US005420405A
`~
`_
`5,420,405
`[11] Patent Number:
`Umted States Patent ms]
`
`Chasek
`[45] Date of Patent: May 30, 1995
`
`3/1990 Halpem ............................. .. 235/379
`4.906.828
`
`4,968,873 11/1990 Dethloff et al.
`235/379
`5,175,416 12/1992 Mansvelt et al.
`................... 235/380
`Primary Examiner—John Shepperd
`
`ABSTRACT
`[571
`This invention describes a combination of methods and‘
`apparatus that creates electromc money for personal
`transactions which integrates the functions of cash,
`°h°_°k3 “"5 °1'°d_*it °31'd5 with °°“-“am S“"‘{°fla“°°
`agamst fraud Tlns money can also serve as an Interna-
`tional medium-of-exchange, and support automated
`sales tax collections and payment. This money’s support
`system is comprised of personal terminals, vendor ter-
`minals, an electronic banking sub—system, and homebase
`terminals. Such a system, if widely used, would increase
`Commercial and Personal Productivity, provide better
`security against fraud and counterfeiting, facilitate the
`automation of operations that involve currency, and
`imjnis
`dth
`h thte fliod of paper that threatens to
`“" 3°
`°P‘es°‘‘ 53'‘ °“"
`
`8 Claims, 7 Drawing Sheets
`
`[76]
`
`[56]
`
`[54] SECURE, AUTOMATED TRANSACTION
`SYSTEM THAT SUPPORTS AN
`ELECIRQNIC CURRENCY 0pERAvI-ING IN
`MIXED DEBIT & CREDIT MODES
`Inventor: Norman E. Chasek, 24 Briar Brae
`Rd., Stamford, Conn. 06903
`[21] APPL No‘: 23,120
`_
`F915 25: 1993
`[22] Flledi
`[51]
`Int. Cl.5 .............................................. G06F 15/30
`[52] US. Cl. .................................... 235/379, 235/380;
`9o2/4
`[58] Field of Search ..................... 235/379, 380; 402/4
`.
`References Clted
`U-3 PATENT DOCUMENTS
`4,277,837 7/1981 Stuckert .............................. 235/330
`4,303,904 12/1981 Chasek
`235/334
`
`gclzfion
`235/380
`a on et
`235/380
`,
`,
`.
`4,630,201 12/1986 White ..........
`....... 902/4
`4,689,478
`s/1937 Hale etal.
`235/sso
`4,766,293
`8/1988 Boston
`235/379
`4,359,337
`8/1989 I-Ialpem ............................... 235/380
`
`
`
`
`[04
`
`MULTIPLE ACCESS
`SATELLITE TRANSPONDER
`
`
`
`I08
`
`’
`
`n 08
`
`HOMEBASE
`
`:06
`
`\‘ § T
`~
`
`~ ~ -
`
`BILL
`PA EES
`Y
`
`/wvvvvt RADIO WAVES
`
`——— --—TELEPI-IONE
`
`PAYERS
`
`PayPal Ex.1013, p.1
`PayPal Ex.1013, p.1
`
`

`
`U.S. Patent
`
`May 30, 1995
`
`Sheet 1 of 7
`
`5,420,405
`
`[04
`
`MULTIPLE ACCESS
`! SATELLITE TRANSPONDER
`
`
`
`/wvwvs RADIO wnvss
`
`———— —-TELEPHONE
`
`|'-'|G_ |a
`
`II4
`
`SATELLITE FIG. lb.
`
`___________ —-
`
`HBT
`
`I5 !*0ME 81855
`
`PayPal Ex.1013, p.2
`PayPal Ex.1013, p.2
`
`

`
`U.S. Patent
`
`May 30,1995
`
`Sheet 2 of 7
`
`5,420,405
`
`
`
`FlG.2b
`
`PayPal Ex.1013, p.3
`PayPal Ex.1013, p.3
`
`
`
`SEQUENCECONTROLLER
`
`222
`
`-BEEJEE
`
`22|
`
`

`
`U.S. Patent
`
`May 30, 1995
`
`Sheet 3 of 7
`
`5,420,405
`
`255
`
`a 245
`
`ADJUST
`cnemr
`mm
`
`EEPROM 247
`
`cneon
`
`AW,_A3,_E
`
`
`
`caeour
`
`cnaon‘
`AVAILABLE
`
`
`TRANSACT
`
`' CREDIT
`TRANSACTION
`
`cm-:orrms
`
`AMOUNT.
