111111
`
`1111111111111111111111111111111111111111111111111111111111111
`US007346545B2
`
`c12) United States Patent
`Jones
`
`(10) Patent No.:
`(45) Date of Patent:
`
`US 7,346,545 B2
`Mar.18,2008
`
`(54) METHOD AND SYSTEM FOR PAYMENT OF
`INTELLECTUAL PROPERTY ROYALTIES
`BY INTERPOSED SPONSOR ON BEHALF OF
`CONSUMER OVER A
`TELECOMMUNICATIONS NETWORK
`
`(75)
`
`Inventor: Dana Howard Jones, Rancho Palos
`Verdes, CA (US)
`
`(73) Assignee: Ultramercial, Inc., Palo Verdes, CA
`(US)
`
`( *) Notice:
`
`Subject to any disclaimer, the term of this
`patent is extended or adjusted under 35
`U.S.C. 154(b) by 624 days.
`
`(21) Appl. No.: 09/867,181
`
`(22) Filed:
`
`May 29, 2001
`
`(65)
`
`Prior Publication Data
`
`US 2001/0047338 Al
`
`Nov. 29, 2001
`
`Related U.S. Application Data
`
`(60)
`
`Provisional application No. 60/207,941, filed on May
`27, 2000.
`
`(51)
`
`Int. Cl.
`G06Q 30100
`(2006.01)
`(52) U.S. Cl. ........................................... 705/26; 705/27
`(58) Field of Classification Search ............. 705/26-27
`See application file for complete search history.
`
`(56)
`
`References Cited
`
`U.S. PATENT DOCUMENTS
`
`5,191,573 A
`5,675,734 A
`5,774,869 A
`5,774,870 A
`5,794,210 A *
`
`3/1993 Hair
`10/1997 Hair
`6/1998 Toader
`6/1998 Storey
`8/1998 Goldhaber et al ............ 705/14
`
`5,838,314 A *
`5,855,008 A
`5,991,736 A *
`6,084,628 A
`6,102,406 A
`6,ll9,098 A
`6,128,651 A
`6,141,010 A
`6,161,127 A
`6,161,142 A
`6,169,542 B1
`6,178,446 B1
`6,182,050 B1
`6,216,ll2 B1
`
`ll/1998 Nee! et a!. ..................... 725/8
`12/1998 Goldhaber et a!.
`ll/1999 Ferguson eta!. ............. 705/14
`7/2000 Sawyer
`8/2000 Miles et a!.
`9/2000 Guyot et a!.
`10/2000 Cezar
`10/2000 Hoyle
`12/2000 Cezar et al.
`12/2000 Wolfe et al.
`112001 Hooks et a!.
`112001 Gerszberg et a!.
`1/2001 Ballard
`4/2001 Fuller et al.
`
`(Continued)
`
`FOREIGN PATENT DOCUMENTS
`
`EP
`
`0913789 A2 * 5/1999
`
`OTHER PUBLICATIONS
`
`Ebenkarnp, Becky; "Gold on that thar Web," Brandweek, Jul. 15,
`1996, v37 n29 p. 17, 3 pgs, Proquest #9892249.*
`Alexander, Steve; "FREE ... usualy carry a cost," startribune.com,
`Jan. 31, 2000; Proquest #48774859, 6 pgs.*
`
`Primary Examiner-Robert M. Pond
`(74) Attorney, Agent, or Firm-Morrison & Foerster LLP
`
`(57)
`
`ABSTRACT
`
`The present invention is directed to a method and system for
`distributing or obtaining products covered by intellectual
`property over a telecommunications network whereby a
`consumer may, rather paying for the products, choose to
`receive such products after viewing and/or interacting with
`an interposed sponsor's or advertiser's message, wherein the
`interposed sponsor or advertiser may pay the owner or
`assignee of the underlying intellectual property associated
`with the product through an intermediary such as a facili(cid:173)
`tator.
