Apple Exhibit 1050
`Apple Inc. v. Smartflash LLC
`CBM2015-00121
`Page 00001
`
`

`
`US 8,083,137 B2
`Page 2
`
`U.S. PATENT DOCUMENTS
`
`5,790,668 A
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`
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`
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`
`\Io.
`
`* cited by examiner
`
`Page 00002
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`Page 00002
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`

`
`U.S. Patent
`
`Dec. 27, 2011
`
`Sheet 1 of 7
`
`US 8,083,137 B2
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`Page 00003
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`Page 00003
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`

`
`U.S. Patent
`
`US 8,083,137 B2
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`Page 00004
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`Page 00004
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`

`
`U.S. Patent
`
`Dec. 27, 2011
`
`Sheet 3 of7
`
`US 8,083,137 B2
`
`3“
`
`FIG. 3A
`
`-
`
`302
`303
`VIEW ACCOUNT 9
`
`Lmrrs AND
`CURRENT STATUS
`
`EDIT PROFILE
`
`308
`
`SELECT
`INFORMATION
`DESIRED
`
`330
`
`306
`
`EDIT MAIN
`USER-
`
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`IDENTIFY USERS
`
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`SET CATEGORIES AND
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`
`307
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`SET ALL PARAMETERS FOR EACH USER
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`
`
`310
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`311
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`WILL THERE
`BE AUTOMATIC LIMIT OR
`TIMING CI-IANGES?
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`334
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`331
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`0
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`
`
`Page 00005
`
`Page 00005
`
`

`
`U.S. Patent
`
`Dec. 27, 2011
`
`Sheet 4 of 7
`
`US 8,083,137 B2
`
`FIG. 3B
`
`FROM
`FIG. 3A
`
`/30
`
`
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`ONLY P.0.S USER
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`
`321
`
`Page 00006
`
`
`
`
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`'2
`
`322
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`YES
`
`
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`FINISH
`
`Page 00006
`
`

`
`U.S. Patent
`
`Dec. 27, 2011
`
`Sheet 5 of7
`
`US 8,083,137 B2
`
`401
`
`P.0.S. LOG—0N '
`
`403
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`419
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`418
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`Page 00007
`
`Page 00007
`
`

`
`U.S. Patent
`
`Dec. 27, 2011
`
`Sheet 6 of 7
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`US 8,083,137 B2
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`Page 00008
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`

`
`U.S. Patent
`
`Dec. 27, 2011
`
`Sheet 7 of 7
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`US 8,083,137 B2
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`

