(19) United States
`(12) Patent Application Publication (10) Pub. No.: US 2002/0065786 A1
`Martens et al.
`(43) Pub. Date:
`May 30, 2002
`
`US 20020065786A1
`
`(54) METHOD AND APPARATUS FOR
`DEPOSITING PAPER CHECKS FROM HOME
`OR OFFICE
`
`(76) Inventors: Marco Martens, Chappaqua, NY (US);
`Charles P. Tr
`New York, NY
`arles P. resser, New York,
`(US)
`
`'GWG.E.
`C
`OO s ite 1800
`GSEE,d
`McLean, VA 22102-3915 (US)
`
`(21) Appl. No.:
`22) Filled:
`(22) File
`
`09/920,740
`Aug. 3, 2001
`l. 3,
`Related U.S. Application Data
`(63) Non-provisional of provisional application No.
`60/252,584, filed on Nov. 24, 2000.
`
`Publication Classification
`
`(51) Int. Cl. ............................. H04K 1700; G06F 17/60
`
`(52) U.S. Cl. ................................. 705/70; 705/45; 705/50
`
`(57)
`
`ABSTRACT
`
`A form of paper checks, and the apparatus and method to
`handle them, allows deposit from home or office. The
`apparatus can be implemented with a Personal Computer
`(PC) having a Secure cryptography generator (SCG)
`installed. The process of depositing paper checks begins by
`the payee endorsing a check having printed thereon encryp
`tions in at least Selected locations where information is
`written by a payer. The act of writing by the payee obscuring
`Some of the encryptions. The payee then Scans the endorsed
`check with a Scanner to generate a digitized version of the
`check. The computer extracts from the digitized version of
`the check a concatenated branch number, account number
`s
`and check number and a corresponding digital Signature.
`The payee then transmits the extracted information together
`with the digitized version of the check for deposit. The
`checks a specially designed to prevent fraud Such alteration
`of the payee, amount and multiple deposits. In addition to
`the encryptions imprinted on the check, a Secret key and a
`luralitv of digital Signatures are generated based on the
`p
`y
`9.
`9.
`9.
`concatenated branch number, account number and check
`number.
`
`
`
`IBM 4758 PCI Cryptographic Coprocessor
`
`SYMBOLIC REPRESENTATION OF THE
`IBM 4758 PC CRYPTOGRAPHC COPROCESS
`N FURTHER FIGURES.
`
`Mitek Exhibit 1027, Page 001
`
`

`

`Patent Application Publication May 30, 2002 Sheet 1 of 11
`
`US 2002/0065786 A1
`
`
`
`IBM 4758 PCI Cryptographic Coprocessor
`
`SYMBOLIC REPRESENTATION OF THE
`IBM 4758 PC CRYPTOGRAPHIC COPROCESS
`N FURTHER FIGURES.
`
`FIG.1
`
`Mitek Exhibit 1027, Page 002
`
`

`

`Patent Application Publication May 30, 2002 Sheet 2 of 11
`
`US 2002/0065786 A1
`
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`Mitek Exhibit 1027, Page 003
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`

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`Patent Application Publication May 30, 2002 Sheet 3 of 11
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`US 2002/0065786 A1
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`Mitek Exhibit 1027, Page 004
`
`

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`Patent Application Publication May 30, 2002 Sheet 4 of 11
`
`US 2002/0065786 A1
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`Mitek Exhibit 1027, Page 005
`
`

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`Patent Application Publication May 30, 2002 Sheet 5 of 11
`
`US 2002/0065786 A1
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`Mitek Exhibit 1027, Page 006
`
`

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`Patent Application Publication
`
`May 30, 2002. Sheet 6 of 11
`
`US 2002/0065786 A1
`
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`Mitek Exhibit 1027, Page 007
`
`

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`Patent Application Publication May 30, 2002 Sheet 7 of 11
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`Mitek Exhibit 1027, Page 008
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`

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`Patent Application Publication
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`May 30, 2002 Sheet 8 of 11
`
`US 2002/0065786A1
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`Mitek Exhibit 1027, Page 009
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`Patent Application Publication May 30, 2002 Sheet 9 of 11
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`US 2002/0065786 A1
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`Mitek Exhibit 1027, Page 010
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`