`
`16 Claims, 3 Drawing Sheets
`
`Apple Exhibit 1054
`Apple Inc. v. Smartflash LLC
`CBM2015-00121
`Page 00001
`
`

`
`US 7,346,545 B2
`Page 2
`
`U.S. PATENT DOCUMENTS
`
`6,216,129 B1
`4/2001 Eldering
`6,275,854 B1
`8/2001 Hinnnel et a!.
`6,385,596 B1 * 5/2002 Wiser et a!.
`.................. 705/51
`
`6,529,878 B2 * 3/2003 De Rafael eta!. ............ 705/14
`6,658,568 B1 * 12/2003 Ginter et a!.
`............... 713/193
`
`* cited by examiner
`
`Page 00002
`
`

`
`U.S. Patent
`
`Mar.18,2008
`
`Sheet 1 of 3
`
`US 7,346,545 B2
`
`FIGURE 1
`
`30A
`
`Page 00003
`
`

`
`U.S. Patent
`
`Mar.18,2008
`
`Sheet 2 of 3
`
`US 7,346,545 B2
`
`FIGURE 2
`
`Page 00004
`
`

`
`U.S. Patent
`
`Mar.18,2008
`
`Sheet 3 of 3
`
`US 7,346,545 B2
`
`FIGURE 3
`
`Start Here
`
`FIGURE 4
`
`Start Here
`
`interactive
`(ggl)
`
`not
`
`out
`(gg6)
`
`Responses
`forwarded
`to SP,onsor
`44 (gg4)
`
`Interposed sponsor pays
`mon1es 48 to facilitator, per
`agreements (il)
`
`Page 00005
`
`

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`US 7,346,545 B2
`
`1
`METHOD AND SYSTEM FOR PAYMENT OF
`INTELLECTUAL PROPERTY ROYALTIES
`BY INTERPOSED SPONSOR ON BEHALF OF
`CONSUMER OVER A
`TELECOMMUNICATIONS NETWORK
`
`CLAIM OF PRIORITY
`
`The present application claims the benefit of U.S. Provi(cid:173)
`sional Application No. 60/207,941, titled "Method and Sys(cid:173)
`tem for Payment of Intellectual Property Royalties by Inter(cid:173)
`posed Sponsor on Behalf of Consumer over A
`Telecommunications Network," and filed on May 27, 2000.
`
`BACKGROUND OF THE INVENTION
`
`2
`Young people are becoming accustomed to getting music for
`free and have shown little guilt about the fact that they are
`breaking the law. As a result, copyright holders are losing
`millions of dollars in royalties, while certain young people
`with limited cash, but unlimited Internet access and free
`time, are wrecking havoc on copyrighted intellectual prop(cid:173)
`erty.
`At the same time, advertisers today are facing very
`unpleasant realities in conventional advertising space. More
`10 specifically: 1) the proliferation of cable channels and atten(cid:173)
`dant "channel surfing" during commercials breaks; 2) con(cid:173)
`sumer habits of taping shows and then fast-forwarding
`through commercials during playback; 3) new hard-disk TV
`recorders that can scan out commercials. Further, Internet
`15 banner ads have hit new lows in responses. Once a 3%
`click-through rate, they are now, at the time of filing this
`application, as low as 2 click-throughs per 1,000 impres(cid:173)
`sions. Advertisers are not reaching people as they have been
`in the past.
`U.S. Pat. Nos. 5,675,734 and 5,191,573 disclose Internet
`downloading of sound files, paid for by credit cards or bank
`instruments, but does not include method for payment by a
`sponsor. Meanwhile, although U.S. Pat. No. 5,794,210
`teaches "cyber coin" compensation for paying attention to
`25 online advertisements and the brokerage of attention, it does
`not offer a method where an advertiser pays directly for the
`intellectual property license on behalf of the consumer.