`
`'
`
`253°
`
`ADD
`
`PT/PT
`
`
`
`
`E DEBIT I
`REGISTER
`I
`
`-
`255
`
`
`
`IT
`0
`AVAILABLE
`
`EB
`
`osanT+_I
`TRANSACTION
`
`_'
`
`“E3”
`TRANSAWON
`
`PayPal Ex.1013, p.4
`PayPal Ex.1013, p.4
`
`

`
`U.S. Patent
`
`May 30, 1995
`
`Sheet 4 of 7
`
`5,420,405
`
`PAC I PIN
`
`265
`
`
`
`“-260
`
`MEMORY
`I DEBIT)
`
`
`
`DEBIT I
`CREDIT
`
`MEMORY
`(CREDIT)
`
`CRYPTO ROM
`
`
`
`264
`
`LCD
`REGISTER
`
` READOUT
`1--..--/_..__
`
`
`
`‘FIG. 29
`
`TO PACS
`.0
`FIG. 6
`VIA SATELLITE
`
`
`
`
`
`“I”-7""-5
`::.::":;.. ms
`
`U
`mren FACE
`
`so
`
`TELEPHONE
`
`‘
`
`
`
`PayPal Ex.1013, p.5
`PayPal Ex.1013, p.5
`
`

`
`U.S. Patent
`
`May 30, 1995
`
`Sheet 5 of 7
`
`5,420,405
`
`MEMORY TELEPHONE
`
`
`
`SEQUENCECONTROLLER
`
`RUNNING
`MEMORY
`
`BUFFER
`
`CUSTOMER
`ACTIVATE D
`
`
`
` SEQUENCE
`CONTROLLER
`
`CRYPTO ROM
`
`32|
`
`PayPal Ex.1013, p.6
`PayPal Ex.1013, p.6
`
`

`
`U.S. Patent
`
`May 30, 1995
`
`Sheet 6 of 7
`
`5,420,405
`
`.2.»0zmpziaO...
`
`mum¢:mm_o
`
`En
`
`
`
`zofiomm._<2_:.,.n.=o<>
`
`
`
`zocbmm.._<2_2¢upmoozu>
`
`on.o_...
`
`¢ut.E:8
`
`
`
`#2:00010<>O...
`
`
`
`¢mo<mm.2...O»as
`
`PayPal Ex.1013, p.7
`PayPal Ex.1013, p.7
`
`
`
`

`
`U.S. Patent
`
`May 30, 1995
`
`Sheet 7 of 7
`
`5,420,405
`
`
`
`FIG. 5
`
`50211
`
`T0 VAC OR PAC
`VIA SATELLITE
`
`
`
`SOIQ
`
`
`TELEPHONE LINE
`ENCR YPTI ON
`
`GENERATOR
`
`
`
`
`
`
`PAC
`INTERFACE
`
`MULTIPLE
`ACCESS VAC
`INTERFACE
`
`
`
`PayPal Ex.1013, p.8
`PayPal Ex.1013, p.8
`
`

`
`1
`
`5,420,405
`
`SECURE, AUTOMATED TRANSACTION SYSTEM
`THAT SUPPORTS AN ELECTRONIC CURRENCY
`OPERATING IN MIXED DEBIT & CREDIT
`MODES
`
`BACKGROUND FOR INVENTION
`
`Currency is money in circulation and is used in the
`hand-to-hand settlement of simple transactions without
`independent reference to the standing of the payer. A
`currency transaction consists of debiting the payer’s
`on-person cash supply while adding the same amount to
`the payee’s cash supply. Currency, checks, and credit
`cards are transactional vehicles. Implicit to the success
`of all transactional vehicles is trust, which requires
`strong defenses against fraud, and counterfeiting.
`Any true money system must be capable of serving as
`a national, or international, medium of exchange; it must
`readily circulate; it must have easily recognized values;
`it must be transferable in a variety of transactions; its
`value must be difficult to dilute by counterfeiting; and it
`must have a guarantor.
`It is contended that an advanced money would lend
`itself to automated transactions, handle mixed debit &
`credit transactions, and keep track of personal accounts
`in an on-person terminal. Physically,
`the on-person
`terminal should easily fit into a pocket and not require
`manual dexterity or above average intelligence in its
`use.
