(19) United States
`(12) Patent Application Publication (10) Pub. No.: US 2004/0044627 A1
`(43) Pub. Date:
`Mar. 4, 2004
`Russell et al.
`
`US 2004004.4627A1
`
`(54) METHODS, SYSTEMS AND APPARATUSES
`FOR SECURE TRANSACTIONS
`
`(76) Inventors: David C. Russell, Portsmouth, VA
`(US); Bart A. Singer, Williamsburg,
`VA (US)
`
`Correspondence Address:
`Kimberly A Chasteen
`Williams Mullen
`Suite 210
`One Old Oyster Point Road
`Newport News, VA 23602 (US)
`
`(21) Appl. No.:
`(22) PCT Filed:
`(86) PCT No.:
`
`10/148,512
`
`Nov. 29, 2000
`
`PCT/US00/42323
`
`1210
`
`
`
`Publication Classification
`
`(51) Int. Cl." .............................. H04K 1700; H04L 9/00;
`G06F 17/60
`(52) U.S. Cl. ................................................................ 705/50
`(57)
`ABSTRACT
`The invention is directed towards methods, Systems and
`apparatuses, see FIG. 1, (100) for providing Secure and
`private interactions. The invention provides capability for
`Verifying the identity of a party initiating an electronic
`interaction with another party through data input module
`(140) which is verified by the ientity verification module
`(150), which further includes a self-destruct mechanism
`(153). Embodiments of the invention include secure meth
`ods for conducting transactions and for limiting the transfer
`and distribution of personal data to only those data that are
`absolutely necessary for the comletion of the transactions.
`The invention facilitates the transfer of additional personal
`data contingent upon an agreement that appropriately com
`pensates the provider of the personal data.
`
`1220
`
`
`
`Selecting items for purchase
`
`Adding selected items to an electronic shopping cart
`
`
`
`Determining payment amount
`
`1230
`
`
`
`
`
`1240
`
`Authenticating the customer identity to a PD
`
`1250
`
`1260
`
`
`
`Sending customer account data to a receiver
`
`Receiving acknowledgment that the transaction was approved
`
`Petitioner's Exhibit 1006, Page 1
`
`

`

`Patent Application Publication
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`Mar. 4, 2004 Sheet 1 of 11
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`US 2004/0044627 A1
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`
`
`Figure 1
`
`Petitioner's Exhibit 1006, Page 2
`
`

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`Patent Application Publication
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`Mar. 4, 2004 Sheet 2 of 11
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`US 2004/0044627 A1
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`220
`
`100
`Figure 2A
`
`100
`
`230
`
`Figure 2B
`
`Petitioner's Exhibit 1006, Page 3
`
`

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`Patent Application Publication
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`Mar. 4, 2004 Sheet 3 of 11
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`US 2004/0044627 A1
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`
`
`Figure 3
`
`Petitioner's Exhibit 1006, Page 4
`
`

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`Patent Application Publication
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`Mar. 4, 2004 Sheet 4 of 11
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`US 2004/0044627 A1
`
`Figure 4
`
`
`
`400
`
`Figure 5
`
`Petitioner's Exhibit 1006, Page 5
`
`

`

`Patent Application Publication
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`Mar. 4, 2004 Sheet 5 of 11
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`US 2004/0044627 A1
`
`100
`
`510
`
`400
`
`500
`
`Figure 6
`
`
`
`Figure 7
`
`Petitioner's Exhibit 1006, Page 6
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`

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`Patent Application Publication
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`Mar. 4, 2004 Sheet 6 of 11
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`US 2004/0044627 A1
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`
`
`Figure 8
`
`Petitioner's Exhibit 1006, Page 7
`
`

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`Patent Application Publication
`
`Mar. 4, 2004 Sheet 7 of 11
`
`US 2004/0044627 A1
`
`
`
`
`
`
`
`
`
`
`
`712
`
`714.
`
`716
`
`720
`
`
`
`710
`
`
`
`Specify Customer Benefit
`Function
`
`Specify Discounter
`Benefit Function
`
`
`
`
`
`Specify Customer Non-
`negotiable Constraints
`
`Specify Discounter Non-
`negotiable Constraints
`
`Specify Customer Benefit
`Function Normalization
`Value
`
`MY
`
`wou
`
`Specify Discounter
`Benefit Function
`Normalization Value
`
`722
`
`724
`
`726
`
`Maximize
`CB (CBF/CBFNV) + DB (DBF/DBFNV)
`Subject to non-negotiable contraints
`CB: customer biasing factor
`DB: discounter biasing factor
`CBF: customer benefit function
`DBF: discounter benefit function
`CBFNV: customer benefit function normalization value
`DBFNV: discounter benefit function normalization value
`
`730
`
`
`
`
`
`
`
`740
`
`750
`
`Receive values for prescribed
`Personal Data Fields
`
`Certify that the value of a
`Personal Data Field
`corresponds to the customer
`
`
`
`Reduce price by prescribed
`discount
`
`Figure 9
`
`Petitioner's Exhibit 1006, Page 8
`
`

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`Patent Application Publication
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`Mar. 4, 2004 Sheet 8 of 11
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`US 2004/0044627 A1
`
`
`
`
`
`
`
`
`
`Receiving payer payment information
`
`Confirming that the PID control designation
`corresponds to a PID that has been registered
`in the name of the payer and is priveleged to
`access the payer account
`
`Sending the payee
`payment packet to
`the payee financial
`inter mediary
`
`Receiving a payee payment packet
`
`Debiting the payer account
`
`Figure 11
`
`810
`
`820
`
`830
`
`840
`
`850
`
`910
`
`920
`
`Petitioner's Exhibit 1006, Page 9
`
`