`
`1. Field of Invention
`The present invention is directed to a method and system
`for distributing or obtaining intellectual property products
`through alternative payment of royalties by interposed span- 20
`sor on behalf of consumer via a telecommunications net(cid:173)
`work.
`2. Description of Related Art
`Intellectual property, including music, literature, visual
`arts (painting, photography, etc) and motion pictures are
`protected under the Copyright Act. Certain statutory rights
`are given to the creators and their assigns, including the right
`to control the copying or distribution of their creative works.
`The advent of the computer and its ability to digitize
`products protected by intellectual property rights, such as 30
`music or writings, have made it possible to make copies of
`originals without appreciable loss of quality. Recently, the
`widespread use of the Internet has made it possible to
`distribute and share intellectual property in its digital form,
`worldwide, beyond the control of the intellectual property 35
`rights holders.
`The music industry is particularly affected by this tum of
`events. An open format for the digitizing of recorded music,
`MP3, compacts the file size of music to an acceptable size
`for transfer over a telecommunications network. This MP3 40
`format has significantly changed the way in which popular
`music is being consumed. The MP3 freeware available today
`facilitates listening to personalized play lists of individual
`songs, as opposed to one continuous CD. This freeware
`allows consumers to transform once-copy-protected audio 45
`CD files into MP3 files. Major consumer electronics com(cid:173)
`panies are providing various kinds of MP3 players that can
`easily download files from personal computers. In one
`stance, Napster, being totally free, becomes a very attractive
`site to illegally download copyrighted music.
`Moreover, several factors encourage the growing viola(cid:173)
`tion of intellectual property using the Internet. First, many
`young people, typically under the age of 18, have access to
`the Internet, but do not have a way to pay for items they find
`on the Internet because they do not have credit or debit 55
`cards. At the time of filing the present application, Napster
`is trying to negotiate a fee-based subscription service with
`owners or assignees of intellectual property (such as record
`companies). If this should occur, those under 18 years of
`age, who cannot purchase easily online will be left out and 60
`would continue to seek other means by which to illegally
`download music or other kinds of product covered by
`intellectual property
`Furthermore, people in college, 18 to 24 year olds, have
`high-speed Internet connections supplied by their schools, 65
`making the schools de facto accessories to piracy through
`the massive downloading of un-paid-for copyrighted music.
`
`50
`
`SUMMARY OF THE INVENTION
`
`The preferred embodiments of the present invention offer
`people a legitimate and cashless way to obtain copyrighted
`music or other forms of intellectual property, while still
`delivering a royalty to the intellectual property rights holder.
`In accordance with the preferred embodiments of the
`present invention, a consumer may choose to receive intel(cid:173)
`lectual property products over a telecommunications net(cid:173)
`work after viewing and/or interacting with an interposed
`sponsor's or advertiser's message, wherein the interposed
`sponsor or advertiser may pay the holder of the underlying
`intellectual property either directly or through an interme(cid:173)
`diary such as a facilitator.
`More specifically, in accordance with one embodiment,
`upon logging on to an Internet web site where intellectual
`property products, such as musical composition or written
`articles, are for sale via download, a consumer may choose
`to obtain the right to download selected intellectual property
`products ("IP products") by viewing or participating in an
`advertiser's message or commercial, rather than by paying
`for the intellectual property products with cash or credit
`card. In one instance, a consumer may obtain the right to
`download a musical composition if he or she agrees to first
`view an advertisement presentation, such as a multimedia
`video commercial, by an automobile manufacturer, who
`thereafter pays the royalties to the holder of the intellectual
`property product on behalf of the consumer.
`Several objects and advantages of the present invention
`include:
`a) to provide a "money-less" way for young people (or
`anyone else) to legitimately obtain copyrighted intellectual
`property;
`b) to provide a legitimate alternative to illegal and pirated
`practices of obtaining copyrighted intellectual property over
`a telecommunications network;
`c) to provide copyright holders with a legitimate royalty
`source which is completely accountable;
`
`Page 00006
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`

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`US 7,346,545 B2
`
`3
`d) to provide consumers with an assured quality copy of
`the original source;
`e) to provide advertisers with a "captive audience," which
`may be of a certain demographic profile, for either a
`specified period of time or for a specified number of
`responses to advertisers' queries, yet respecting the privacy
`issues of the consumer;
`f) to provide a more democratic business model for
`copyright holders who do not have major distribution out(cid:173)
`lets.