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`Patent Application Publication May 30, 2002 Sheet 10 of 11
`
`US 2002/0065786 A1
`
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`Mitek Exhibit 1027, Page 011
`
`

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`Patent Application Publication May 30, 2002 Sheet 11 of 11
`
`US 2002/0065786 A1
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`

`

`US 2002/0065786 A1
`
`May 30, 2002
`
`METHOD AND APPARATUS FOR DEPOSITING
`PAPER CHECKS FROM HOME OR OFFICE
`
`CROSS-REFERENCE TO RELATED
`APPLICATION
`0001) This application claims the benefit of U.S. Provi
`sional Application No. 60/252,584 filed Nov. 24, 2000.The
`Subject matter of this application is related to the disclosures
`in U.S. patent application Ser. No. 09/398,028 filed Sep.
`17, 1999,by G. Braudaway, P. D. Howard, P. V. Kamesam, H.
`E. Sachar, F. C. Mintzer, C. W. Wu, J. M. Socolofsky, S. W.
`Smith, and C. P. Tresser for “Method and System for Remote
`Printing of Duplication Resistant Documents” and U.S.
`patent application Ser. No. 09/398,029 filed Sep. 17, 1999,
`by C. Mengin, H. E. Sachar, M. Martens and C. P. Tresser
`for “Method and Apparatus for Secure Sale of Electronic
`Tickets”. patent applications Ser. No. 09/398,028 and
`09/398,029 are assigned to a common assignee herewith and
`their disclosures are incorporated herein by reference.
`
`DESCRIPTION
`
`BACKGROUND OF THE INVENTION
`0002) 1. Field of the Invention
`0003. The present invention generally relates to a method
`and apparatus for depositing paper checks from home or
`office and the checks used for Such deposit and, more
`particularly, to a method and apparatus which converts a
`Specially designed paper check to digital form and allows
`Secure electronic data transmission from a home or office
`computer to a bank for the purpose of depositing paper
`checks with the bank. A frequent fraud attempted against
`traditional check deposit is the So-called “amount fraud'
`where a dishonest perSon tries to change the amount of the
`check. The present invention also helps to protect against
`this fraud. More generally, the present invention makes
`fraud against checks harder, even when traditional methods
`of depositing are used.
`0004 2. Background Description
`0005 With the development of the World Wide Web
`(WWW) came the development of home banking. But there
`are still lots of basic banking operations which So far require
`one to go to a branch or to an Automated Teller Machine
`(ATM). The most important Such operation is depositing a
`check, and more precisely a paper check as they have existed
`since much before the electronic age. While most of the rest
`of the world moves away from checks (although at a rather
`Slow pace, about 4% per year in England, for instance), the
`use of checks is still growing in the U.S.A.
`0006 Allowing deposit from home or office would both
`be more practical for Some customers, which helps in
`particular the banks for their Customer Relationship Man
`agement, and leSS costly for the banks. In particular, a check
`from the payee's location (from home or from the office or,
`for that matter, any other location), assuming it would be
`reasonably automated, would represent a considerable value
`for a variety of Small, medium, and large businesses. In fact,
`even in countries where overall check traffic has been
`Significantly decreased, there are businesses which Still have
`to handle an increasing number of checks, which is very
`costly for them because of the work involved, and also to
`Some extent, because of the errors and frauds involved.
`
`0007 When we speak about deposit from home or office,
`we assume that from a paper check, indeed a little piece of
`the physical world-We also say an analog entity—we first
`create a digital entity (we also speak about the digital form
`of the check). A digital entity is basically a set of Symbols.
`Instead of an amorphous Set of Symbols, it might be more
`convenient to think of a Set of Symbols comprising groups of
`Symbols that carry tags. The tags refer to which part of real
`world the group of symbols refers to and/or describe the role
`of the group Symbol they are attached to, and/or describe the
`way this group relates to other groups of Symbols. Such tags
`can indeed be explicit, or be implicitly contained in the way
`the overall set of symbols is formatted.
`0008. The digital form of a check does not fully replace
`the check, as long as the check is not destroyed in the
`process. We will assume that destroying the paper checks
`would not be acceptable, and that paper forms of check may
`be used is Some lawsuit Settlements. Thus, recourse to the
`paper form will only play a role extremely rarely. Conse
`quently, for all practical purposes, we will in fact consider
`that the paper checks have been transformed to digital
`entities. Once in digital form, a check becomes quite close
`to an electronic check as the ones that have been considered
`by the Financial Services Technology Consortium (FSTC)
`(see http://www.fstc.org). Thus, most of the present disclo
`Sure will deal with two problems: generating checks from
`which Secure digital versions can be extracted and how this
`extraction can be done with Security and ease for all parties
`at hand (the payer, the payee, and their banks, and further
`parties as needed by the protocols) in the process of depos
`iting from home or office. Once in digital form, protocols
`previously developed for electronic checks, or other forms
`of electronic payment Systems, can be used in our context.
`On the other hand, what we will describe here to complete
`the deposit mechanism and its administration could be used
`for other Secure transformations of documents into corre
`sponding digital forms. Furthermore, the new kind of checks
`described in this invention will also make fraud much harder
`when traditional methods of depositing are used.
`0009. A few numbers will illustrate the size of check
`handling. In the U.S.A. in 1993, checks represented 80% of
`the noncash transaction volume for only 13% of the trans
`action value, with an average value per transaction of
`S1,150. While the use of checks has been declining in some
`countries, it is Still increasing in Some. The handling cost is
`huge for banks, and even more when bad checks are
`presented or frauds occur, Such as multiple deposit attempts.
`Beside reducing the processing cost, allowing checks to be
`transformed to digital entities before being deposited would
`also help the overall transition to more forms of electronic
`payment Systems.
`0010 For a general reference on electronic payment, see
`for instance Electronic Payment Systems by Donald
`O’Mahony, Michael Pierce, and Hitesh Tewari, Artech
`House, Boston (1997).
`
`Problems to Be Solved
`0011 AS we mentioned before, to deposit checks from
`home, we assume the checks will be converted from their
`analog form to Some digital form, in particular to allow data
`to flow using electronic means of communication. The
`problem is that the digital form allows easy data modifica
`
`Mitek Exhibit 1027, Page 013
`
`

