United States Patent
`
`[19]
`
`Walker et al.
`
`[11] Patent Number:
`
`6,134,534
`
`[45] Date of Patent:
`
`*Oct. 17, 2000
`
`US006134534A
`
`97/46961
`
`12/1997 WIPO.
`
`OTHER PUBLICATIONS
`
`Lancorp Mortage Services, http://WvvW.lancorp—mortgage-
`.com/retailpa.htm, 1998.
`
`(List continued on next page.)
`
`Primary Examiner—Allen R. MacDonald
`Assistant Examiner—Penny Caudle
`Attorney, Agent, or Firm—Morgan & Finnegan, L.L.P.;
`Jeffrey L. Brandt
`
`[57]
`
`ABSTRACT
`
`A conditional purchase offer (CPO) management system is
`disclosed for receiving CPOs from one or more customers,
`such as cruise and airline passengers, and for evaluating the
`received CPOs against a number of CPO rules defined by a
`plurality of sellers, such as cruise operators and airlines, to
`determine Whether any seller is Willing to accept a given
`CPO. A CPO is a binding offer containing one or more
`conditions submitted by a customer for purchase of an item,
`such as airline travel, at a customer-defined price. A CPO
`rule is a set of restrictions defined by a given seller, such as
`a cruise operator or an airline, to define a combination of
`restrictions for which the seller is Willing to accept a
`predefined price. The CPO rules may be securely stored by
`one or more servers. The CPO management system permits
`a seller to correct for forecasting errors, if necessary, or other
`competitive forces which have produced excess capacity, by
`providing inventory for sale to CPO customers. If a CPO is
`accepted by more than one seller, the CPO management
`system executes a post-sell multi-bind process to permit
`each accepting seller to directly market to the customer and
`post-sell their product. Thus, the customer selects for him-
`self which seller acceptance to utilize, based on materials
`furnished by each seller. The CPO management system may
`optionally also provide a CPO which specifies preferred
`sellers to the excluded sellers who may make counteroffers
`to the customer, in an attempt to obtain the business, before
`one of the specified sellers accepts the CPO.
`
`12 Claims, 34 Drawing Sheets
`
`[54]
`
`[75]
`
`CONDITIONAL PURCHASE OFFER
`MANAGEMENT SYSTEM FOR CRUISES
`
`Inventors: Jay S. Walker, Ridgefield; Thomas M.
`Sparico, Riverside; T. Scott Case,
`Darien, all of Conn.; Bruce Schneier,
`Minneapolis, Minn.
`
`[73]
`
`Assignee: priceline.com Incorporated, Stamford,
`Conn.
`
`Notice:
`
`This patent is subject to a terminal dis-
`claimer.
`
`Appl. No.: 08/923,618
`
`Filed:
`
`Sep. 4, 1997
`
`Related U.S. Application Data
`
`Continuati0n—in—part of application No. 08/889,319, Jul. 8,
`1997, which is a continuation—in—part of application No.
`08/707,660, Sep. 4, 1996, Pat. No. 5,794,207.
`
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`I I
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`
`
`SYSTEMS
`Amuwe
`F;$:$§\\AIA/TJFIQV
`(g
`
`
`
`____________________________ __
`AIRLINE1
`
`
`REVENUE
`I CONDITIONALFURCHASEOFFER (CPO) MANAGEMENT
`'
`
`MANAGEMENT
`SYSTEM
`I
`SECURED
`CONDITIONAL I
`SYSTEM
`
`SERVER‘
`fl
`PURCHASE }
`
`
`
`
`CPO
`A‘RL'N§0:)
`OFFER (CPD) 1
`QUEWES
`_
`RESKEEIII/|§$|ON
`3 '
`
`SYSTEM (ARS)
`1
`CUSTOMER
`CPO CENTRAL
`RESERVATQ 5
`I
`OR TRAVEL
`
`SERVER
`I N
`E
`}
`AGENT
`
`:::I::°
`~
`4
`
`
`CPO
`"'R‘-'N§3“0
`:
`RESPONSE 1
`
`QUERIES
`—
`"‘“L‘”E N
`TO CPO
`I
`
`REVENUE
`
`MANAGEMENT
`I
`____________________ __
`
`INFORMATION
`
`“"1
`o'J$?.£‘§§I‘lD
`RESERVATIONS
`
`CENTRAL
`RESEHVATI N
`RESERVATION
`° 3
`SVSTEM(CFlS)
`400
`
`
`
`L33
`
`
`
`1 FLIGHT SCHEDULE. INVENTORY AND PUBLISHED FARE INFORMATION
`
`PLAID 1016
`
`

