detailed
disclosures and/or tabular presentation of complex information.  We refer you to Items
502 and 503 of Regulation S -K, Item 1001 of Regulation M -A, Rule 421(b) and (d ) of
Regulation C, and Staff Legal Bulletin No. 7 (September 4, 1998) for further guidance.
Also, please revise to limit your outside front cover page of your prospectus to one page,
as required by Item 501(b) of Regulation S -K.

Front Outside Cover Page of the Prospectus

5. Please revise the front outside cover page of the prospectus to include the title and
amount of securities offered.  Refer to Item 501(b)(2) of Regulation S -K.

Summary, page 1

6. Please revise here and other appropriate places in your pr ospectus to disclose the amounts
of future cash compensation that is owed to Thomas Bascom for the sale, licensing and/or
enforcement of the Bascom patents acquired by Lexington on July 9, 2012, pursuant to
the Patent Purchase Agreement.  For example, plea se clarify whether Mr. Bascom will
receive any of the merger proceeds or any cash compensation related to merger of
Lexington with DSS.  Also, please file the Patent Purchase Agreement and the Linkspace
LLC licensing agreement described on pages 161 and 169 as an exhibit under Item
601(b)(10) of Regulation S -K or advise us why they are not material.

Robert Bzdick
Document Security Systems, Inc.
December 28,  2012
Page 3

DSS Proposal No. 2: Approval of an Amendment to DSS’s Amended and Restated Certificate of
Incorporation t o Authorize a Class of Preferred Stock, page 118

7. Please revise to clarify the voting and conversion rights of holders of your Series A
Convertible Preferred Stock.  In particular, please clarify the conversion restrictions of
such preferred stock holders if they beneficially own more than 9.99% of your common
stock.  On page 118, you reference voting rights “in connection with a fundamental
transaction.”  Please provide a brief description of these voting rights provided under
your governing documents or N ew York law.

DSS Proposal No. 3: Approval of an Amendment to DSS’s Amended and Restated Certificate of
Incorporation to Implement a Staggered Board of Directors, page 120

8. Please revise to disclose the identity of your prospective directors, including those to be
designated by Lexington, should your staggered board proposal be approved or if it is
rejected.

Management of the Combined Company Following the Merger, page 174

9. Please revise here and  other appropriate places in the registration statement, including the
forepart of your prospectus, to clarify how the business of Lexington’s litigation and
licensing operations related to the Bascom intellectual property will affec t the operations,
resource allocation or strategy of DSS’s existing litigation and licensing businesses.

Undertakings, page II -7

10. Please revise to provide the undertakings in Items 512(a)(5) and (6) of Regulation S -K, or
advise why you believe they ar e not necessary.

Exhibits

11. Please file a copy of your preliminary proxy card with your next amendment.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing includes the inform ation 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 disclosure, they are responsible for the accuracy
and adequacy of the disclosures  they have made.

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

Robert Bzdick
Document Security Systems, Inc.
December 28,  2012
Page 4

 should the Commission or the staff,  acting pursuant to delegated authority, declare the
filing effective, it does not foreclose the Commission 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 and 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 for accelerati on.  We will consider a written
request for acceleration of the effective date of the registration statement as confirmation of the
fact that those requesting acceleration are aware of their respective responsibilities under the
Securities Act of 1933 and the Securities Exchange Act of 1934 as they relate to the proposed
public offering of the securities specified in the above registration statement.  Please allow
adequate time for us to review any amendment prior to the requested effective date of the
registration statement.

You may contact Edwin Kim, Attorney -Advisor, at (202) 551 -3297 or, in his absence, me
at (202) 551 -3735 with any questions relating to your registration statement.

Sincerely,

 /s/ Barbara C. Jacobs

 Barbara C. Jacobs
 Assistant Director

cc:  Via E-Mail
 Philip Jones, CFO