`
`This invention incorporates aspects of a universal toll
`paying system described in U.S. Pat. No. 4,303,904, in
`that the toll paying uses point-of-sale debiting via-.radio
`signals, and also credits are inserted within the in-vehi-
`cle terminal electronically. The use of a radio medium
`at the point-of-sale speeds transaction times, making it
`especially efficient for automated, dynamic, mass appli-
`cations.
`
`SUMMARY OF INVENTION
`
`This electronic money system uses as its medium-oil
`exchange packets of bytes that identify the personal
`account custodian or PAC, payer, amount of transac-
`tion, type of transaction, vendor, and provides a secu-
`rity number, and a national code. This group of bytes is
`referred to as a transaction packet. The packet is cre-
`ated at the point-of-sale and incorporates all the infor-
`mation needed to completely consumate, or settle, each
`transaction. When the transaction is settled, the packet
`loses its link between the payer and transaction.
`This electronic money system has three principal
`activity areas; point-of-transaction, homebase, and the
`electronic banking system. The complete system is com-
`prised of six subsystems; 1) personal terminals, PT, 2)
`vendor terminals, VT, 3) homebase terminals, HBT, 4)
`personal account custodian, PAC, terminals, 5) vendor
`account custodian, VAC, terminals, and 6) an electronic
`clearinghouse. The point-of-sale is where a personal and
`a vendor terminal, or two personal terminals, initiate
`the first step of the transaction. Homebase might be a
`private residence or workplace. The electronic banking
`system is comprised of PACs, VACs and clearing-
`houses.
`The personal terminal should be about the size of a
`thick credit card. Its preferred embodiment incorpo-
`rates a microwave receiver/transmitter, or R/T, With
`antenna, various memory elements, addition and sub-
`
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`2
`traction registers, a crypto gate, a visual display, a re-
`chargable battery and a transaction number assigner.
`The vendor terminal includes an R/T, a transaction
`amount inserting key or number pad, a calendar-time
`clock, memory, and visual display.
`The personal account custodian or PAC terminal
`includes a crypto entry code decypherer, PT interro-
`gater, account computer, account reconciliation scan-
`ner, transaction sequence correlator, and interfaces to
`HBT telephone and the clearinghouse.
`The vendor account custodian, or VAC, terminal
`includes interfaces for telephone and clearinghouse,
`vendor dialer, and account computer. The homebase
`terminal
`includes a telephone number ROM, and
`PI‘/modem interface. The clearinghouse transfers
`transaction packets between the various VACs and
`PACs.
`System security is realized by lost & stolen electronic
`files, cross checks of running account balances, a crypto
`process for inserting PT credits, and correlations be-
`tween transaction sequenced numbers and calendar-
`clock numbers.
`Debit transactions are registered in a running account
`held within the PT. Credit transactions, up to desig-
`nated limits, are conducted at the option of the payer,
`by switching from subtraction to addition in a running
`account.
`
`The availability of zero current drain memory ele-
`ments known as flash memories or electronically eras-
`able programable read only memories, EEPROMS,
`make it possible to retain information for long periods
`without draining the P'I"s battery. The transaction
`processers draw current only when a transaction is in
`process.
`The homebase terminal, HBT, employs a modem
`which adapts any telephone into a remote terminal for
`recharging debit and credit accounts, and for paying
`bills or settling person-to-person transactions.
`The system is easily converted from a national to an
`international money system through a national code
`that is stored in the PT indicating its native money
`denomination. Vendor terminals using currency transla-
`tors convert each P'I"s denomination into the local
`currency and consuxnate the transaction back through
`designated VACs and PACs.
`The system can also be adapted to execute automated
`sales tax collections and payments by inserting appro-
`priate multiplying and accumulating registers into the
`vendor’s terminals and adding memories and a printer
`into VAC terminals.
`The various aspects and advantages of this invention
`will be more fully understood from a consideration of
`the following detailed description in conjunction with
`the accompanying drawings, in which:
`FIG. 1a illustrates pictorially how the system is con-
`figured.
`FIG. 1b illustrates pictorially how two PACs linkup
`to support person-to-person transactions.
`FIG. 2a describes a personal terminal (PT) configura-
`tion in block diagram.