`
`1
`ADMINISTRATION OF FINANCIAL
`ACCOUNTS
`
`RELATED APPLICATIONS
`
`This application claims priority to U.S. application Ser.
`No. 11/567,044 which, in turn, is a divisional of and claims
`priority to U.S. application Ser. No. 10/192,426, now U.S.
`Pat. No. 7,254,548. This application also claims priority to
`U.S. patent application Ser. Nos.: 11/567,032; 11/767,246;
`and 11/567,069, all of which claim priority to U.S. Pat. No.
`7,254,548. The subject matter ofU.S. Pat. No. 7,254,548, and
`application Ser. Nos. 11/567,044; 11/567,032; 11/767,246;
`and 1 1/567,069 is expressly incorporated by reference herein.
`
`BACKGROUND
`
`The popularity of credit cards, debit cards, and other facili-
`ties for financing transactions for the consuming public at the
`point of sale is now without question. It is easy, and all too
`prevalent, that along with such popularity and ease of use of
`most point of sale credit facilities, comes financial difficulty
`for many people.
`It is difiicult, even for the most disciplined person, to resist
`the temptation of purchasing a product spontaneously. This
`impulse buying is often encouraged by merchants and, when
`done well, is highly effective.
`Today, most credit facilities, such as credit cards, have
`ultimate spending limits, such that when the limit is exceeded
`(or the most recent invoice not paid promptly) the consumer
`user is denied further access to credit. Usually, by this time,
`the consumer is in financial distress.
`
`Many credit facilities today allow consumerusers to obtain
`current balances, as well as recent purchase information, by
`telephone or Internet, or other on-line access. This historical
`data does not adequately address the problem, as it does not
`help the consumer in making purchasing decisions at the time
`a purchase decision is being contemplated. Also, many credit
`facilities give annual print-out summaries of purchases by
`category. While such reports are nice to have at tax season, or
`for next year’s plarming, they are a backward-looking view
`and do not serve to help the consumer on a day-to-day basis.
`People on fixed incomes, low incomes and people with debt
`“problems,” should be on rigid budgets and may require cur-
`rent financial information in a more timely manner. People
`striving simply to “watch” their spending also require current
`information, if they are to make intelligent buying decisions.
`Another problem exists today when some users have the
`use of a card issued to another person. For example, in an
`employer/employee situation often an employee is given use
`ofa credit card for the purchase ofgoods or services which are
`business related. Unfortunately, such credit facilities are
`sometimes misused, or the balances go too high, and by the
`time the employer learns of the problem it may be too late to
`remedy the situation.
`
`SUMMARY
`
`This Summary is provided to introduce a selection of con-
`cepts in a simplified form that are further described below in
`the Detailed Description. This Summary is not intended to
`identify key features or essential features of the claimed sub-
`ject matter, nor is it intended to be used to limit the scope of
`the claimed subject matter.
`Various embodiments are directed to a system and method
`which allows consumer users to establish self-imposed limits
`on the user’ s spending (borrowing) such that when the limit is
`
`10
`
`15
`
`20
`
`25
`
`30
`
`35
`
`40
`
`45
`
`50
`
`55
`
`60
`
`65
`
`US 8,083,137 B2
`
`2
`
`reached the consuming user is notified. This notification can
`be before, during or after the point of sale transaction, and can
`be delivered, if desired, by the account clearing network and
`printed on the user’s purchase receipt. The notification mes-
`sage can be delivered via a phone call, email or over an
`Internet connection to the user. The notification can be to one
`
`or more designated third parties, such as a parent, or card
`owner, or a debt counselor.
`In at least one embodiment, the user will pre-establish
`self-imposed spending limits (guidelines) on a category by
`category basis, and each category can have, if desired, a
`different accounting period. For example, the food category
`can have a monthly (or weekly) limit, while the hobby cat-
`egory can have, for example, an annual or semi-annual limit.
`Since these limits are self-imposed, they do not impact the
`user’s ability to complete any transaction, but rather they
`serve to provide the user meaningful information at a time
`when that information is mo st useful.
`
`the user may access his/her
`In another embodiment,
`account, other than at the point of sale, to see (or hear) a
`running total of category balances, based on accounting peri-
`ods, as well as comparisons against the user imposed pre-
`established category by category budget.
`In another embodiment, the user can establish the limits,
`and can change the limits when desired, by telephone, email,
`Internet or the like. Also the limits need not be constant from
`
`accounting period to accounting period. Thus, if a person’s
`ability to repay the charged (borrowed) amount fluctuates
`during the year, the user may pre-establish that the limits will
`automatically change during those periods. Also, the user
`might decide that if his/her total outstanding balance reaches
`a certain amount, certain budgeted categories then will be
`reduced until the total unpaid amount recedes below the
`“critical” level. In this regard different categories canbe given
`different priorities.
`For example, assume a user has a total line of credit of, say,
`$5,000. Also assume that the user has established that his/her
`food budget is to be $200 per week (with the highest priority
`set), and that the boat budget is $1,000 per year (with the
`lowest priority set). Also let us assume that the user has set a
`self-imposed arbitrary cap on his/her outstanding credit card
`balance of, $2,000, let us assume also that the current out-
`standing balance has exceeded the self-imposed $2000 limit,
`but has not reached the $5,000 card limit.
`Now let us assume that the user desires to buy a new $100
`fishing rod for his boat and this will be the first “boat” pur-
`chase this year. The user can access his account in any number
`of ways, for example, by voice, or by Internet or at the point
`of sale. When the user accesses the account, since the self-
`imposed outstanding balance cap of $2,000 has been
`exceeded, the user will be informed that the available budget
`for the fishing rod is zero, even though the available budget
`amount is $1,000 and even though the line of credit still
`allows for $3000 worth of spending. Note, that had the user
`inquired about a food category he/she would have been told
`the actual amount available (or the actual amount used, if
`desired) in the “food” category.
`In a still further embodiment, the user may establish sub-
`users on his/her account and may authorize each user to use
`the account only with respect to certain categories, or cat-
`egory amounts, or only up to a certain credit limit, or only for
`a certain period of time, or a combination of the above.
`The foregoing has outlined rather broadly the features and
`technical advantages ofthe various embodiments in order that
`the detailed description ofthe embodiments that follows may
`be better understood. Additional features and advantages will
`be described hereinafter which form the subject of the
`
`Page 00010
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`

