(FORTUNE Magazine) – ELISAR SOFTWARE Content security www.elisar.com

The outcry over music-file swapping this past year has dwarfed concerns about image piracy, which is weird given that the only thing easier than swapping music on the Net is ripping a photograph from a Website.

That's where Elisar Software comes in. Think of the small Albuquerque startup as a security officer for images. "We have created a system that physically deters copying. It encrypts the content and only decrypts it if MediaRights, our software, is installed," says Greg Heileman, CEO of Elisar and a professor at the University of New Mexico. The software protects most files, including jpg, gif, pdf, html, and videos, from being copied or forwarded without authorization.

Most of the programs on the market designed to do this are built into an Internet browser and therefore easier to hack. With Elisar's solution, a business looking to protect its content installs the server software (average price: $160,000). Then its MediaRights program is put into the viewer's computer. Once it's installed, an image opens much like an Adobe Acrobat file. It takes seconds.

This solution is ideal for the Georgia O'Keeffe Museum, which wants to prevent Web surfers from pilfering artwork from its site. "The O'Keeffe Foundation owns a great deal of work, and we need to make sure that it is not reproduced inappropriately," says museum director George King. It also works for celebrity photo sites, such as WireImage, which have business models that allow images to be downloaded but not shared. "After researching other competitors, we turned to Elisar to protect our images from being saved to desktops," says Josh Tang, president of WireImage.

Heileman and his CTO, Carlos Pizano, a former student, have labored over document security for several years. In 1999, Pizano's academic research concluded that digital watermarking, then the best option for protecting documents, chased abusers but was ineffective in preventing copying, so the two engineers went to work on software solutions and formed Elisar.

In the end, Elisar may not become the brand name in document security: It's a small shop that has had trouble securing significant funding. If nothing else, however, it could make a good acquisition target, as its software is a harbinger of where document-sharing technology is headed. Elisar does have one unmistakable advantage working 1,041 miles from the pricey Silicon Valley environs (well, two, if you count quick access to Taos): It pays just $13.50 a square foot for office space. --Julie Schlosser