US008195578B2
`
`(12) United States Patent
`Luzzatto
`
`(10) Patent No.:
`(45) Date of Patent:
`
`US 8,195,578 B2
`Jun. 5, 2012
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`(54) ELECTRONIC CURRENCY, ELECTRONIC
`WALLET THEREFOR AND ELECTRONIC
`PAYMENT SYSTEMS EMPLOYING THEM
`
`(75) Inventor: Kfir Luzzatto, Omer (IL)
`(73) Assignee: Moneycat Ltd., Omer (IL)
`
`(*) Notice:
`
`Subject to any disclaimer, the term of this
`patent is extended or adjusted under 35
`U.S.C. 154(b) by 0 days.
`
`(21) Appl. No.: 12/539,141
`
`(22) Filed:
`
`Aug. 11, 2009
`
`(65)
`
`Prior Publication Data
`|US 2009/02998.72 A1
`Dec. 3, 2009
`
`Related U.S. Application Data
`(63) Continuation of application No. 09/644,104, filed on
`Aug. 23, 2000, now Pat. No. 7,590,602.
`Foreign Application Priority Data
`
`(30)
`
`Aug. 26, 1999 (IL) .......................................... 131612
`Aug. 31, 1999 (IL) .......................................... 131672
`Nov. 14, 1999 (IL) .......................................... 132919
`
`(51) Int. Cl.
`(2012.01)
`G06Q 20/00
`(2012.01)
`G06Q 30/00
`(2012.01)
`G06Q 40/00
`(52) U.S. Cl. ......... 705/69; 902/1; 902/2; 902/7; 902/24;
`902/41
`(58) Field of Classification Search .................... 705/69;
`902/1, 2, 7, 24, 41
`See application file for complete search history.
`
`
`
`(56)
`
`References Cited
`
`|U.S. PATENT DOCUMENTS
`5,461,217 A * 10/1995 Claus ............................ 235/380
`5,748,737 A * 5/1998 Daggar ........................... 705/41
`5,870,473 A * 2/1999 Boesch et al. .................. 705/78
`H1794 H +
`4/1999 Claus .............
`... 235/380
`5,983,207 A * 11/1999 Turk et al. ....................... 705/39
`6,003,764 A * 12/1999 De Rooijet al. .............. 235/379
`6,039,250 A
`3/2000 Ito et al.
`6,188,993 B1
`2/2001 Eng
`6,289,462 B1
`9/2001 McNabb et al.
`6,728,880 B1
`4/2004 Sites
`(Continued)
`
`WO
`
`FOREIGN PATENT DOCUMENTS
`99/24921
`5/1999
`OTHER PUBLICATIONS
`Electronic Payment Systems. O’Mahony, Donal et al. Artech House,
`Boston, MA, 1997. ISBN 0-89006–925-5. Front matter, back matter,
`contents, chapters 1 and 5, and index included.”
`(Continued)
`Primary Examiner – Mamon Obeid
`Assistant Examiner – Monica Mandel
`(74) Attorney, Agent, or Firm – Roach Brown McCarthy &
`Gruber, P.C.; Kevin D. McCarthy
`
`ABSTRACT
`(57)
`Electronic currency consists of data in a form suitable to be
`stored in a user’s data storage medium, comprising informa
`tion on the data value, identification of each specific set of
`data or data point, and authentication information suitable to
`verify that said data has been generated by a specific Currency
`Issuing Authority (CIA). A method and a system for effecting
`currency transactions between two users over the Internet or
`other communication network are also described.
`
`23 Claims, 10 Drawing Sheets
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`|U.S. PATENT DOCUMENTS
`7,010,512 B1* 3/2006 Gillin et al. ..................... 705/39
`7,089,208 B1
`8/2006 Levchin
`7,181,429 B1* 2/2007 Lee ................................. 705/41
`... 705/43
`7,366,699 B1 * 4/2008 Kusakabe et al.
`.
`... 705/39
`.
`2002/0004779 A1* 1/2002 Turk et al. ...