`
`US 8,083,137 B2
`
`3
`claimed subject matter. It should be appreciated by those
`skilled in the art that the conception and specific embodi-
`ments disclosed may be readily utilized as a basis for modi-
`fying or designing other structures for carrying out the same
`purposes of the described embodiments. It should also be
`realized by those skilled in the art that such equivalent con-
`structions do not depart from the spirit and scope of the
`claimed subject matter as set forth in the appended claims. It
`is to be expressly understood that each of the figures is pro-
`vided for the purpose of illustration and description only and
`is not intended as a definition of the limits of the claimed
`
`subject matter.
`
`BRIEF DESCRIPTION OF THE DRAWINGS
`
`For a more complete understanding ofthe claimed embodi-
`ments, reference is now made to the following descriptions
`taken in conjunction with the accompanying drawing, in
`which:
`
`FIG. 1 shows a block diagram of one embodiment where
`the credit-card user is making a purchase at a point of sale
`located at a merchant’s premises;
`FIG. 2 shows a block diagram of another embodiment
`where the credit card user is making a purchase, editing a
`profile or obtaining account information via an on-line Inter-
`net (or telephone) connection;
`FIGS. 3A and 3B show one embodiment of an operation
`where the user obtains information from and/or edits his/her
`
`profile;
`FIG. 4 shows one embodiment where the processing sys-
`tem, in response to a request, provides a message and/or
`blocks the transaction dependant, in part, upon the informa-
`tion contained in the user’s profile;
`FIGS. 5 and 6 show embodiments of profile data bases on
`a category by category basis; and
`FIG. 7 shows one embodiment of a user account organized
`by category.
`
`DETAILED DESCRIPTION
`
`Turning now to FIG. 1, there is shown System 10, which is
`one embodiment showing user 100 with credit card 11, get-
`ting ready to insert the card into card reader 12 to complete a
`sales transaction at a point of sale. The information from card
`reader 12 is communicated via communications links 14.1
`
`and 14.2 and network 101 to central processor 15. Processor
`15, in conjunction with database 16 and profiles 17, then
`categorizes the various purchases being made and stores
`those purchase amounts and categories in database 16,
`according to profiles of user 17, as stored, for example, in
`profile data base 17.
`As will be discussed, these profiles can include not only the
`budget amounts for each category, but what types of items
`would fit into the different categories. Based upon the pro-
`files, processor 15 then can communicate in one or more of
`several ways, such as, for example, back over communica-
`tions links 14-1, 14-1 to user 100 or over alternate commu-
`nication paths via auxiliary communication 18. This commu-
`nication can be, for example, via printer 13, or it can be via
`auxiliary communication path 18. Auxiliary communication
`18 can be, for example, to the user via cell phone, pager, or
`other device. At the same time, if desired, third parties, such
`as parents, employers, debt counselors and others, could also
`be notified. This communication can, if desired, occur for all
`purchases, or for certain of the purchases by category or by
`amount.
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`The system can be designed, if desired, such that if the
`amounts in a category (or if the total outstanding balance at
`that time) were to exceed a certain amount, user 1 00, or a third
`party as identified in the user’s profile, would be required to
`give specific approval for a particular purchase. This system
`could be extended so that third parties (such as parents) can
`allow a child to use a credit card, but certain purchases over a
`certain amount, or all purchases, or purchases in certain cat-
`egories, will require approval from the parent (or other third
`party), who would not actually be present at the point of sale.
`For example, a parent could allow a child to have a credit
`card for the purpose of buying clothes. The child then selects
`his or her purchases at a location and runs card 11 through the
`card reader at the point of sale. The system, via profile 17,
`database 16 and processor 15, then recognizes that this is a
`card which is a sub-account card of a main account, or an
`account that is otherwise special to this person. Processor 15
`then enables a communication to the third person identified
`by profile 17 via auxiliary communication 18. This commu-
`nication could be, for example, cellular, landline, Internet,
`pager, PDA, or the like. The purchase can only be completed,
`if the third person responds in a positive manner (perhaps by
`pushing a button or speaking an acceptance word as set out in
`the user’ s profile). Processor 15, perhaps working in conjunc-
`tion with other network processors, controls the acceptance
`back to the point of sale.
`In some situations, it could be appropriate for the item that
`is being purchased to have a picture, available either in an
`auxiliary database 16-1, or transmitted from the point of sale
`at the time ofpurchase, transmitted to a third person, either for
`approval or simply for information purposes. This would be
`helpful, for example, when a husband is buying a suit and
`wants his wife to see the suit before the purchase is consum-
`mated. A picture ofthe suit couldbe captured by camera 12-1,
`communicated over the communication link to processor 15,
`and then through auxiliary communication 18 to a designated
`third party at a cell phone, computer, pager, FDA, or the like.
`In some situations, the purchaser may desire additional
`information, such as warranties, specifications, pictures,
`assembly instructions, to be sent to a specific location (such as
`the point of sale, or to his/her home), or the purchaser may
`wish to register his/her purchase with the seller, or even apply