`
`BRIEF DESCRIPTION OF THE DRAWINGS
`
`FIG. 1 shows a schematic diagram of a method of
`obtaining/distributing
`intellectual property products
`in
`accordance with the preferred embodiment of the present
`invention;
`FIG. 2 shows a flow chart of the method of obtaining
`intellectual property products of FIG. 1 from the consumer's
`perspective;
`FIG. 3 shows a flow chart illustrating the method of
`obtaining/distributing intellectual property products of FIG.
`1 from the interposed sponsor's perspective;
`FIG. 4 shows a flow chart illustrating the method of
`distributing intellectual property products of FIG. 1 from the
`intellectual property rights holder's perspective;
`
`DETAILED DESCRIPTION OF THE
`PREFERRED EMBODIMENT
`
`The embodiments of the present invention shall be
`described in detail with references to FIGS. 1-4. Although
`only the preferred embodiments of the present invention will
`be described hereinafter, it shall be understood that the
`detailed discussion of preferred embodiments is not intended
`to limit the present invention to those particular embodi(cid:173)
`ments.
`A preferred embodiment of the present invention is illus(cid:173)
`trated in FIG. 1. In accordance with the preferred embodi(cid:173)
`ment, four principals are preferably present: a facilitator 10,
`a consumer 20, an intellectual property (IP) rights holder 30,
`and an interposed sponsor 40. All of the principals prefer(cid:173)
`ably communicate over a telecommunications network 50
`such as the Internet, using their respective computers: facili(cid:173)
`tator's computer lOA, consumer's computer 20A, IP rights
`holder's computer 30A and interposed sponsor's computer
`40A. Three of the principals (facilitator, IP rights holder and
`interposed sponsor) may also communicate through a two(cid:173)
`way communications path 52, which may include telephony,
`facsimile, courier, mail or even person-to-person meetings. 50
`In accordance with the preferred embodiment, facilitator
`preferably provides consumer with a sign-up agreement 22,
`followed by a password 12, both preferably over said
`telecommunications network 50. Further, facilitator trans(cid:173)
`mits to consumer an interposed sponsor message 46 and IP
`rights holder's IP 36, both also preferably over said tele(cid:173)
`communications network 50. It is preferable that the facili(cid:173)
`tator maintains a consumer use log 24 of activity between
`facilitator and consumer, which consumer has access to over
`said telecommunications network 50.
`In accordance with the preferred embodiment, the IP
`rights holder has intellectual property products, such as
`recorded music, literature, visual arts or motion pictures.
`The IP rights holder preferably enters into a licensing and
`fee agreement 32 with facilitator. Facilitator maintains a use 65
`log 34 of activity between facilitator and IP rights holder,
`preferably made available to IP rights holder over said
`
`4
`two-way communications path 52. Facilitator preferably
`pays royalties 38 to IP rights holder.
`In accordance with the preferred embodiment, interposed
`sponsor preferably provides facilitator with access to a
`message 46, which will be subsequently exhibited to con(cid:173)
`sumer if he or she chooses. In exchange, interposed sponsor
`pays a fee 48 to facilitator. An interposed sponsor use log 44
`is preferably maintained by the facilitator and can be made
`available to interposed sponsor via two-way communica-
`10 tions path 52.
`In accordance with the preferred embodiment, before
`consumer 20 initiates a transaction cycle (as shown in FIG.
