In July 1998, the 6-year-old Maynard, Mass., firm was sitting on patented technology that protected digital content on CD-ROMs, a market with little growth potential. The company, which trades over the counter, had a stock price mired in the low single-digits. Prospects looked bleak.

But in the last four weeks, the reborn SoftLock.com Inc. (OTCBB: SLCK) has received $14.75 million in two rounds of equity funding, including $9 million announced Monday in a round led by hedge funds Tudor Investment and The Richie Fund.

At the same time, SoftLock's share price has more than tripled, from $4 to nearly $14 a share in late Monday trading. The company also announced plans to apply for listing on the Nasdaq SmallCap market.

How to account for the turnaround? Like most economic success stories these days, SoftLock turned to the Web.

Chief Executive Officer Keith Loris decided 18 months ago to use the company's technology to solve a lingering Net dilemma: how to collect revenue on content too valuable to be given away, without restricting website access by charging subscription fees.

"It's our and our publishers' belief that until people are compensated for their intellectual property, they won't put the content online," Loris said.

Take one of SoftLock's primary content customers, Standard & Poor. The company charges three- and four-figure fees for its in-depth industry surveys, read typically by financial analysts or executives who want thorough overviews of an industry's prospects and major players. So how to market the material on the Web while minimizing the risk of pirating?

SoftLock's copyright protection doesn't block all content. Instead, it shows users an Acrobat PDF file with a table of contents or 2-page introduction, with the goal of enticing readers. Users then click on a "buy" button to get access to the rest of the report, with SoftLock processing credit cards before "unlocking" the material.

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A nifty feature, Loris said, is that the material is only "unlocked" on the user's hard drive. If the material is forwarded -- an activity SoftLock encourages with an on-screen "Send To" button -- it automatically relocks into "sample" mode until users buy it themselves. Loris said, "We're trying to capitalize on the human desire to pass along interesting information."

Another boon to content providers: no upfront costs. SoftLock charges only a commission on the orders it processes, between 10 percent and 35 percent depending on the material. "This makes it a no-brainer for premium content providers," Loris said. "They pay nothing, they don't have to set up an e-commerce site, they need no additional employees. We do it all for you, then take a percentage of sales you otherwise wouldn't have made."

While SoftLock's initital customers have been concentrated in the financial sector, including Morningstar Inc. and Benchmarking Partners, Loris also wants to target traditional book publishing houses.

The other part of the SoftLock story is its affiliate program. The company is striking deals with portals focused on single industries, such as Bank2000, which has online services for the banking sector. SoftLock acted as a broker for Standard & Poor, getting the company's reports distributed on the Bank2000. On sales made at affiliate websites, SoftLock collects its own commissions plus a 5 percent affiliate fee.

The new model, along with a digital sales market expected to reach $275 billion within the decade, has impressed investors. This is despite -- or, given Web investment trends, perhaps as a result of -- the firm's anemic financial report from last fall. SoftLock reported losses of $2.9 million for the first nine months of 1999, up from $379,000 in 1998 losses. While CD-ROM sales continue to stagnate, the firm's investment in its Web strategy has to date seen little payoff.

But investors see potential. Chuck Stuckey, CEO of RSA Security Inc., which participated in both of SoftLock's recent funding rounds, said, "The company demonstrates that security is a critical enabler for Internet commerce. We think it offers a powerful value proposition that should drive the growth of e-commerce for valuable digital content."

Adam Rin, managing director of SI Ventures, a Gartner Group affiliate that has also funded SoftLock twice over, has become a SoftLock director. He described the company's product as "a compelling solution for content providers."

Lots of companies have moved into the protection of digital copyright, but most do it differently. InterTrust of Buffalo, for example, sells content security software that content providers buy up front rather than on commission. Inifinite Ink is distributing e-books through retail sites like Amazon.com and barnesandnoble.com. And Qpass facilitates online orders for digital content sites such The New York Times.

Loris says his firm has less in common with those companies than the online ad-server DoubleClick Inc.: "Ad-servers send you a bucket of bytes in the form of an ad, with the goal that you'll click on it, go to a website and buy something. We send bytes in the form of digital content, with the goal that you'll do the same thing -- except that our content is e-commerce. We're really at the intersection of advertising and e-commerce."

Loris wants to use the new funding to add more content (or, as he put it, "to stock our shelves") and affiliates. The company plans to more than double its base of 40 employees, mostly in sales positions, and is looking to add office space at Maynard Clock Tower Place, where it moved in October.

Perhaps more important, the company said the financings should qualify it for listing on the Nasdaq SmallCap Market, for which it plans to apply "soon," Loris said. The firm has already passed one hurdle by maintaining its stock price above a Nasdaq-set minimum for 10 consecutive days. Acceptance would allow SoftLock to develop relationships with investment banks and pursue more capital in the public markets.

All in all, that's a good fighting stance for a company that 18 months ago found itself flat on the mat.