`FIG. 2b shows external details of the PT.
`FIG. 2:: describes a preferred half duplexed R/T.
`FIG. 2d shows specifics of the credit/debit block.
`FIG. 2e shows specifics of the person-to-person trans-
`action processer.
`FIG. 3a illustrates a manual vendor terminal in block
`diagram.
`
`PayPal Ex.1013, p.9
`PayPal Ex.1013, p.9
`
`

`
`5,420,405
`
`3
`FIG. 3b illustrates an automated vendor terminal in
`block diagram form.
`FIG. 3c shows the adaptations needed to incorporate
`automatic sales tax collection into the system.
`FIG. 4a shows how the HBT connects with the
`homebase telephone.
`FIG. 4b describes some details of a preferred HBT
`modem.
`FIG. 5 illustrates the PAC subsystem in block dia-
`gram form.
`FIG. 6 describes the VAC subsystem in block dia-
`gram form.
`DETAILED DESCRIPTION OF INVENTION
`
`Referring to the drawings, FIGS. la and lb, show the
`overall electronic money system’s operation in pictorial
`illustrations. The transaction packet, which is also the
`medium-of-exchange of this system, is created when an
`individual carrying personal terminal, PT,101, on their
`person wishes to conduct a transaction by bringing the
`PT in proximity with vendor terminal, VT, 102. The
`amount of the transaction is keyed in by the VT. The
`amount of the transaction is then debited from the PT’s
`debit or credit account. Information that characterizes
`the transaction is accumulated in the VT where these
`characterizations are periodically transferred from the
`vendor terminal to a vendor’s account custodian, 103,
`or VAC. The VAC credits the vendor’s account in the
`amount of each transaction, and sorts the transactions
`into like-PAC batches, forwarding them via satellite
`transponder 104, which performs as a multiple access
`relay point, communicating with specified PACs in
`assigned time slots. Personal Account Custodian, or
`PAC 105, is the place where the PT’s account is stored
`and from which the vendor’s account is credited. The
`satellite serves, for this illustration, as a clearinghouse.
`(A true clearinghouse can be realized by use of relay
`ground stations which perform intermediary VAC/-
`PAC sorting.) As a final step in the settlement process,
`ch PAC periodically makes lump sum cash settle-
`ments with each VAC to balance all accounts.
`The PT’s debit and credit account is periodically
`credited, through homebase terminal, 106. Bill paying
`transactions occur when a telephone connection be-
`tween payee and payer is made and amount of the bill is
`presented and acknowledged. The PT’s account is deb-
`ited by bill payee, 108, who acts as vendor. The payee
`transfers all accumulated collections to its VAC. The
`VAC credits payee’s account and debits designated
`PAC accounts.
`An individual, wishing to transfer funds from a cash
`account to his PT, preferably dials his PAC, transmits
`telephone number and hangs up, then places PT onto
`HBT interface surface, 106. PAC confirms number and
`returns call. PAC accesses PT’s debit account credit
`entry port through a crypto gate and proceeds to credit
`that account with funds debited from a savings account,
`for example. Acknowledgements are made monthly.
`Another type of transaction, referred to as PT/PT,
`would transfer funds between two individuals. FIG. lb
`illustrates how this could take place. Payer 110 presses
`a button in his PT which steps the number shown on the
`PT’s display to the payment that is to be transferred to
`recipient 111. The transaction is actuated by debiting
`the payer’s PT account by the displayed amount and
`simultaneously transferring that amount into PI‘/PT
`memories located in the PT, one for crediting the other
`for debiting. The information stored includes PAC and
`
`4
`PIN data lifted from the payer’s PT. When the payee’s
`PT is next in contact with its PAC, the stored PT/PT
`credit information is readout
`to payee’s PAC, 113,
`where the payee’s PT & PAC accounts are credited.
`The payer’s PAC debits payer's PAC account with the
`amount obtained via satellite, for example, from the
`payee’s debit memory.