`... 463/25
`2002/0151356 A1 * 10/2002 Burns et al. ....
`2004/0083182 A1 * 4/2004 Moribatake et al.
`... 705/64
`2007/0244812 A1 * 10/2007 Turk et al. ....................... 705/39
`OTHER PUBLICATIONS
`Digital Cash: Commerce on the Net. Wayner, Peter. 2” Edition. AP
`Professional, Boston, MA, 1997. ISBN 0-12-788772–5. Front matter,
`Contents, Chapters 9 (pp. 131-139) and 16 (pp. 189-197), Index, and
`back matter included.*
`U.S. Appl. No. 60/172,311, filed Dec. 17, 1999; publicly available on
`Feb. 13, 2001 when U.S. patent No. 6188993 issued; 188 pages.
`A Certified copy of U.S. Appl. No. 60/144,633, filed Jul. 19, 1999;
`publicly available on Feb. 13, 2001 when U.S. patent No. 6188993
`issued; 15 pages.
`U.S. Appl. No. 60/131,785, filed Apr. 30, 1999; publicly available on
`Feb. 13, 2001 when U.S. patent No. 6188993 issued; 13 pages.
`A withdrawn complaint regarding U.S. patent No. 7,590,602; filed on
`Aug. 30, 2010 at United Stated District Court for the District of
`Delaware, 4 pages.
`
`M. Bellare et al., “VarietyCash; a Multi-purpose Electronic Payment
`System”, Proceedings of the 3rd Usenix Workshop on Electronic
`Commerce, 17 pages; Aug. 31-Sep. 3, 1998.
`Gennady Medvinsky et al., “NetCash: A design for practical elec
`tronic currency on the Internet”, Association for Computing Machin
`ery, 5 pages, Nov. 1993.
`Ex Parte Reexamination Request of U.S. patent No. 7,590,602,
`mailed to the USPTO on Oct. 31, 2011, 45 pages.
`Claim chart of Ex Parte Reexamination Request of U.S. patent No.
`7,590,602 in view of Bellare reference—identified as CC-A, mailed
`to the USPTO on Oct. 31, 2011, 11 pages.
`Claim chart of Ex Parte Reexamination Request of U.S. patent No.
`7,590,602 in view of Bellare and Ito references—identified as CC-B,
`mailed to the USPTO on Oct. 31, 2011, 3 pages.
`Claim chart of Ex Parte Reexamination Request of U.S. patent No.
`7,590,602 in view of Medninsky and Bellare references—identified
`as CC-C, mailed to the USPTO on Oct. 31, 2011, 7 pages.
`Claim chart of Ex Parte Reexamination Request of U.S. patent No.
`7,590,602 in view of Bellare, Medninsky and Ito references—iden
`tified as CC-D, mailed to the USPTO on Oct. 31, 2011, 3 pages.
`Claim chart of Ex Parte Reexamination Request of U.S. patent No.
`7,590,602 in view of Bellare and Ito references—identified as CC-E,
`mailed to the USPTO on Oct. 31, 2011, 26 pages.
`* cited by examiner
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`US 8,195,578 B2
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`1
`ELECTRONIC CURRENCY, ELECTRONIC
`WALLET THEREFOR AND ELECTRONIC
`PAYMENT SYSTEMS EMPLOYING THEM
`
`REFERENCE TO CO-PENDING APPLICATIONS
`
`5
`
`This application claims priority as a continuation applica
`tion of U.S. patent application Ser. No. 09/644,104, filed on
`Aug. 23, 2000 (allowed); which claims priority to (a) Israeli
`patent application number 132919, filed on Nov. 14, 1999; (b)
`Israeli patent application number 131672, filed on Aug. 31,
`1999; and (c) Israeli patent application number 131612, filed
`on Aug. 26, 1999.
`
`FIELD OF THE INVENTION
`
`10
`
`15
`
`The invention relates to electronic currency. More particu
`larly, the invention relates to electronic cash money “to the
`bearer”, to electronic wallets carrying such cash money, and
`to electronic payment systems employing them.