`

`US 2002/0065786 A1
`
`May 30, 2002
`
`tion, a door open to easy counterfeiting. Furthermore, the
`very ease of data flow and copy in electronic form can also
`facilitate other forms of wrong doing.
`0012. The main problems to be solved can be formulated
`as follows:
`0013 1. No one should be able to create illegitimate
`checks. In particular, the reading of the paper check,
`involved in the transformation of the check into a
`digital form, should measure enough details of the
`check to assure that is it is very hard to make
`illegitimate checks that do pass the authenticity test
`based on the reading.
`0014 2. The amount should be very hard to change.
`0015 3. The payee’s name should be very hard to
`change.
`0016 4. Multiple deposit of any check should be
`very hard.
`0.017. As usual in the security business, very hard essen
`tially means So hard that the cost of defeating the System
`would most probably be much higher than the benefit. It is
`clear that check depositing from home is more open to fraud
`than traditional check deposit. By Solving the harder prob
`lem, the present invention also provides means to better
`protect against fraud in any form of check usage.
`
`SUMMARY OF THE INVENTION
`0.018. It is therefore an object of the present invention to
`provide a form of paper checks, and the apparatus and
`method to handle them, that allows deposit from home or
`office while solving all problems we have mentioned above.
`0.019 According to the invention, there is provided a
`method and apparatus, in combination with a special form of
`paper checks, which allows for the Secure deposit of paper
`checks from home or office; in other words, at a location
`other than the bank or an ATM. The apparatus can be
`implemented at the payee's home or office with a Personal
`Computer (PC) which has a scanner attached to it and
`connected to the World Wide Web (WWW) on the Internet.
`The process of depositing paper checks begins by the payee
`endorsing a check having printed thereon encryptions in at
`least Selected locations where information is written by a
`payer. The act of writing by the payee obscuring Some of the
`encryptions. The payee then Scans the endorsed check with
`a Scanner to generate a digitized version of the check. The
`computer extracts from the digitized version of the check a
`concatenated branch number, account number and check
`number and a corresponding digital Signature. The payee
`then transmits the extracted information together with the
`digitized version of the check for deposit. The checks are
`Specially designed to prevent fraud Such as alterations of the
`payee, amount and multiple deposits. In addition to the
`encryptions imprinted on the check, a Secret key and a
`plurality of digital Signatures are generated based on the
`concatenated branch number, account number and check
`number. Furthermore, the new kind of checks described in
`this invention will also make fraud much harder when
`traditional methods of depositing are used.
`
`BRIEF DESCRIPTION OF THE DRAWINGS
`0020. The foregoing and other objects, aspects and
`advantages will be better understood from the following
`
`detailed description of a preferred embodiment of the inven
`tion with reference to the drawings, in which:
`0021
`FIG. 1 is a pictorial representation of an actual
`IBM 4758 PCI Cryptographic Coprocessor;
`0022 FIG. 2 shows the front of a typical U.S.A. bank
`check and the various main area Visible there;
`0023 FIG. 3 shows the back of a typical U.S.A. bank
`check and the various main area Visible there;
`0024 FIG. 4 and FIG. 4A illustrate some of the visual
`Security mechanisms on the front of a U.S.A. check,
`0025 FIG. 5 is a flow diagram illustrating how the most
`protective features are calculated at the payer's bank or its
`trusted mint, according to the present invention;
`0026 FIG. 6 shows the new features that would appear
`on the front of checks according to the present invention;
`0027 FIG. 7 shows the new features that would appear
`on the back of checks according to the present invention;
`0028 FIG. 8 shows the front of a typical U.S. check as
`it would appear when modified according to the present
`invention;
`0029 FIG. 9 shows the back of a typical U.S. check as
`it would appear when modified according to the present
`invention;
`0030 FIG. 10 is a flow diagram illustrating the process
`of depositing a check from home with a database; and
`0031
`FIG. 11 is a flow diagram illustrating the process
`of depositing a check from home without a database.
`
`DETAILED DESCRIPTION OF PREFERRED
`EMBODIMENTS OF THE INVENTION
`0032. The present invention builds on a pair of technolo
`gies that we briefly discuss here. They are (1) a Secure
`cryptography generator, such as the IBM 4758 PCI Cryp
`tographic Coprocessor, and (2) the art of cryptography.
`0033) The IBM (International Business Machines Corp.)
`4758 PCI (Peripheral Component Interconnect) Crypto
`graphic Coprocessor (4758 for short) is a programmable,
`field upgradeable piece of Secure hardware that has a general
`purpose computational power about equivalent to a personal
`computer (PC) from the early 90's. It is designed to plug into
`an available PCI connector of the PCI bus of a PC to provide
`the PC with a Secure means of transmitting data over a
`standard telephone line. As shown in FIG. 1, the 4758
`comprises a Sealed processor 11 mounted to a printed circuit
`board (PCB) 12 having a PCI connector 13 along one edge.
`Abattery 14, also mounted on the PCB 12, provides standby
`power to the processor 11 when the computer in which it is
`installed is turned off. The purpose of the battery is to
`maintain data in non-volatile memory within the processor
`11. The PCB 12 is attached to a standard PC adapter
`mounting bracket 15 which fits into a slot at one end and is
`attached by a Screw at the other end in the backplane of the
`PC cabinet. An RS-232 DB-9 Serial connector 16 is mounted
`to the bracket 15 to permit connection from the 4758 to a
`modem. When configured in a PC, the 4758 occupies one of
`the serial port addresses, typically COM-1.
`
`Mitek Exhibit 1027, Page 014
`
`