`FIG. 2a shows a functional block diagram of the
`preferred embodiment of a personal terminal, PT. It
`shows antenna 200 which receives and transmits micro-
`wave signals to and from receiver/transmitter, or R/T,
`201 which operates in a half duplex mode. When R/T
`201 is in its receive mode, amplifier 202 draws no cur-
`rent and latch switch, 203 is open, applying no voltage
`to microprocesser 204 from battery 205. The various
`functions of microprocesser 204 are indicated by blocks
`207 through 213. Block 206 is a transaction sequence
`controller that triggers the various steps that comprise
`the transaction. Block 207 is a read-only-memory, or
`ROM, that contains permanent personal information,
`such as social security number, date of birth, and sex. It
`is from‘ this information that a crypto entry code is
`derived to gain entry to the crediting port of account
`registers. Block 208 is an erasible-programable-ROM or
`EPROM which includes semi permanent information
`such as the personal account custodian’s identification
`number, a nationality code, etc. Block 209 is a tempo-
`rary memory that stores time and/or point of entry
`information to facilitate automated toll, mass transit,
`and parking transactions. Block 210 is where the debit/-
`credit transaction occurs. This block is described in
`detail by FIG. 2d. Block 211 is the liquid crystal display
`unit or LCD. It provides running account information,
`transaction type being conducted, and guidance. Block
`212 is a recycling transaction sequence number as-
`signor. It assigns a sequentially advancing number to
`each transaction. Block 213 is the person-to-person
`transaction processer described in more detail by FIG.
`2e. Block 214 is programable logic that is changed by
`manually activating push button switches 223,224, and
`225.
`FIG. 2b shows a preferred physical embodiment of
`the PT. The PT is enclosed in plastic case 20. Embed-
`ded in the plastic is spiral antenna 221 and liquid crystal
`display, LCD, 222 which displays running accounts and
`other transaction related information. Beneath this is
`optional LCD strip providing advisory operating infor-
`mation. Side buttons 223 and 224 might be used to read
`in the transaction amount and determine whether the
`transaction is to be credit or debit. Button 224 might be
`choked n times to select the numeral for each decimal
`position. One click on button 225 could allow comple-
`tion of the transaction. Two clicks on button 225 could
`display debit running account, and three clicks display
`credit nmning account. The first click on button 223
`could turn-on PT. An end-of-transaction signal from
`the VT would turn-off the PT. Simultaneous pressure
`on buttons 223 and 225 could make the PT totally unre-
`sponsive. Simultaneous pressure on buttons 224 and 225
`could activate PT for an automated interrogation. Four
`clicks on button 225 could configure the PT for a
`PT/PT transaction. This switching scenario can be
`simplified by relying more on the VT and verbal com-
`mands to set up many transactions.
`FIG. 2c describes circuit details of a preferred half
`duplexed microwave receiver/transmitter that is com-
`prised of gallium arsenide, field effect transistor, or
`FET, 230, transistors 231 and 232, and diodes 234 and
`
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`PayPal Ex.1013, p.10
`PayPal Ex.1013, p.10
`
`

`
`5
`235. Transistor 231 and diode 234 bias FET 230 so when
`no input voltage is applied to transistor 231 the FET
`operates as a detector. When input voltage is applied,
`the positive feedback in the FET’s circuit causes it to
`break into oscillation. Some of that oscillation feeds into 5
`antenna 236. Diode 235 biases transistor 232 so it draws
`zero current when there is no current drawn by the
`FET. The presence of microwave signal from antenna
`236 causes dc current to flow in FET 230. This is ampli-
`fied by transistor 232 and further amplified by amplifier
`237, which draws zero current when quiescent.
`FIG. 2d describes the operation of debit/credit proc-
`esser 211. It is described as being implemented by hard-
`wire-logic circuitry which can serve as the basis for
`developing a software algorithm to program a micro-
`processer. The heart of this processer is debit register
`240, credit register 245 and crypto entry gates, 246, 251
`and 252. The two registers retain the running balance of
`the debit and credit accounts.- These registers use zero
`current drain or flash memory elements. The crypto
`gates restrict access for crediting these accounts. Ac-
`cess needs an entry code derived from the information
`stored in ROM 207. When the correct entry code is
`received, crypto gates 251 and 252 are opened. Credit/-
`debit switch 253 is positioned depending on a personal
`decision as to whether the credit or debit register is to
`be credited.