`for a rebate, all at the time or purchase. Processor 15, working
`in conjunction with database 16 and profiles 17 then could
`send the purchaser’s address and other information to the
`seller. The seller’s information obtained from transmitted
`POS information, or from data contained at the central loca-
`tion, such as from auxiliary database 16-1, would be com-
`bined with the user’s (purchaser’s) information as obtained
`from database 16, and sent to the seller. Since the user specific
`database contains information pertaining to the user’s prior
`purchases it could be used, for example to aid the purchaser in
`making new purchases, perhaps by providing compatibility
`information to the user, either at the POS or on demand. This
`compatibility information could be within system 10, but
`would likely reside with each specific seller and could be
`supplied to the user at the POS (or on demand) in response to
`the above-discussed purchase registration.
`Note that auxiliary database 16-1 can hold any type of
`information that is desired to be communicated to either user
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`100 or to third parties. This information could be sound,
`video, or any type of information, and can be stored in com-
`pressed format in the well-known manner. Also the informa-
`tion sent to a third party could be, for example, pictures,
`video, color, audio or any combination thereof. In addition,
`the information could be partially located in the database,
`such as database 16-1 and available based upon some infor-
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`mation, perhaps a bar code or other information sent from
`card reader 12 or from camera 12-1.
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`In addition, the system could use camera 12-1 to take a live
`picture of user 100 at the point of sale and to then match that
`picture against a known picture or other information. This
`could then be sent to a third party for verification based upon
`a profile in database 17. Thus, when a main user of a credit
`card allows other sub-users, which could be employees, chil-
`dren, relatives, temporary workers, to use the sub-account
`card, each purchase using the sub-account card could trigger,
`if desired, the taking of a picture of the then user at the POS.
`This picture, or other information (such as a password) could
`be transmitted, under control of profile 17, database 16 and
`processor 15 to the main user, as discussed above, such that
`the transaction would not be completed until the main user
`signified acceptance.
`This system, for example, could be used to keep an account
`“open” for the real user for a period of time when a card is
`reported lost or stolen. In such an event, the profile would be
`used to provide the system with a special verification proce-
`dure unique to the user. This verification could be for
`example, a password necessary at each purchase, or a biomet-
`ric sent from the POS for comparison during each transaction.
`System 10 could operate such that the main user, as will be
`discussed, can at any time change his/her profile, thereby
`adding or changing passwords, and assigning passwords or
`other control information to the profile. These passwords
`could be for the main account, or for any sub-account. When
`the credit card is presented at a POS, system 10 would check
`the user’s profile to see if any such passwords, third party
`approvals, etc, are required. If so, the salesperson at the point
`of sale could then follow directions sent to that person via
`network 101 so as to obtain the proper identification of the
`user. This would give an added measure of security to credit
`card users. For example, the profile of a user might specify
`that call-in purchases (ones where the card is not physically
`present at the POS location) will need to be verified by a
`specified pas sword, or verified by a communication placed by
`the salesperson (or by system 10) to a third person. The user’ s
`own created profile will allow for flexibility in this regard.
`Note that the profile of the user, including database infor-
`mation if desired, could be stored on the user’s card along
`with, if desired, at least some of the processing. In such a
`scenario, information from the profile would be sent to a
`central processing network to provide the services for the user
`as discussed above. A so called “smart card” would be one
`
`method of accomplishing this objective.
`Turning now to FIG. 2, there is shown System 20 in which
`user 200 is utilizing keyboard 22 and computer 23 to access
`his or her account via communication links 201-1 and 210-2
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`and public network 24 to web portal or phone operator 25.
`Portal 25 then accesses processor 15 via communication link
`202-1. Such accessing of the system by user 200 could be for
`the purpose of obtaining account information at any time on
`a category by category basis, or for establishing (as will be
`discussed) various account categories, balances and sub-us-
`ers, or user 200 could be using computer 23 (which could be
`a telephone, pager, PDA, or the like) as a POS device. Note
`that connection 201-1, as well as the other connections
`shown, could also be by pager network, cellular network or
`any other type of network, including for example, wireless,
`wire line or the cable satellite network typically utilized for
`broadcast signals into the home for entertainment purposes.
`Once connected to processor 15, the system operates as dis-
`cussed above with respect to FIG. 1. In the situation where at
`least a portion of the processing is on the user’s smart card,
`then the user would insert his/her card at a reader (not shown)
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`associated with computer 23. Of course, if the smart card
`included wireless technology, such a reader would be unnec-
`essary, both in FIG. 2 as well as in FIG. 1.
`FIG. 3A shows system 30 which is one embodiment of a