`
`20
`
`BACKGROUND OF THE INVENTION
`
`25
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`30
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`45
`
`Electronic payment transactions have become increasingly
`important, and tremendous efforts are constantly placed into
`the development of suitable systems for carrying out such
`transactions. One such system is the so-called “electronic
`wallet” or “electronic purse”, which holds sums of money
`withdrawn from a bank, which can be used to pay for goods
`and services. The electronic wallet present several problems
`which, so far, have limited its use: it has a considerable
`security problem, inasmuch as the loss of the wallet entails
`the loss of the money it carries, it requires sophisticated
`storage means, coupled with a “smart card”, as well as com
`plicated and expensive encryption procedures. It further pre
`35
`sents a disadvantage that renders it unattractive for many
`persons, namely, it causes a loss offeeling of control over the
`money it contains. Since all procedures are automated,
`encrypted and electronic, with only minimal intervention of
`the owner, many owners feel that they have no real control
`40
`over the movement of their money.
`Electronic cash has many applications, ranging from the
`use of electronic wallets carried on the owner, in lieu of credit
`cards, in daily transactions and including payments for goods
`and services purchased over the Internet. While purchases
`made over the Internet are by no means the sole use for the
`electronic cash, they probably are the most problematic,
`mainly because of security problems.
`The problem of payments over the Internet is well known,
`and many solutions to it have been suggested. The problem is
`a complicated one, because the use of credit cards over the
`Internet is unsafe, and because in many transactions the buyer
`does not wish to provide details of himself, or of his bank
`account.
`Among the systems suggested to overcome this problem,
`there can be mentioned a few. For instance, a concept called
`“First Virtual” first asks a potential customer to fill out an
`application form providing standard personal information.
`First Virtual would then send a personal identification number
`(PIN) with an 800 number over the Internet to the customer’s
`email. Then the customer is supposed to use the 800 number
`to give the customer’s credit card information over the phone
`to First Virtual to establish or open no more than just an
`electronic charge account.
`Another concept called “Cybercash” requires customers or
`buyers on the Internet to first open a special Cybercash bank
`account that contains money designated for spending on the
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`50
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`2
`Internet. A consumer issues instructions to purchase goods or
`services on the Internet and money for these items are trans
`ferred from the consumer’s Cybercash bank account to that of
`the merchant’s. Transactions are anonymous unless the seller
`specifically asks for the identity of the buyer.
`Yet another concept called the “Netbill” requires a buyer on
`the Internet to first put money in a Netbill account and sub
`sequent transactions made by the buyer are to be drawn off
`from the account sum or balance. Accounts of both buyers and
`sellers are maintained on a Netbill server, to keep transactions
`off the Internet and to maintain lower transaction costs. After
`a purchase is made, the transfer of funds will automatically
`take place at the server. Digital goods, e.g. programs, docu
`ments etc. are transferred to the buyer in encrypted form.
`When the Netbill account has cleared the transaction, a
`receipt containing the key to the encrypted goods is sent to the
`merchant, then forwarded to the consumer. A two-step pro
`cess called “Millicent” had also been introduced, using fake
`money. A merchant creates its own electronic currency, or
`“scrip”, that is sold to brokers. Brokers then sell the scrip to
`buyers. Sellers deal with just a handful of accounts, spreading
`transaction costs over a large volume of purchases. Millicent
`customers need to buy currency from only a few trusted
`brokers.
`Another system is the so-called “Digicash” or “ecash”. In
`theory this system turns a user’s or buyer’s hard drive on a PC
`into a purse. To use this system, one first establishes an
`account with a bank. To obtain digicash or ecash, the user
`creates a series of numbers that will represent a mixture of
`coins or money bills in various denominations according to
`the user’s own wishes. This request for digicash is then sent to
`the bank, which deducts the total amount requested from the
`user’s existing valid account. The bank then sends the user an
`equivalent amount of ecash as an encrypted email message
`containing a series of numbers. Each number corresponds to
`a specified amount of money. Before the user can actually use
`these encrypted series of numbers from the bank to purchase
`goods or services on the Net, the user must first obtain a user
`name and a password from Digicash. Then the user has to
`download Digicash’s ecash software to the user’s PC. The
`final step is to create the user’s own encryption key (in
`essence another password) and together with the user’s pass
`word obtained earlier from Digicash, the user can then spend
`ecash on the Net. The operation of this system is illustrated in
`FIG. 1.