`

`US 2002/0065786 A1
`
`May 30, 2002
`
`0034. The 4758 performs high speed cryptographic
`operations, and provides Secure key Storage. It is both
`cryptographically Secure and able to detect and protect itself
`against physical attacks (probe, Voltage, temperature, radia
`tion). It is in fact one of the only two devices that are Federal
`Information Processing Standard (FIPS) 140-1 overall 4
`certified (hardware and microcode: certificate #35), the other
`one coming integrated in IBM 390 mainframes (the IBM
`CMOS (Complementary Metal Oxide Semiconductor)
`Cryptographic Coprocessor: certificate #40-which is not
`programmable as is the 4758 while the price of a 4758 is
`about a couple of thousand dollars. The 4758 is indeed a
`popular PCI buS interface for Servers, and can Serve as
`device driver for Operating Systems (OS) such as Microsoft
`Windows NT, Linux, and IBM's AIX, OS/2, and OS/390
`Operating Systems. Typical use of cryptographic coproces
`SorS Such as the 4758, or Some Smart cards, include High
`Speed, Bulk Cryptography (for instance for digital movies,
`in-flight entertainment Systems, Secure databases, confiden
`tial video-conferences, telemedicine, telecommuting, etc.)
`and Security in Non Trusted Environments (for instance for
`Smart card personalization, electronic currency dispensers,
`electronic benefits transfer, Server-based Smart card Substi
`tutes, home banking, certification authorities, Secure data
`base key control, electronic postage (epostage) meters, elec
`tronic payments, Secret algorithms, Secure time Stamps,
`contest winner Selection, Software usage metering, elec
`tronic Securities trading, hotel room gaming, etc.).
`0035) We have described in great detail the virtues of the
`4758 because these virtues are the elements which are
`needed for the present invention to be implemented with the
`required level of high Security. Any device with Similar
`virtues could be used as well. The fact is that it is by no
`means obvious a priori that a machine with all these virtues
`could be built. We wanted to establish the feasibility-at the
`time of writing-of our overall invention by recalling in
`detail that assembling all the needed Virtues in a machine can
`indeed be done, and giving an example proving that.
`0036). In the sequel, we will use SCG as an acronym for
`Secure cryptography generator, an example of which is the
`4758. What we mean is a machine which is secure for both
`physical and cryptographic attackS.
`0037. The use of secret keys as a means to encrypt or
`digitally sign a file or document, of Secret encoding keys,
`and of Secure hash functions (such as SHA-1, as fully
`specified in the Federal Information Processing Standard
`Publication 180-1) are now well known. A description of
`these techniques with directions on how to use Several of
`their implementations can be found in Handbook of Applied
`Cryptography, by Alfred J. Menezes, Paul C. van Oorschot
`and Scott A. Vanstone, CRC Press, 1997.
`0.038. To fix the ideas, we recall that a digital signature
`Scheme is used in the form of a pair of functions Sign and
`Sign' which are inverse of each other, i.e., for a plain text
`X to be signed, Sign' (Sign(X))=X. The functions Sign and
`Sign' are kept Secret, being known only to Some legitimate
`owner of the Signature and his or her agents.
`0.039
`For definiteness, each time we use an encryption
`scheme, one can choose the Rivest-Shamir-Adleman (RSA)
`protocol as a method to generate a digital Signature, Several
`other methods could also be used (see, e.g., the Handbook of