`system utilized to enable system 10 (FIG. 1), or system 20
`(FIG. 2) where a user can establish various categories and
`credit limits and/or view the existing account at any time. In
`process 301 the user logs onto the system as is well known. In
`process 302 the user is identified and is validated by the
`system. At this point the user is given several choices, three of
`which are shown in FIG. 3A. One such option, as shown in
`process 303, allows the user to view the account limits and
`current status. The user in process 304 could edit the profile
`and in process 305 the user may establish new profiles.
`Assuming the user wanted to view the account limits, then
`the user in process 330 would select the desired information.
`The system in process 306 would access the processor and
`other databases and profiles to provide the desired informa-
`tion, via process 307, which could be in the form of FIG. 5, 6
`or 7, or other profile information. If the user desired to just
`view the information, process 334, then when the user was
`finished, as shown by process 331, the connection would be
`terminated in a well known manner.
`
`If changes were to be made, as controlled by process 334,
`then the user would be directed to edit profile process 3 04, and
`the user could either edit the main user or subusers . Assuming
`the main user is to be edited, the user is directed to the same
`path as would be utilized if there was to be established a new
`profile via process 305, such that the user, under control of
`process 307 would set the categories and limits for the main
`user.
`
`Going back to process 308, had the main user decided to
`edit some profile other than the main user’s profile, then the
`users would be identified via process 306 and the paths then
`would be concurrent for both the sub-users’ and main user,
`such that process 309 would inquire as to whether some users
`would have different limits, categories, times or parameters.
`If the answer was yes, then those parameters would be set
`for each user as to which category, amount, time or any other
`parameter desired for individual sub-users and the main user.
`If everybody were to have the same limits, then process 309
`would skip to process 311 and the question would be
`answered as to whether there are automatic limits with timing
`changes to be applied. If there were, those parameters would
`be set via process 312. Process 312 would also control any
`other parameter that needed to be set, such as, by way of
`example,
`the user’s home address, phone number, email
`address, auxiliary addresses (both physical and electronic),
`cell phone numbers, pagers, PDA addresses, third party noti-
`fications, together with their respective contact information,
`passcodes, special limits.
`After the user is finished entering all of the desired param-
`eters, the question would be asked as to whether the normal
`categories of purchase goods were to be used. By this it is
`meant that some categories would be preset by the system
`itself, such that clothes being purchased would always go
`under the clothing category. However, if desired, a user could
`decide that clothes from certain stores, or certain types of
`clothing, such as sporting clothes, would go under a sporting
`category. The user could decide, for example, such that cer-
`tain foods would go under a discretionary category other than
`food. This can be seen in FIG. 6 where the natural category
`for, say ice cream, would be food, but a user could switch the
`natural category to a profile category of snack, if desired.
`Likewise, fishing gear would have a normal category of sport-
`ing goods, whereas this user would have a profile category of
`boating. This would allow a user to more finely tailor his or
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`US 8,083,137 B2
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`7
`her profile to be more accommodating of the user’s needs. It
`would allow a fine tuning ofbudgeting and expenses on an ‘as
`you go’ basis.
`In process 314, the user can assign items to categories and
`can do so by sub-user if desired, so that certain sub-users can
`have access to all categories, or some categories, and also
`what items are included in those subcategories. For example,
`a parent may allow a child a credit card for the purchase of
`food, and restrict the child from buying alcohol or cigarettes,
`if so desired. Or, the parent could allow the child to have a
`credit card for the purchase of gasoline for the family car, but
`other products sold at the service station would fall into a
`different category, either naturally or as a selection under the
`categories selected under process 314, such that only certain
`products such as gasoline could be purchased by certain users
`of the credit card.
`
`Continuing on FIG. 3B, if the user desired to set priorities
`for different categories, process 315, such that as discussed
`above, based upon the priority level set in process 31 6, and the
`trigger amounts in 318, the user would be notified of different
`category levels such that the user is better able to maintain a
`strict budget when necessary. Since these limits are all self-
`imposed the user can determine, on a category by category
`basis, the difficulty and manner for overriding any “inhibit-
`ing” message.
`In process 317 it is determined whether only the point of
`sale user is to be notified, and if so, how that notification is to
`be made via process 319. Notification can be printed on the
`receipt, or the notification can be by cellular phone call, email
`or other notification and can be contemporaneously with the
`transaction or thereafter. Ifthird parties are to be notified, then
`the names of the third parties and mode of notification can be
`set via process 321, all of which would be stored in database
`16 and profile 17 (FIG. 1) via process 320.
`Before exiting the system, the user may wish to edit the
`profiles, perhaps to add oth