`2), facilitator 10 preferably offers to intellectual property
`rights holder 30 its venue or site lOA on a telecommunica-
`15 tions network 50 to distribute IP rights holder's intellectual
`property 36. Facilitator and IP rights holder preferably enter
`into a licensing agreement 32 specifYing that royalties 38
`will come from monies paid 48 from interposed sponsor 40.
`Facilitator will then preferably maintain use logs 34 to keep
`20 accurate records of the number of transaction cycles a
`specified IP is a part of, and as to, the royalties due and
`subsequent payments. In accordance with the preferred
`embodiment, IP rights holder will be barred from playing the
`"consumer" in the transaction cycle, preventing IP rights
`25 holder from gaining profit at the expense of the interposed
`sponsor.
`Upon completion of above agreement, the IP rights holder
`provides facilitator with access to the IP products, by either
`making it available on IP rights holder's computer 30A
`30 connected to said telecommunications network, or by send(cid:173)
`ing a copy to reside at facilitator's site lOA. Quality control
`issues can be addressed at this time, where the best possible
`original source will be digitized in a manner most suited for
`distribution of the product over a telecommunications net-
`35 work.
`In accordance with the preferred embodiment, facilitator
`offers to an interposed sponsor 40 a venue or site lOA on a
`telecommunications network where interposed sponsor may
`exhibit a message 46 to consumer 20. Facilitator and inter-
`40 posed sponsor enter into an agreement 42 specifYing the fee
`48 per exhibition of said message, which will be the source
`of the royalty 38 for the subsequently transferred IP 36
`described above. This agreement 42 may also specify which
`specific IP 36 and the number of its transaction cycles the
`45 interposed sponsor will contract for. In this way, the inter(cid:173)
`posed sponsor can "target" consumers most closely associ(cid:173)
`ated in demographic terms with said specific IP. Facilitator
`will provide a use log 44 to the interposed sponsor, account-
`ing for each transaction cycle.
`In accordance with the preferred embodiment, facilitator
`may provide certain safeguards against unwanted use of the
`transaction cycle: the barring of IP rights holders to use the
`transaction cycle to generate royalties for themselves; bar(cid:173)
`ring of multiple transactions from the same consumer for the
`55 same specific IP (preventing "spming" and/or unwanted
`duplicate exhibitions of the same message to the same
`consumer).
`Additional agreement specifics include guidelines for the
`content of the message itself: its compatibility to run on said
`60 telecommunications network; its dimensions in pixels; its
`file size; its duration; the number of queries that preferably
`require responses from the consumer; consumer privacy
`issues; community moral standards, review and approval
`prior to use by facilitator.
`Upon completion of above agreement, the interposed
`sponsor preferably provides facilitator with access to the
`message, by either making it available on interposed span-
`
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`US 7,346,545 B2
`
`5
`sor's computer 40A connected to said telecommunications
`network, or by sending a copy to reside at facilitator's site
`lOA.
`Consumer's sign-up agreement 22 specifies how con(cid:173)
`sumer may use facilitator's venue/site lOA. Consumer pref(cid:173)
`erably provides facilitator with sufficient identification to
`satisfY facilitator that said consumer is nnique to facilitator's
`site (protecting the interests of the interposed sponsor by
`preventing duplicate identities by the same consumer, there(cid:173)
`fore preventing the exhibition of the same message to the
`same consumer posing as two or more consumers; prevent(cid:173)
`ing IP rights holders from posing as consumer or multiple
`consumers to unjustly benefit from accumulating royalties
`through transaction cycles) and to provide country of resi(cid:173)
`dency as a further criteria for interposed sponsor. Addition(cid:173)
`ally, consumer preferably accepts to use the obtained IP
`product in accordance with current copyright laws. Upon a
`positive determination of the above factors, facilitator issues
`a nnique password 12 to consumer. As previously men(cid:173)
`tioned, facilitator will maintain a use log 24 for the con(cid:173)
`sumer, accounting for each transaction cycle.
`The last two consumer-related items, message 46 and IP
`36, are best described in FIG. 2 below, which illustrates the
`transaction cycle.