`Another prior art system is NetCash, which is described in
`“Gennady Medvinsky and B. Clifford Neuman, Electronic
`Currency for the Internet, Electronic Markets Vol 3. No. 9/10,
`October 1993, pages 23-24”, and in “Gennady Medvinsky
`and B. Clifford Neuman, NetCash: A design for practical
`electronic currency on the Internet, In Proceedings of the First
`ACM Conference on Computer and Communications Secu
`rity, November 1993. It is a framework for electronic cash
`developed at the Information Sciences Institute of the Uni
`versity of Southern California. It uses identified on-line elec
`tronic cash. Although the cash is identified there are mecha
`nisms whereby coins can be exchanged to allow some
`anonymity. The system is based on distributed currency serv
`ers where electronic checks can be exchanged for electronic
`cash. The NetCash system consists of buyers, merchants, and
`currency servers. An organization wishing to set up and man
`age a currency server obtains insurance for the new currency
`from a central certification authority. The currency server
`generates a public/private key pair. The public key is then
`certified by being signed by the central authority. This certifi
`cate contains a certificate ID, name of the currency server,
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`currency server’s public key, issue date and an expiry date, all
`signed by the central authority:
`The currency server mints electronic coins, which consist
`of:
`1. Currency Server Name: Identifies a currency server.
`2. Currency Server Network Address; Where the currency
`server can be found. If this address is no longer in use, a name
`server can be queried to find the current address.
`3. Expiry Date: Limits the state that must be maintained by
`each currency server.
`4. Serial Number: Uniquely identifies the coin.
`5. Coin Value: Amount coin is worth.
`The coin is signed with the currency server’s private key.
`The currency server keeps track of the serial numbers of all
`outstanding coins. In this way double spending can be pre
`vented by checking a coin’s serial number with the currency
`server at the time of purchase (or exchange). If the coin’s
`serial number is in the database it has not been spent already
`and is valid. When the coin is checked the serial number is
`then removed from the database. The coin is then replaced
`with a new coin (coin exchange). An electronic cheque can be
`exchanged with a currency server for electronic coins. The
`currency server is trusted not to record to whom the coins are
`issued. To further aid anonymity a holder of coins can go to
`any currency server and exchange valid coins for new ones.
`The currency server does not know who is exchanging coins,
`only the network address of where they are coming from. By
`performing the exchange and by choosing any currency
`server to do this with, it becomes difficult to track the path of
`the coins. If a currency server receives coins that were not
`minted by it, it will contact the minting currency server to
`validate those coins.
`FIG. 2 shows how a buyer uses NetCash coins to purchase
`an item from a merchant. In this transaction the buyer remains
`anonymous since the merchant will only know the network
`address of where the buyer is coming from. NetCash assumes
`that the buyer has or can obtain the public key of the merchant,
`and that the merchant has the public key of the currency
`Server.
`Another system that has been suggested is the PayMe
`40
`system (Michael Peirce and Donal O’Mahony, “Scaleable,
`Secure Cash Payment for WWW Resources with the PayMe
`Protocol Set”, presented at the Fourth International World
`Wide Web Conference, Dec. 11-14, 1995, Boston, Mass.,
`USA—http://www.w3. org/Conferences/WWW4/Papers/
`228/). PayMe is an on-line electronic cash system. The enti
`ties involved are banks and users. Users can be either buyers
`or merchants but each has the same functionality. They can
`make payments, accept payments, ordeal with the bank. Each
`bank mints its own identified electronic cash with serial num
`50
`bers. Double spending of coins is prevented by the bank
`maintaining a database of coins in circulation. Any user in the
`PayMe system can accept payments and make payments.
