FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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(Print or Type Responses)

1. Name and Address of Reporting Person * KAGAN JONATHAN H   2. Issuer Name and Ticker or Trading Symbol Bitstream Inc. [BITS] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) __X__ Director _____ 10% Owner _____ Officer (give title below) _____ Other (specify below) (Last) (First) (Middle) C/O BITSTREAM INC., 500 NICKERSON ROAD 3. Date of Earliest Transaction (Month/Day/Year) 09/30/2011 (Street) MARLBOROUGH, MA 01752-4695 4. If Amendment, Date Original Filed(Month/Day/Year) 6. Individual or Joint/Group Filing(Check Applicable Line) _X_ Form filed by One Reporting Person ___ Form filed by More than One Reporting Person (City) (State) (Zip) Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned

1.Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Class A Common Stock 09/30/2011   A   2,700 A $ 0 41,600 (1) (2) D (3)

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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)

1. Title of Derivative Security (Instr. 3)

2. Conversion or Exercise Price of Derivative Security

3. Transaction Date (Month/Day/Year)

3A. Deemed Execution Date, if any (Month/Day/Year)

4. Transaction Code (Instr. 8)

5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5)

6. Date Exercisable and Expiration Date (Month/Day/Year)

7. Title and Amount of Underlying Securities (Instr. 3 and 4)

8. Price of Derivative Security (Instr. 5)

9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)

10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4)

11. Nature of Indirect Beneficial Ownership (Instr. 4)

Code

V

(A)

(D)

Date Exercisable

Expiration Date

Title

Amount or Number of Shares

Reporting Owners

Reporting Owner Name / Address	Relationships
	Director	10% Owner	Officer	Other
KAGAN JONATHAN H C/O BITSTREAM INC. 500 NICKERSON ROAD MARLBOROUGH, MA 01752-4695	X

Signatures

Janathan H. Kagan		10/03/2011
**Signature of Reporting Person		Date

Explanation of Responses:

*	If the form is filed by more than one reporting person, see Instruction 4(b)(v).
**	Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1)	Includes 1,000 shares held by Mr. Kagan's son and Mr. Kagan may be deemed beneficial owner of such shares. Includes 17,500 restricted shares granted on 02/22/2010 which expires on 02/22/2020 and which vests over 5 years in 20 equal amounts of 1,250 shares on each quarterly anniversary date from the date of grant; 3,825 restricted shares granted on 11/12/2010 which expires on 11/12/2020 and which vests over 5 years in 20 equal amounts of 225 shares on each quarterly anniversary date from the date of grant; 4,050 restricted shares granted on 02/24/2011 which expires on 02/24/2021 and which vests over 5 years in 20 equal amounts of 225 shares on each quarterly anniversary date from the date of grant; 3,705 restricted shares granted on 06/30/2011 which expires on 06/30/2021 and which vests over 5 years in 20 equal amounts of 195 shares on each quarterly anniversary date from the date of grant;
(2)	and 2,700 restricted shares granted on 09/30/2011 which expires on 09/30/2021 and which vests over 5 years in 20 equal amounts of 135 shares on each quarterly anniversary date from the date of grant.
(3)	Includes 1,000 shares held by Mr. Kagan's son and Mr. Kagan may be deemed beneficial owner of such shares.

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