`FIG. 2 illustrates the preferred embodiment of a complete
`consumer transaction cycle. In step (a) the consumer uses
`facilitator's Uniform Resource Locator (URL) within a
`telecommnnications network 50 to reach (b) facilitator's site
`1 OA. In step (c) consumer is given the opportunity to browse
`though titles and descriptions of any of the intellectual
`properties 36 that have been licensed to the facilitator from
`various IP rights holders 30. This process may include a
`brief sample of the IP to give the consumer an opportunity
`to evaluate a specific IP prior to selecting it.
`In step (d), consumer preferably selects a specific IP, such
`as a musical composition or a news article, through a link at
`the facilitator's site. The consumer may make more than one
`selection at this time, and each selection's identifier can be
`temporarily stored in a queue for the consumer's ease of
`completing the transaction cycle.
`The consumer then requests to receive the selected IP (e)
`from the facilitator. The facilitator's site preferably responds
`with a request (f) to complete a sign-up agreement 22. The
`reason for placing this request at this point in the process is
`to insure that the consumer is already involved in the
`process, having browsed and fonnd at least one IP, and
`would be less likely to back out of the process when asked
`for personal information. However, in other embodiments,
`this sign-up agreement portion could be moved to an earlier
`point in the complete transaction process.
`The consumer responds to above prompt (g). If the
`consumer declines to complete a sign-up agreement (hl)
`consumer is then free to exit the site and is offered an
`opportnnity to begin the transaction process anew. If the
`consumer has previously completed the sign-up agreement
`(h2) they need only enter their unique password 12 to
`continue on (see step (o) in FIG. 2).
`A consumer who elects to complete the sign-up agreement
`22 does so in step (i). Consumer provides facilitator with
`sufficient identification to satisfY facilitator that said con(cid:173)
`sumer is nnique to facilitator's site. Additionally, consumer
`preferably chooses to accept or decline a use agreement
`stating that consumer will use IP in accordance with current
`copyright laws G). If consumer declines to accept these
`terms (kl) they are routed back to the starting page (b) and
`
`6
`offered another opportunity to begin a transaction cycle. If
`consumer accepts terms (k2), then facilitator processes con(cid:173)
`sumer's data (!).
`Upon a positive determination of the above factors (nl),
`a unique password 12 is issued by facilitator to consumer
`(n2). Consumer retrieves password (n3) and proceeds to step
`(o). If consumer is declined (ml), then reasons for decline
`are explained (m2) and consumer is offered a retry (m3). If
`declined a second time (m4), reasons for being declined are
`10 again explained (m5) at which time consumer can opt to exit
`site (m6).
`Step ( o) is consumer sign-in, where consumer preferably
`enters nnique password 12. Facilitator then verifies pass(cid:173)
`word and the titles of the selected IP product 36 (p ). If none
`15 of the IP product titles have prior transactions with consumer
`(r), then consumer's transaction moves to step (s). If con(cid:173)
`sumer's IP product has been previously transferred (ql) to
`same consumer (and if this is a negative stipulation on behalf
`of interposed sponsor or IP rights holder) then facilitator
`20 asks for a new IP or IP product list ( q2). Consumer can then
`browse for new titles and submit new list ( q4), and, provided
`new list has no previous transfers ( q5), then consumer
`proceeds to step (s ).
`At step (s), facilitator analyzes consumer's use log 24 for
`25 a list of previously viewed interposed sponsor messages.
`After negotiating any possible sponsor prerequisites, facili(cid:173)
`tator may select appropriate sponsor message 46 (t). In
`accordance with other embodiments, a sponsor may select
`the appropriate message. Facilitator then transmits selected
`30 interposed sponsor's message to consumer (u). Consumer
`views selected message (v). If the message is interactive (vl)
`then consumer preferably responds to any and all prompts
`(v2). Since consumer privacy issues are paramount, the
`types of queries will not be personal in nature. However,
`35 consumer can decline to respond and can exit transaction
`cycle at this point (v3). Facilitator receives consumer's
`responses (v4), and forwards consumer's responses to inter(cid:173)
`posed sponsor (v5) via telecommnnications network. If
`message is not interactive (v6), then it runs until completion
`40 on its own or for a fixed duration of time.