`
`6,134,534
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`
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`
`6,134,534
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`15.
`
`“Letter to Business Extras”, The San Francisco Chronicle,
`Dec. 26, 1989 at p. C7.
`Schrage, Michael, “An Experiment in Economic Theory;
`Labs Testing Real Markets”, The Record Section B1, Nov.
`26, 1989.
`Schrage, Michael Innovation/Micheal Schrage: Laboratory
`Experiments with Market Economics, Los Angeles Times,
`Nov. 23, 1989 at p. D1.
`Golden, Fran “AAl’s Riga Doubts Marketel’s Appeal to
`Retailers”, Travel Weekly, Nov. 13, 1989.
`Del Rosso, Laura, Firm Proposes ticket—bidding system;
`Marketel explores electronic auction of travel; Marketel
`International., Travel Weekly, Section No. 91. vol. 48, p. 1;
`Nov. 13, 1989.
`Carlsen, Clifford, “Polaris Group Set to Fly the Leveraged
`Sky”, San Francisco Business Times, Nov. 6, 1989 at p. 1.
`Kuttner, Robert, “Computers May Turn the World into One
`Big Commodities Pit”, Business Week, Sep. 11, 1989.
`Carlsen, Clifford, “From Airline Tickets to Human Organs,
`the Electronic Markets Are Booming”San Francisco Busi-
`ness Times, Aug. 14, 1989 at p. 17.
`“Public May Submit Bids To Get Bargins Rates”, Wall
`Street Journal, Section 2: p. 1, Column 1; Aug. 1, 1989.
`American Airlines Internet Silent Auction, selected pages
`downloaded from www.americanair.com.
`
`Apollo Host Computer, selected pages downloaded from
`www.appollo.com.
`tickets.”
`“Auctioning unsold airline
`civ.org./GIB/BOV—409.HTMI), at p. 1.
`Cathay Pacific:CyberTraveler Auction #3 —Official Rules,
`selected pages downloaded from www.cathaypacific.com.
`CMS Online: About Collector’s Super Mall downloaded
`from www.csmonline.com.
`
`(http://www.new-
`
`Sabre Decision Technologies, selected pages downloaded
`from www.sabre.com.
`
`PhoneMiser: Frequently Asked Questions, downloaded
`from www.phonemiser.com.
`The United Computer Exchange: How It All Works, selected
`pages downloaded from www.uce.com.
`Tired of Shopping For the Best Home Loan?, Mortgage
`Loan Specialists.
`Koepper, Ken, “Room Inventory Auctioning: The Next CRS
`Generation”, Lodging, Jan. 1990 at p. 26, 29-30.
`
`

`
`U.S. Patent
`
`Oct. 17,2000
`
`Sheet 1 of 34
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`6,134,534
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`U.S. Patent
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`Oct. 17,2000
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`Sheet 2 of 34
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`6,134,534
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`CPO MANAGEMENT
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`
`U.S. Patent
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`Oct. 17,2000
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`Sheet 3 0f 34
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`6,134,534
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`