`
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`The creditline limit is stored in electronically erasible
`PROM or EEPROM 247. This amount can be adjusted
`by access to crypto gate 246. The credit available is the
`difference between credit limit in 247 and the amount
`stored in 245. One adjustment procedure would have
`the creditline limit being fed to subtraction register 248
`along with the output of credit register 245, whose
`readout is fed to the CREDIT AVAILABLE line and
`to the LCD. CREDIT TRANSACT line feeds add
`register 250 along with the input from the current ac-
`count stored in credit register 245. The contents of
`credit register 245 is then erased and the new amount
`stored in add register 250 is fed into register 245. Add 40
`register 250 is then cleared. This upgrades the credit
`balance by the amount of the transaction. Crediting of
`the credit account occurs by feeding the amount to be
`credited through crypto gate 251 into subtract register
`253 which initiates a similar transfer procedure as was
`described.
`
`45
`
`Crediting debit register 240 could use a similar pro-
`cess involving crypto gate 252 and add-register 254.
`DEBIT TRANSACT line feeds subtract-register 255
`which is also inputed by the output from debit register
`240. The difference is stored until register 240 is cleared.
`The new amount stored in register 255 is read into regis-
`ter 240.
`
`The input to register 255 can also be changed by
`switch 257 to conduct a PT-to-P'I‘ transaction. Switch
`257 is part of ganged switch 260 described in FIG. 2e.
`LCD 211 gets information from register 255 and from
`the debit or credit transactions stored in registers 250
`and 255.
`FIG. 2e illustrates how a person-to-person or Pl"/PT
`transaction could be conducted and how block 213
`could be configured to support that transaction. When
`button 225 is clicked four times by both payer and
`payee, three-pole-single throw switch, 260, is moved
`from its normal position 2 into position 1. The payer’s
`register 26], which is connected to LCD 21], has the
`amount of the transaction fed into it by pressing buttons
`223 and 224 appropriately. The two PTs involved in the
`
`55
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`5,420,405
`
`6
`transaction are held in close proximity. The payer clicks
`button 225 a fifth time which fires initiator 262. This
`directs the amount stored in register 261 to be debited
`from the payer’s rtmning account and be fed into the
`payer's zero current drain debit memory, 263a, also
`payer's PIN and PAC-IDN is transmitted to the payee’s
`zero current drain credit memory, 263b.
`The PT/PT transaction’s final step occurs when pay-
`ee’s PT is next in contact with its PAC. Then the crypto
`credit entry code is determined and the amount stored
`in the payee’s credit memory is credited to payee’s PT
`running account and also to its PAC account. The pay-
`er’s PIN and PAC—IDN form part of a PT/PT ad-
`dressed packet directed to the payer’s PAC, sent via a
`PI‘/PT clearinghouse, where that transaction amount is
`debited from payer's PAC account.
`FIG. 3a illustrates the functions of a typical manned
`vendor terminal, or MVT. It includes antenna 300, R/T
`301, and sequence controller 302. The transaction pro-
`cess begins by selecting from verbal
`instructions
`whether the transaction is to be a credit or debit and the
`amount of the transaction by number pad 303. The
`proposed transaction would optionally appear on LCD
`304 and 3040 for viewing by both vendor and customer.
`Switch 303a
`the transaction sequence by first
`activating the transmitter which, in turn, closes latch
`switch 203 and initiates a PT running account check.
`(This also triggers a check through lost or stolen file
`311.) If the running account check is positive and the
`customer approves the transaction by clicking button
`225,
`the transaction is consumated by inserting the
`transaction amount into the appropriate PT register
`where the new running balance is computed, followed
`by the transfer of the transaction amount, transaction
`type, sequential number, customer’s PIN, PAC-ID into
`transaction packet organizing memory 306, where it is
`combined with time-of-transaction information readout
`from calendar-clock 307 and vendor’s IDN readout
`from VID-ROM 308a. The transaction amount from
`number pad 303 and
`running balance from PT are
`fed into confirm block 305 where the PT’s expected
`new nmning balance is computed and compared with
`the P'I"s actual new running balance as read out of the
`PT into block 305. If the two new balances are the
`same, aturn-off opens latch switch 203 and transfers the
`information stored in memory element 306 into buffer
`memory 308. The information stored in buffer memory
`308 is periodically transferred to the vendor’s account
`custodian, VAC.
`The entire transaction can be timed by narrow pulse
`clock 312, which inserts its pulse train into sequence
`controller 302. These pulses, used for timing VT/PT
`transactional bytes, are sent via the transmitter portion
`of R/T 301. The narrow pulses do not interfere with the
`data pulses yet are easily handled by the microwave
`radio link between PT and VT.