`Upon completion of sponsor's message, IP product 36 is
`preferably transferred to consumer via methods or means
`such as a File Transfer Protocol (FTP) system (w). This will
`insure that IP file does not begin "streaming" within con-
`45 sumer's browser application and thus not end up residing on
`consumer's computer hard drive. Upon completion of IP
`transfer (x), consumer can opt to start a new transaction
`cycle (xl) by returning to the start page (x2), or consumer
`can exit site (x3). Facilitator thereafter preferably updates all
`50 use logs for all parties (y ): sponsor use log 44 (yl ), consumer
`use log 24 (y2) and IP rights holder use log 34 (v3).
`FIG. 3 describes the timeline for the interposed sponsor in
`accordance with the preferred embodiment of the present
`invention. At step (aa) facilitator offers message availability
`55 to interposed sponsor. At step (bb) facilitator and interposed
`sponsor enter into an agreement 42 specifying the fee 48 per
`exhibition of said message, which will be the source of the
`royalty 38 for the subsequently transferred IP 36. This
`agreement 42 may also specifY which specific IP 36 and the
`60 number of its transaction cycles the interposed sponsor will
`contract for. In this way, interposed sponsor can "target"
`consumers most closely associated in demographic terms
`with said specific IP.
`In step ( cc) interposed sponsor prepares message per
`65 guidelines for the content of the message itself: its compat(cid:173)
`ibility to run on said telecommnnications network; its
`dimensions in pixels; its file size; its duration; the number of
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`US 7,346,545 B2
`
`15
`
`7
`queries that preferably require responses from the consumer;
`consumer privacy issues; review and approval prior to use
`by facilitator. Interposed sponsor provides facilitator with
`access to the message ( dd), by either making it available on
`interposed sponsor's computer 40A connected to said tele(cid:173)
`communications network, or by sending a copy to reside at
`facilitator's site 1 OA.
`At step ( ee) facilitator matches up consumer's IP product
`choice with sponsor's message and transmits it to consumer.
`At (ff) through (gg6) consumer views sponsor's ad in same 10
`manner as described in FIG. 2, steps (v) through (v7). At step
`(hh) facilitator submits sponsor's use log 44 to sponsor as
`verification of messages exhibited prior to certain IP trans(cid:173)
`fers. Finally, sponsor pays monies 48 to facilitator (ii), per
`agreement reached at step (bb).
`FIG. 4 illustrates the step-by-step process between facili(cid:173)
`tator and intellectual property rights holder. At step Gj)
`facilitator offers its site as a venue for the distribution of IP
`rights holder's IP product. Facilitator and IP rights holder
`enter into a licensing agreement (kk) 32 specifYing that 20
`royalties 38 will come from monies paid 48 from interposed
`sponsor 40. Facilitator will maintain use logs 34 to keep
`accurate records of the number of transaction cycles a
`specified IP product is a part of, the royalties due and
`subsequent payment. IP rights holder will be barred from 25
`playing the "consumer" in the transaction cycle, preventing
`IP rights holder from gaining profit at the expense of the
`interposed sponsor.
`It is possible that one IP product has more than one rights
`holder. In recorded music, for instance, there can be the 30
`record company who claims copyright on the sound record(cid:173)
`ing, and the songwriter and publisher who claim copyright
`on the composition. The songwriter and publisher are
`entitled to a statutory royalty enacted by Congress for each
`copy made from a mechanical license. Often the record 35
`company collects for all parties and distributes the funds per
`their own contracts between songwriter and publisher. Steps
`(lll) through (ll4) address these issues.