`
`U.S. Patent
`
`Oct. 17, 2000
`
`Sheet 4 of 34
`
`6,134,534
`
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`
`U.S. Patent
`
`Oct. 17,2000
`
`Sheet 5 0f 34
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`6,134,534
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`
`U.S. Patent
`
`Oct. 17,2000
`
`Sheet 6 0f 34
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`6,134,534
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`Oct. 17, 2000
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`U.S. Patent
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`U.S. Patent
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`Oct. 17,2000
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`Sheet 21 0f 34
`
`6,134,534
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`

`
`U.S. Patent
`
`Oct. 17, 2000
`
`Sheet 22 of 34
`
`6,134,534
`
`o FROM FIG. 16a
`
`EXECUTE EVALUATION PROCESS (FIG. 17) FOR EACH AIRLINE TO
`EVALUATE CPO AGAINST SECURED AIRLINES RULES DATABASE
`
`I_I3‘r_0
`
`IS CPO
`
`ACCEPTED BY AT LEAST ONE
`
`AIRLINE?
`
`I_6_4A
`
`DID AT LEAST
`ONE AIRLINE PROVIDE A
`NO
`COUNTER OFFER?
`
`TO
`E,G_ 16¢
`
`No
`
`IS CPO
`ACCEPTED BY
`MORE THAN ONE
`AIRLINE’?
`
`CREATE RECORD OF COUNTER
`OFFER IN CPO DATABASE
`E
`
`
`
`
`
`
`
`
`E3.
`
`
`
`TRANSMIT BINDING COUNTER
`OFFEFI(S) TO CUSTOMER
`
`1664
`
`
`EXECUTE TIE BREAKER
`—
`ALGORITHM TO IDENTIFY
`
`WHICH AIRLINE ACCEPTANCE
`DOES
`
`TO UTILIzE
`CUSTOMER ACCEPT
`1652
`
`——
`COUNTER
`OFFER?
`
`ma
`
`NO
`
`
`
`
`3 T
`
`O
`FIG. 16c
`
`
`
`YES
`
`TO FIG. 160
`
`FIG. 16b
`
`

`
`U.S. Patent
`
`Oct. 17, 2000
`
`Sheet 23 of 34
`
`6,134,534
`
`0 FROM FIG. 16b
`
`0 FROM FIG. 16b
`
`° FROM FIG. 16b
`
`EXTRACT RECEIVED
`
`INFORMATION FROM
`
`TRANSMIT REJECTION TO
`
`CUSTOMER
`
`1690
`
`CUSTOMER AND CPO
`DATABASES AND
`
`RECEIVED INVENTORYI
`
`FLIGHT INFORMATION
`TO CREATE
`
`PASSENGER NAME
`
`RECORD (PNR)
`E72.
`
`1696
`
`TRANSMIT REJECTION T0
`AIRLINES MAKING
`COUNTER OFFER
`
`UPDATE CPO DATABASE
`
`STATUS TO ''REJECTED''
`
`UPDATE CPO DATABASE
`
`STATUS TO "REJECTED"
`
`E
`
`&
`
`
`
`TRANSMIT (PNR) TO
`AIRLINE TO ESTABLISH
`
`
`
`RESERVATION
`
`fi7_4
`
`
`
`
`
`
`
`
`
`
`
`
`TRANSMIT MERCHANT
`
`ID, BILLING
`DESCRIPTOR,
`PURCHASE AMOUNT
`
`AND CREDIT CARD
`
`INFORMATION TO
`
`CREDIT CARD ISSUER
`
`
`
`
`
`FOR PAYMENT
`1§7_§
`
`UPDATE CPO
`
`
`
`NUMBER AND
`
`SET STATUS TO
`
`"ACCEPTED"
`
`
`DATABASE WITH PNR
`
`
`
`
`
`EXECUTE AUDIT
`
`
`PROCESS (FIG. 18) FOR
`EACH AIRLINE
`
`
`
`
`
`E
`
`END Hi
`
`FIG. 160
`
`1682
`
`
`