`In order to handle personal international transactions,
`currency translator 310 is inserted between number pad
`303 and sequence controller 302. The nationality code
`received from the PT identifies the country of origin of
`the PT. A key selects the correct currency multiplier
`stored in translator 310 which converts the vendor’s
`price into the PT’s national currency so the transaction
`within the PT will occur in terms of its currency. The
`currency translator also generates two transaction
`packets one in terms of local currency, the second in
`terms of the PT’s currency. The PT‘s PAC receives the
`transaction, via the VAC and an intemationa] clearing-
`
`PayPal Ex.1013, p.11
`PayPal Ex.1013, p.11
`
`

`
`5,420,405
`
`7
`house, in terms of the PT’s currency. The VAC credits
`the vendor’s account in the local currency. Periodic
`lump sum settlements, via normal international funds
`transfer machinery, settle imbalances that develop be-
`tween VACs of one nationality and PACs of another.
`FIG. 3b describes a vendor terminal that would be
`used for small, automated transactions such as in vend-
`ing machines, parking meters, toll plazas, mass transit
`etc. Each generic application would use a modified
`version of this basic terminal, referred to here as AVT.
`An automated vendor terminal would include an
`R/T & sequence controller assemblage, 321, which is
`similar to that used in the PT. The functions associated
`with this sequencer include customer presence actuat-
`ed-switch 322 which starts the transaction by turning on
`the AVT’s transmitter, then turning on the PT and
`receiving its running debit account balance, PIN, and
`PAC information, determining that the PT’s balance is
`adequate, feeding in the base price stored in EEPROM
`324a which might be modified by price processer 324
`prior to being fed through confirm processer 325,
`where the transaction is confirmed. The transaction
`packet is assembled and stored in memory, 323. Vendor
`unit IDN is fed into each packet from VID-ROM 328.
`Any price qualification information, such as vehicle
`axle count, would come from an external sensor and be
`fed into price adjustment processer 324.
`The information in memory 323 is periodically read-
`out by a portable interrogator, in the case of parking
`meters, buses, or by telephone request for others. The
`interrogation is preceeded by a crypto word which
`must match up with the code stored in crypto-ROM
`326. When matchup occurs, entry gate 327 opens and
`reads out the contents of memory 323 into the inter-
`rogater’s buffer memory. The interrogater’s accumu-
`lated information is eventually fowarded to its VAC.
`FIG. 3c illustrates how the VT and VAC can be
`adapted to include automated sales tax collection as part
`of the sales transaction. A preferred adaptation begins at
`transaction data‘ entry unit 305. This feeds the purchase
`price into multiplier registers 332, 333, and 334 where it
`is multiplied by city, state, and federal tax multipliers.
`These multipliers are stored in crypto-EPROM 331.
`The tax multipliers are initially entered into this
`EPROM unit by a tax agent via a crypto controlled
`entry process. If there is no tax, the multiplier is zero. If
`the multiple should change, the EPROM can be reset
`with knowledge of the entry code.
`The tax products computed are then summed to-
`gether in add register 335. The sum total is added to the
`purchase price in add register 336. This amount, which
`is the net transaction amount, is then fed into memory
`unit 340. Each calculated tax amount is fed into respec-
`tive running accumulator/buffer memory pairs 337,
`338, or 339 where running sums are stored until re-
`quested. Sequencer 330 controls the computational se-
`quence for each transaction. Calendar clock 307 feeds
`its time-of-transaction bytes into the transaction packet
`being assembled in memory unit 340. Data entry unit
`305 feeds PAC and PIN information into memory unit
`340 to complete the assembly of the transaction packet.
`The packets are readout and cleared by the VAC. A
`vendor identification number, retained in ROM 308a, is
`also inserted into the data stream.
`Paired buffer memories 337 to 340 have one of their
`memory units readout and cleared by a tax entity’s
`VAC telephone request. The second memory unit con-
`tinues to accumulate tax data as a running sum of the tax
`
`5
`
`l0
`
`l5
`
`20
`
`25
`
`30
`
`35
`
`40
`
`45
`
`55
`
`65
`
`8
`amounts being collected. That running sum is readout,
`perhaps semiannually, by a tax agent, to serve as a cross
`check on the vendor’s payment transfers. The commu-
`nication between VAC and vendor memories would
`typically occur via switched phone line using modems
`341 and 601, with dialer 600 initiating the interrogation.