`At step (mm) IP rights holder provides facilitator access
`to IP products by either making it available on IP rights
`holder's computer 30A connected to said telecommunica(cid:173)
`tions network, or by sending a copy to reside at facilitator's
`site lOA. Quality control issues will be addressed at this
`time, where the best possible original source will be digi-
`tized in a manner most suited for distribution over a tele-
`communications network.
`Facilitator then makes IP products available to consumer
`through listing at site (nn). Consumer selects IP products at
`step ( oo ), then preferably receives said IP through methods
`such as an FTP system (pp) (explained in greater detail back
`at FIG. 2, step (w)).
`At step ( qq) facilitator provides IP rights holder with use
`log 34, describing the number of times the IP product has
`been transferred. Facilitator then pays license fee 38 to IP
`rights holder (rr), (rr3) and (rr4); with special provisions for
`split payments to multiple rights holders if said IP has
`multiple rights holders (rrl) and (rr2).
`While the above description contains many specific
`details, these should not be construed as limitations on the
`scope of the invention, but rather as an exemplification of
`one preferred embodiment thereof. Other variations are
`possible. For example, facilitator offers a "client applica(cid:173)
`tion" to consumer, which acts as a browser, but with only
`one possible URL: that of the facilitator, ensuring better 65
`connectivity and possibly keeping consumer at facilitator's
`venue longer. Accordingly, the scope of the invention should
`
`8
`be determined not by the preferred embodiment illustrated,
`but by the appended claims and their legal equivalents, as
`put forth hereinafter.
`What I claim:
`1. A method for distribution of products over the Internet
`via a facilitator, said method comprising the steps of:
`a first step of receiving, from a content provider, media
`products that are covered by intellectual-property rights
`protection and are available for purchase, wherein each
`said media product being comprised of at least one of
`text data, music data, and video data;
`a second step of selecting a sponsor message to be
`associated with the media product, said sponsor mes(cid:173)
`sage being selected from a plurality of sponsor mes(cid:173)
`sages, said second step including accessing an activity
`log to verifY that the total number of times which the
`sponsor message has been previously presented is less
`than the number of transaction cycles contracted by the
`sponsor of the sponsor message;
`a third step of providing the media product for sale at an
`Internet website;
`a fourth step of restricting general public access to said
`media product;
`a fifth step of offering to a consumer access to the media
`product without charge to the consumer on the precon(cid:173)
`dition that the consumer views the sponsor message;
`a sixth step of receiving from the consumer a request to
`view the sponsor message, wherein the consumer sub(cid:173)
`mits said request in response to being offered access to
`the media product;
`a seventh step of, in response to receiving the request
`from the consumer, facilitating the display of a sponsor
`message to the consumer;
`an eighth step of, if the sponsor message is not an
`interactive message, allowing said consumer access to
`said media product after said step of facilitating the
`display of said sponsor message;
`a ninth step of, if the sponsor message is an interactive
`message, presenting at least one query to the consumer
`and allowing said consumer access to said media
`product after receiving a response to said at least one
`query;
`a tenth step of recording the transaction event to the
`activity log, said tenth step including updating the total
`number of times the sponsor message has been pre(cid:173)
`sented; and
`an eleventh step of receiving payment from the sponsor of
`the sponsor message displayed.
`2. The method for distribution of products of claim 1,
`50 further comprising the step of paying royalties to the content
`provider.
`3. The method for distribution of products of claim 1,
`further comprising the step of entering into a license agree(cid:173)
`ment with the owner of the intellectual property rights
`55 associated with said media product.
`4. The method for distribution of products of claim 1,
`further comprising the step of barring the content provider
`from pretending to be said consumer.
`5. The method for distribution of products of claim 1,
`60 further comprising the step of tendering payment to the
`content provider by said facilitator.
`6. The method for distribution of products of claim 1,
`further comprising the step of issuing to said consumer a
`password.
`7. The method for distribution of products of claim 1,
`further comprising the step of verifYing a