`
`U.S. Patent
`
`Oct. 17, 2000
`
`Sheet 24 of 34
`
`6,134,534
`
`EVALUATION PROCESS
`
`(CPO)
`
`1700
`
`EXTRACT ORIGINATING AND DESTINATION CITIES
`
`(O&D PAIR) FROM CPO RECORD E
`
`IDENTIFY ALL RULES PERTINENT TO EXTRACTED
`O&D PAIR
`1710
`
`FOR EACH IDENTIFIED RULE, COMPARE CUSTOMER RESTRICTIONS FROM FIELD 960
`THROUGH 995 OF CPO DATABASE WITH AIRLINE RESTRICTIONS FROM FIELDS 1016
`
`THROUGH 1044 OF SECURED AIRLINE RULES DATABASE
`
`1715
`
`
`
`
`DOES CPO
`SATISFY AT LEAST ONE AIRLINE RULE?
`
`
`NO
`
`TO FIG. 17b
`
`
`
` SATISFIED
`N0
`RULES CONDITIONED ON AVAILABLE
`
`
`INVENTORY?
`
`
`
`E
`
`
`
`ACCESS CRS TO IDENTIFY FLIGHTS MEETING
`
`RESTRICTIONS OF SATISFIED RULE AND CPO AND
`
`
`HAVING SEATS AVAILABLE E
`
`N0
`
`
`
`
`HAS MORE
`THAN ONE FLIGHT SATISFYING THE CPO BEEN
`
`IDENTIFIED?
`
`1735
`
`
`YES
`
`TO FIG. 17b
`
`FIG. 17a
`
`TO FIG. 17b
`
`

`
`U.S. Patent
`
`Oct. 17, 2000
`
`Sheet 25 of 34
`
`6,134,534
`
`FROM FIG.
`
`17a
`
`FROM FIG.
`
`FROM FIG.
`
`17a
`
`17a
`
`
`
`
`IS CPO WITHIN
`
`AIRLINE SPECIFIED
`TOLERANCE FOR
`
`
`GENERATING COUNTER
`OFFER?
`
`NO
`
`SELECT FLIGHT WHICH MOST
`
`
`CLOSELY MATCHES CUSTOMER
`
`PREFERENCE on MAXIMIZES
`
`
`CONVENIENCE
`149
`
`
`
`
`
`
`
`
`17_5Q
`
`SET RESPONSE
`TO "REJECT"
`
`1_75fi
`
`
`GENERATE A COUNTER OFFER
`WITH APPROPRIATE MODIFIED
`TERMS
`
`
`
`SET REPSONSE TO "ACCEPT"
`
`E
`
`
`
`E
`
`SET RESPONSE TO "COUNTER"
`
`lfl
`
`
`
`RETURN (RESPONSE, FLIGHT NUMBER)
`1flQ
`
`
`
`FIG. 17b
`
`

`
`U.S. Patent
`
`Oct. 17, 2000
`
`Sheet 26 of 34
`
`6,134,534
`
`
`
`AUDIT PROCESS
`
`
`
`
`
`
`
`DECREMENT INVENTORY IN
`
`SECURED AIRLINE RULES
`
`
`
`DATABASE,
`
`IF NECESSARY
`
`E
`
`
` CREATE RECORD IN AIRLINE AUDIT
`DATABASE
`
`
` E
`
`
`
`
`RETURN 1 20
`
`FIG. 18
`
`

`
`U.S. Patent
`
`Oct. 17, 2000
`
`Sheet 27 of 34
`
`6,134,534
`
`CPO RULE GENERATION PROCESS 1900
`
`No
`
`
`
`
`IS
`CURRENT INVENTORY
`
`ALLOCATION THE INITIAL
`ALLOCATION FOR
`
`THIS FLIGHT?
`
`
`YES
`
`
`
`
`
`IS THE FLIGHT
`
`DOES
`LIKELY TO DEPART WITH EMPTY
`DIFFERENCE
`
`SEATS?
`BETWEEN FORECASTED
`
`AND ACUTAL DEMAND EXCEED
`E
`
`PREDEFINED TOLERANCES
`FOR ANY FARE
`
`CLAS