`Sequencer 345 initiates the readout from VT memo-
`ries 337 to 339 into VAC memories 346 to 349. The
`contents of memories 347 to 349 are fed to a printer
`where permanent information for tax collectors is accu-
`mulated.
`Memory 346 feeds its data into the VAC account
`computer.
`FIG. 4a illustrates a homebase terminal, or HBT 401,
`which is connected to telephone 400. Its operation be-
`gins with an individual slipping PT 401 onto the HBT’s
`transaction surface at a homebase location, dialing its
`PAC, sending the homebase telephone number and
`PIN, and then hanging up. The PAC terminal checks
`the phone number as correct for that PT and then redi-
`als it. An operator learns from the customer how much
`funds to transfer into the debit and/or credit accounts
`from the individual’s personal account and then enters
`those amounts. While this is occuring, the PIN is fed
`into the encryption generator and the entry crypto code
`word is read back to the PT. The amount to be credited
`to each account is read in and confirmed. The individu-
`al’s personal account, stored in the PAC’s computer, is
`also debited by those same amounts. If the individual
`wishes to receive a loan for either account, this would
`also be appropriately registered. Finally the contents of
`both the person-to-person transaction memories are
`readout and cleared.
`'
`FIG. 4b illustrates circuit details for a preferred HBT
`modem. The data rates at which the PT normally oper-
`ates in its transaction mode are much higher than that
`which can be supported by a phone line circuit. A pre-
`ferred modulation method for the modern would be a
`double sideband suppressed carrier, amplitude modula-
`tion which is also frequency shift keyed by the presence
`of Is or Os. The sharp cusp created at the nulls of this
`modulation fires a one-shot multivibrator that generates
`a narrow pulse which clocks the operation of the PT so
`it matches that of the HBT telephone line data stream.
`To implement this modem, bridged Tee oscillators
`410 and 411, set at two separate audio freqencies, are
`keyed depending on whether a 0 or 1 is present. Bridged
`Tee amplifiers 412 and 413 amplify one or the other
`received frequency with each output being detected by
`oppositely poled diodes 414 and 415. Diodes 416 detect
`the presence of any signal causing LED 417 to flash as
`a visual busy signal. When there is no transaction, there
`are no signals present on the line so LED 417 turns off,
`and the line is cleared for normal telephone operation.
`The data output from the receiver port of R/T 409
`actuates bridged Tee oscillators 410 and 411, and is fed
`into phase lock unit 418 to generate a sinewave whose
`zero crossovers track the input data train. The sinewave
`is fed to balanced modulator 419. The resulting modu-
`lated signal is then fed onto the telephone line via hy-
`brid 420. The output from bridged Tee amplifiers 412
`and 413 feed the transmitter port of R/T unit 409,
`which interacts with the PT lying on the transaction
`surface of HBT 400. The signals received from the PT
`are processed thru TTL/bipolar converter unit 421,
`whose bipolar output turns on either oscillator 410 or
`411. The zero crossover cusp, detected by diodes 422
`and 422a, is used to trigger one shot multivibrator 423,
`
`PayPal Ex.1013, p.12
`PayPal Ex.1013, p.12
`
`

`
`5,420,405
`
`9
`which generates a very narrow pulse that is superim-
`posed onto the output of amplifier’s 412 and 413.
`FIG. 5 describes the operation of a personal account
`custodian’s, or PAC, facility. A principal function of the
`PAC is to represent the individual customer much as a
`bank would. It also includes encryption generator 500
`which receives PIN information from PTs wishing to
`credit their running accounts, and through a crypto
`process derives the unique entry code that has been
`burned permanently into the PT’s crypto ROM when
`issued. When the entry code, deciphered from the PIN,
`matches that of the crypto gate, the crediting process
`proceeds. The crediting process can be conducted at
`PAC interface 501 on the PAC’s premises or through a
`telephone connection with homebase terminal 502, with
`the redialing procedure carried out by unit 502a. VAC
`data is received via interface unit 503.
`PT/PT transaction data is similarly taken from a PT
`via F1"/PT interface unit 504a or 50-Ib. The PI"s
`PT/PT memory units are readout into 504a or 504b,
`one unit sto