`Applied Cryptography, cited above). In the case when the
`
`functions Sign and Sign' are produced according to the
`RSA protocol, it is now preferred to use at least 1024 digits
`for X and Sign(X) (the formerly often used 512 digits are no
`more considered as Secure). As a message may contain much
`more information than the length of the keys, Several meth
`ods can be used, possibly concurrently, as is well known in
`the art. For instance, one can Split the message in Several
`pieces, Some or all of which will be signed, or one can
`compress the information, for instance using a Secure hash
`function, or one can Select a Subset of the information, etc.
`It might be beneficial to use Several Signatures Schemes, Say
`Sign, Sign-2, . . .
`0040 Also notice that even if one wishes to use the
`benefits of cryptography, it may be useful to also hide Secret
`information in the messages, So that one could recognize that
`Someone has Succeeded to break the keys being used. This
`can be done in the form of Secret functions, Sec, Seca, . .
`. AS usual in the art, it is advisable to change the keys being
`used every So often, depending on the application, and to
`keep a list of former keys.
`0041 Another important enabler of secure electronic
`communication is the possibility to exchange Secret keys
`while eXchanging only messages which can be understood
`by third parties. Several protocols have been created to this
`effect such as the Diffie-Hellman protocol. Such protocols
`allow in particular several SCGs to have the same keys
`without the keys being compromised. The machines this
`way can also share one time pads, and other cryptographic
`function. In the Sequel, when we speak of a SCG, we speak
`either of a single machine, or a series of them working in a
`coordinated way, as a multi-component Single machine; i.e.,
`memory will have to be shared. The invention does not
`depend on the distinction between these two cases, as long
`as the multiple machines are managed properly, avoiding in
`particular independent signatures by the components.
`0042. For ease of adoption by a majority of banks in some
`countries, it is important that the checks resemble the checks
`in use presently, So that the check could easily be processed
`in the usual way. Nowadays, checks usually carry Several
`forms of counterfeiting protections to prevent in particular
`easy copy (which would allow multiple deposit) and alter
`ation of the amount, and possibly also of the payee. For
`instance, in the U.S.A., checks often have explicit warnings
`about the Security features that protect them, and a request
`to check theses features by whomever processes them. These
`will be described in more detail with reference to FIGS. 2
`and 3. Some other features would need to be added to allow
`acceptable Security levels in transfer to digital form.
`0043 Beside the current check data, usually of the form
`0044) “X=Bank Id number; Account Id number;
`Check number' shown at 21 on the front of the check
`in FIG. 2, the checks will carry a digital signature
`using a Signature or Sign, which can either be the
`property of the issuing bank, or common property to
`a set of banks. The checks will possibly also carry a
`Secret code encryption, using a key Seco, which is
`the property of a more restrictive community; i.e.,
`Sec, is a more secret key. All these data will be
`clearly readable with a currently cheaply available
`Scanner, and preferably also human readable. There
`may be machine readable entries and other entries
`that are human readable, or one can make the entry
`
`Mitek Exhibit 1027, Page 015
`
`