`Merchants can receive payments for selling Web goods but
`they can also make payments to the buyers. This can be used
`for making refunds or in pay-out services. A simple model
`showing the basic functionality of the PayMe system is shown
`in FIG. 3.
`Both symmetric and public-key cryptography are used.
`Each entity has its own pubic/private key pair. It is a stand
`alone system which has been tailored for use with the Web.
`The PayMe system uses its own secure communications pro
`tocol, the PayMe Transfer Protocol(PMTP), to communicate
`between entities.
`Coins are the pieces of data that represent monetary value
`within the system. The coins are digitally signed by the bank
`using public key cryptography to make them valid currency.
`
`4
`Each coin has a serial number which is entered into the bank’s
`database when the coin is minted. Coins have fields for the
`coin value, serial number, bankid, bank host name and port
`number, and expiry date. When these five fields are put
`together and signed with the bank’s private key, a valid coin is
`created.
`PayMe can be used with any Web client or server. To
`purchase an item a user starts up both their PayMe Wallet and
`any Web client. They browse the Web until they find a mer
`chant shop, which will be presented by a HTML document. A
`combination of PMTP messages are used in a purchase trans
`action, as shown in FIG. 4.
`All the aforementioned systems require a direct interaction
`between the seller and the buyer during the transfer of the
`payment and/or involve complicated and time-consuming
`key agreement processes.
`In a recently issued patent, U.S. Pat. No. 5,913,203, a
`system is suggested, which is stated to provide totally anony
`mous or effectively anonymous cash-like transactions, which
`are accomplished by using a pseudo cash data package con
`verter for inserting a user key into a pseudo cash preliminary
`data packet through the use of a user insertion key to generate
`a pseudo cash unit with a fixed monetary value that can be
`used to purchase goods or services via the Internet. A pseudo
`cash repository facilitates the cash-like transactions and
`maintains a record of the pseudo cash units and their fixed
`monetary value. Depending upon the level of anonymity
`selected by a purchaser, the pseudo cash repository can either
`transmit pseudo cash preliminary data packets orpseudo cash
`units to a first entity. If the first entity loses an effectively
`anonymous pseudo cash preliminary data packet, it can be
`replaced by the pseudo cash repository without risk of loss.
`This patent is said to solve one of the prior art problems
`existing, e.g., in the Digicash system, in which a user’s ecash
`is stored as a series of numbers on the hard disk of his PC. This
`leads to the danger that, if one has a disk crash, which is quite
`common nowadays in view of the complexities of modern day
`software, or if one’s computer is stolen, one has lost his
`money.
`Another severe drawback of certain systems is that they
`require that the cash dispenser be involved in the transaction,
`to identify the users (either the buyer, the seller, or both),
`rendering the transaction cumbersome, and detracting from
`its privacy.
`Because, of these facts, there is currently no electronic
`“currency” that can be used in a simple manner by the general
`public as well as by Internet surfers, just as one uses bills,
`coins or checks. For this reason, e-commerce is still relatively
`limited both in physical transactions, such as in shops and in
`service-providing establishments, and over the Internet. It is
`therefore clear that there is a great need for an electronic
`currency that overcomes the disadvantages of the prior art.
`All the prior art methods and systems suffer from severe
`drawbacks arising from a misconception that could be termed
`“excessive protectivity”. The prior art does not take into
`account that most transactions made over the Internet or other
`LANs or WANs involve small sums. while it is important to
`ascertain that theft of such sums is made difficult, just as one
`keeps his pocket money, the danger of theft does not justify
`the complexity of the systems devised by the prior art.
`Additionally, and largely because of said misconception,
`most of the prior art systems require the user to open an
`account with either a bank, or a pseudo-bank, or with a sup
`plier, and either to provide prepaid funds to these accounts,
`from which it possible to draw, or to perform relatively com
`plicated operations when the user wishes to spend, withdraw
`or generate funds.
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`5
`Another severe drawback of certain systems is that they
`require that the cash dispenser be involved in the transaction,
`to identify the users (either the buyer, the seller, or both),
`rendering the transaction cumbersome, and detracting from
`its privacy.