`

`US 2002/0065786 A1
`
`May 30, 2002
`
`readable both ways; this applies to Signo(X) and also
`possibly to Seco(X). AS mentioned before, one can
`use a plurality of Signatures and Secret functions.
`0.045. Other digital signatures and secret keys will be
`used to create numbers which will be finely printed in
`appropriately chosen areas, also called fields or critical
`fields. These include where the amounts (numbers and/or
`text) are written at 26 and 27, where the payee's name is
`written at 25, preferably also where the human Signatures
`(payer's signature and endorsement) are written 28, prefer
`ably also where the check is endorsed at 33 in FIG. 3, and
`preferably also where the date is written at 24 in FIG. 2.
`0046 All writing on the checks by the payer (in particular
`amounts, Signature, payee's name, and also preferably the
`date) will be made with dark, preferably wide, pens, So that
`if the amounts are changed on the digital copy, Some Secret
`bits of information cannot be recovered by the counterfeiter.
`0047 Using these three principles, any changed amount
`or changed payee's name can be recognized as invalid. For
`that, the Small prints in the payee and amounts areas will
`need to change from check to check.
`0.048
`Illegitimate signature protection is mostly about
`protecting against copying a signature from one check to
`another check (for instance after stealing or finding a blank
`check). An often used protection against copying human
`Signatures is to recognize that a signature is perfectly
`identical between several (two or more) checks. Especially
`in digital form, it is easy to change Slightly the shape and
`position on the check of a signature in order to defeat this
`protection, but then the fine print to be covered would be
`different. Thus, for better protection, the fine print in the
`Signature area will preferably change from check to check.
`For better protection, one might also consider the fine print
`covering the Sensitive areas to comprise Signatures of the
`form Sing(X) and the more secret Sec(X).
`0049 Similar protection for the date area is expected to
`play a leSS critical role, but could help defeating for instance
`using old checks which have expired.
`0050. The data of the check (X, payee's name, amount,
`date) will be registered on Some accessible write only
`database together with the name of the bank where the
`deposit will be made, before the deposit or as part of the
`deposit.
`0051) To avoid malignant use of the database by people
`Willing to block checks non-legitimately, it would be better
`to also register one or more of the digital Signatures on the
`checks at the same time as the check numbers.
`0.052 Since the full set of presently available data on
`checks indicate the emitting bank branch, the database can
`be partitioned, either logically or geographically, or both,
`according to these branches (with further partition corre
`sponding to the account number). This would allow easy and
`quick access to the database even when the database
`increases with usage.
`0.053 Such database could be administrated in several
`forms by Specialized institutions Such as clearing houses or
`by all or Some bankS.
`0054) One also needs to protect against fraud which
`consists of depositing a check both electronically and tra
`
`ditionally (at a bank or ATM). Thus, for the process of home
`depositing to marry well with regular paper check deposits
`at the branches or ATMS, numbers on regularly deposited
`checks would also be checked against the database, but then
`the digital signature(s) of the check data would not need to
`be registered, if the bank where the deposit is made registers
`itself to Verify the check data have been legitimately regis
`tered. In fact, such database would offer first level protection
`against multiple deposit in either the digital, mixed analog
`digital, or pure analog World.
`0055 Although the database approach we just described
`Seems the most appropriate way to go, we also describe a
`way to avoid the database protection using Secure hardware.
`Anyone or any company or company branch (anything that
`can be the payee of a check) will be allowed to get a single
`4758 (or similar SCG machine) with the special function of
`Signing the fact that check numbers are used only once.
`Replacement of the machine will be allowed only if proof
`can be made that the previous one will not be used anymore
`(e.g., exchange of the new machine when giving back the
`old one).
`0056. It will be important that payee's name be not left
`blank in the case Secure hardware is used as the protection
`against multiple deposit, while this is leSS relevant with the
`database protection approach.
`0057 So far, we have supposed that the circulation of
`data once the check is transformed to digital form follow the
`Same path as a paper check, in particular going from the
`payee to his or her bank. The FSTC has realized that once
`in electronic form, checks do not need to be handled the
`Same way as regular checks in terms of the data circulation.
`They distinguish between several forms of circulation (see
`for instance the previously mentioned book Electronic Pay
`ment Systems by D. O’Mahony et al.). For instance:
`0058. Deposit-and-clear mirrors the flow for real
`check, and is what we had in mind So far, in
`particular for the problem of multiple deposit pre
`vention.
`0059 Cash-and-transfer uses a direct link between
`the payee and the payer's bank, So that the multiple
`deposit is much easier to protect against, Since the
`emitter's bank can easily take care of its own data
`base.
`0060. There are further scenarios in the world of elec
`tronic checks. Some of them make these forms of payment
`further and further away from regular checks. Anyone
`versed in the art of payment Systems would easily adapt the
`principle of the present invention to any Such System, as
`what this invention provides is a way to create and use paper
`documents which allows for Secure and uniquely usable
`transfer to digital form.
`0061
`Referring again to FIGS. 2 and 3, a typical Ameri
`can check is represented, respectively, on the front and back
`SideS. There are Several distinctive fields on the check, also
`called critical fields. We call X the long number usually on
`the bottom left of the face of the check at 21, made by
`concatenating the branch number, the account number, and
`the check number for that account:
`0062) “X=Bank Id number; Account Id number;
`Check number'.
`
`Mitek Exhibit 1027, Page 016
`
`

`

`US 2002/0065786 A1
`
`May 30, 2002
`
`0.063. The check number itself is repeated, usually on the
`upper right comer of the face at 22. The name and address
`of the account owner (an individual or a company) is usually
`on the upper left of the face at 23, Sometimes also with a
`telephone number, and/or Some other Sorts of numbers in the
`case of a corporation. Different fields to be written on will
`carry the date at 24, the payee's name (individual or busi
`ness) at 25, the numerical amount at 26, and the written
`amount at 27. A field is designed to carry the Signature at 28.
`The name of the bank appears at 29. The logo of the bank
`appears at 30. A place to write what the check is for appears
`at 31. Sometime a notice is given that the check is equipped
`with counterfeiting adverse features appears at 32, Sending
`for the back of the check for more details.
`0064.
`In FIG. 3, on the back of the check, an area is
`reserved for endorsement at 33. And some description of the
`counterfeiting adverse features may be given at 34, as
`indicated at 32 (FIG. 2), with advices to people to reject the
`check if Some of these features are compromised.
`0065 FIG. 4, and the enlarged area shown in FIG. 4A,
`represents. Some of the Visual protections often used on a
`check. This is in the form of a screen (manifested by small
`color dots on the background of the check) and micro prints
`on some important lines, as shown in FIG. 4A. Checks will
`be