`Because, of these facts, there is currently no electronic
`“currency” that can be used in a simple manner by the general
`public in physical transactions or when surfing the Internet,
`just as one uses bills, coins or checks. For this reason, e-com
`merce is still relatively limited in physical shops and over the
`Internet.
`It is therefore clear that it would be highly desirable to
`provide an electronic currency system which is free from all
`the aforementioned drawbacks, and which permits e-com
`merce to proceed freely, in a manner as similar as possible to
`live commerce.
`It is therefore an object of this invention to provide elec
`tronic currency and a system for its implementation, that
`overcome all the aforementioned drawbacks of the prior art.
`It is another purpose of this invention to provide electronic
`currency that can be converted to and from regular currency,
`and which can be transferred in real time from one Internet
`user to another.
`It is a further purpose of the invention to provide an elec
`tronic currency and system which are user-independent, and
`which do not require a user key or identification, such cur
`rency being essentially “to the bearer”.
`It is yet another object of the invention to provide electronic
`currency in electronic form that can be lawfully copied onto
`magnetic, optical or other media, so as to ensure against loss
`or crashes of the media where the currency is saved.
`It is a further object of the invention to provide electronic
`money and systems employing it, which can be used for
`carrying out transactions over the Internet.
`It is still another object of the invention to provide a method
`and system which permit to carry out delayed-payment trans
`actions, much as when paying for goods or services with a
`post-dated check.
`It is a further object of the invention to provide a method
`and currency which can be used for the simultaneous service
`receipt/payment, and which can further be used for payments
`which are linked to the quantity of goods or services elec
`tronically furnished.
`Many preferred embodiments of the invention are useful in
`any system in which no concern for electronic theft exists,
`such as, e.g., private LANs or WANs, or public WANs, such
`as the Internet, in which otherindependent security means are
`provided, either by algorithmic or by electronic methods.
`However, if no independent security system exists, there
`remains a concern that currency theft may be effected at the
`user’s level, e.g., by hostile downloadables or virus-like pro
`grams that may infiltrate the user’s system. Such programs
`may, unknown to the user, copy the valid currency from the
`location where it is stored to another location, and then use it
`to carry out purchases. Such programs may even copy the
`entire data hard disk or other drive where the Internet money
`is stored.
`Although the use of small amounts of money for small
`purchases greatly diminishes this danger, theft of this type is
`still possible. Furthermore, it is also possible, when the prob
`lem of this kind of theft (as opposed to physical theft) is
`solved, to use the aforementioned method for transactions
`involving large sums.
`It is therefore another object of the present invention to
`provide a method and system for eliminating the problem of
`electronic theft of electronic currency, in systems employing
`an isolation server to effect currency transactions.
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`It is still another object of the invention to provide appara
`tus useful in exploiting the invention.
`Other purposes and advantages of this invention will
`appear as the description proceeds.
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`SUMMARY OF THE INVENTION
`
`The invention is directed to electronic currency, consisting
`of data in a form suitable to be stored in a user’s data storage
`medium, said data comprising information on the data value,
`identification of each specific set of data or data point, and
`authentication information suitable to verify that said data has
`been generated by a specific Currency Issuing Authority
`(CIA).
`According to a preferred embodiment of the invention the
`data consists of a plurality of data packets, each data packet
`comprising information on its value, a unique identificator,
`suitable to verify the identity of the data packet, and authen
`tication information, suitable to verify that the data packet has
`been generated by a specific Currency Issuing Authority
`(CIA).
`According to another preferred embodiment of the inven
`tion each data packet comprises a plurality of sub-data pack
`ets of value smaller than that of the data packet. Preferably,
`but non limitatively, the value of all sub-data packets is the
`SãIIlê.
`The electronic currency of the invention can be stored on
`any suitable storage medium, e.g., on a magnetic data carrier
`such as a diskette or a hard disk drive, or on an optical data
`carrier, such as a CD-ROM, or can be stored in machine
`readable printed form, such as a bar code.
`Broadly speaking, the invention can be used, in various
`embodiments thereof, interalia, in one of the following three
`systems:
`1) In private systems where anti-theft measures are taken care
`by the structure or independent security means of the sys
`tem;
`2) In any system where anti-theft measures are provided at the
`user’s level, e.g., at the CPU level; or
`3) In any system, regardless of its inherent level of security,
`using the additional data of the invention, that will be
`discussed in detail below.
`As said, the electronic currency of the invention can be
`used in any way, for electronic commerce, whether by means
`of an electronic wallet or purse carried by the owner, or in
`remote e-commerce carried out over communication lines,
`such as cellular telephone systems or any other line of com
`munication over which e-commerce can be effected, the most
`important example of which is the Internet e-commerce.
`Throughout this specification, when reference is made to
`the Internet as the e-commerce system, it is meant to indicate
`any other communication method or system over which
`e-commerce can be effected, and the description to follow
`applies mutatis mutandis to any such communication method
`and system. The Internet is used here for the sake of illustra
`tion, it being understood that the invention is not limited to it,
`or to any other particular system. Furthermore, when refer
`ence is made to a network, it may also refer to mixed net
`works, e.g., where two different networks cooperate in the
`communication system, such as may be a cooperation of the
`Internet with a cellular phone system, via an appropriate
`interface that will be easily appreciated by the skilled person.
`Thus, in another aspect, the invention is directed to an
`Internet currency system, comprising:
`at least one user connected to the Internet;
`at least one supplier connected to the Internet;
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`PayPal Ex.1002, p.15
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`a data packets database (DPD) associated with a Currency
`Issuing Authority (CIA) comprising information on
`each and every data packed issued by said CIA:
`one or more Currency Issuing Authority trusted servers
`(CIAS), said trusted servers collectively comprising:
`a) access to the DPD of the CIA:
`b) software to communicate with an active data packet
`area of a user, and to manipulate data packets located
`therein;
`c) software to generate data packets; and
`d) software to transmit data packets to a provider or to
`another user over the Internet or other communication
`channel.
`In still another aspect, the invention is directed to a method
`for effecting currency transactions between two users over a
`communication system, such as the Internet, comprising:
`a) providing a plurality of data packets representative of a
`sum, each of said plurality of data packets comprising
`information on its value, a unique identificator, suitable
`to verify the identity of the data packet, and authentica
`tion information, suitable to verify that the data packet
`has been generated by a specific Currency Issuing
`Authority (CIA);
`b) providing an active data packets area in a data storage
`medium associated with a first user, comprising one or
`more of said data packets;
`c) when a transaction is to be effected, allowing a CIA
`trusted server CIAS to gain access to said active data
`packets area, and to manipulate data therein;
`d) transmitting to the CIAS information representing the
`sum to be transferred from the first user to the second
`user:
`e) transmitting to the CIAS data packets cumulatively rep
`resentative of the sum to be transferred from said first to
`said second user;
`f) verifying in the CIAS the identity of the data packets as
`having been issued by the specific CIA involved;
`g) verifying in the CIAS that the data packets have not been
`previously used to effect a previous transaction;
`h) when verification required in steps f) and g) has been
`obtained, carrying out the steps of:
`(1) removing the data packets involved in the transaction
`from the active data packets area of the first user, by
`deleting them or marking them as spent; and
`(2) generating new data packets corresponding to the
`sum of the data packets removed in step (1), less any
`commission, if any, and transmitting them to the sec
`ond user.
`In the context of the invention different types of users exist.
`Typically, one user will be the buyer and another will be the
`provider of services or goods. The terms “user” and “pro
`vider” are used interchangeably, as required in any case to
`better illustrate the specific situation discussed. Thus, accord
`ing to a preferred embodiment of the invention in the method
`discussed above the second user is a services or goods pro
`vider.
`The authentication information included in the data packet
`is preferably, but non-limitatively, encrypted. The data stor
`age medium in which the active data packets are provided can
`be of any suitable type, e.g., it can be a hard disk drive, or an
`optical disk drive, or t