`

`Patent Application Publication
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`Mar. 4, 2004 Sheet 9 of 11
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`US 2004/0044627 A1
`
`1010
`
`Selecting items for purchase
`
`t
`
`Adding selected items to an electronic shopping cart
`Determining payment amount
`
`1020
`
`1030
`
`1040
`
`Authenticating the customer identity to a PD
`
`1050
`
`Transferring data from PID to information processor
`
`1060
`
`1080
`
`Transferring data from vendor to information processor
`
`as as a
`
`ea ea as as as a men a a Forming a vendor payment packet
`
`1070
`
`
`
`
`
`
`
`
`
`Sending the vendor
`payment packet to the
`vendor financial
`intermediary
`
`s m r
`
`-> w- or a a mean is an as a sma u as as
`
`as men or a s an as an as a
`
`1090
`
`Sending the vendor payment packet to
`the customer financial intermediary
`
`1 100
`
`Debiting the customer account
`
`1110
`
`Crediting the vendor account
`
`Figure 12
`
`Petitioner's Exhibit 1006, Page 10
`
`

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`Patent Application Publication
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`Mar. 4, 2004 Sheet 10 of 11
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`US 2004/0044627 A1
`
`1210
`
`1220
`
`Selecting items for purchase
`
`
`
`Adding selected items to an electronic shopping cart
`
`1230 ===
`
`Determining payment amount
`
`1240
`
`Authenticating the customer identity to a PD
`
`
`
`
`
`1250
`
`260
`
`Sending customer account data to a receiver
`
`Receiving acknowledgment that the transaction was approved
`
`Figure 13
`
`Petitioner's Exhibit 1006, Page 11
`
`

`

`Patent Application Publication
`
`Mar. 4, 2004 Sheet 11 of 11
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`US 2004/0044627 A1
`
`1310
`
`1320
`
`
`
`Selecting items for purchase
`
`Adding selected items to an electronic shopping cart
`Determining payment amount
`
`
`
`1330 =
`
`1340
`
`Authenticating the user identity to a PD
`
`
`
`1345
`
`
`
`-n - a 4m am a sin a smaa as a -sa a a
`
`a
`
`certifying payment
`capability
`
`
`
`1350
`
`Traveling through the simulated inventory
`
`Figure 14
`
`Petitioner's Exhibit 1006, Page 12
`
`

`

`US 2004/004.4627 A1
`
`Mar. 4, 2004
`
`METHODS, SYSTEMS AND APPARATUSES FOR
`SECURE TRANSACTIONS
`
`CROSS-REFERENCE TO RELATED
`APPLICATIONS
`0001) This application claims priority under USC 119(e)
`of provisional patent application Serial No. 60/168,082 filed
`Nov. 30, 1999 entitled “ Apparatus for Controlling Con
`Verged Media Systems Including Payment Applications,
`Using a Privacy and Security-Oriented, Customer-Centered
`Authentication Architecture for Users of Pointing Identify
`ing Devices and Biometrics Pointing Identifying Devices.”
`which is hereby incorporated by reference in its entirety.
`0002 The following Disclosure Document Numbers and
`corresponding filing dates in the United States Patent and
`Trademark Office are hereby expressly referenced: U.S. Pat.
`No. 452001 filed on Mar. 16, 1999; 459354 filed on Jul 22,
`1999; 459500 filed on Jul 22, 1999; 459501 filed on Jul 22,
`1999; 459502 filed on Jul 22, 1999; 459503 filed on Jul 22,
`1999; 459504 filed on Jul 22, 1999; 459505 filed on Jul 22,
`1999; 459506 filed on Jul 22, 1999; 459355 filed on Jul 26,
`1999; 459356 filed on Jul 26, 1999; 462252 filed on Sep. 27,
`1999; 462253 filed on Sep. 27, 1999; 462254 filed on Sep.
`27, 1999; 462255 filed on Sep. 27, 1999.
`
`FIELD OF THE INVENTION
`0003. The present invention relates to methods, systems,
`and corresponding apparatuses for providing Secure inter
`actions.
`
`BACKGROUND OF THE INVENTION
`0004 Most existing payment-processing and transac
`tions-processing Systems have been designed by Vendors,
`primarily to serve the vendors. Historically, the ability of a
`customer to use a payment option other than cash had been
`Viewed as a Sufficient concession to the customer. Non-cash
`payment Systems put the Vendor at risk of not receiving
`payment, hence vendors and their associated financial insti
`tutions felt justified in Specifying Stringent criteria for cus
`tomers to use non-cash payment Systems. For face-to-face
`transactions at the point of Sale, a vendor would typically
`require a picture identification and/or a driver's license,
`together with a signature to accept a check drawn on a local
`financial institution. For credit card purchases, a Signature
`and Sometimes a picture identification would be required. In
`both these cases, the vendor, and his/her employees also
`have access to customer account information associated with
`the check or credit card.
`0005 Although most traditional vendors use the data
`provided to them by their customers only to Secure the
`payment due to them from the transaction, the data collected
`has additional valuable potential, even if clearly fraudulent
`activities-Such as using the customer's credit-card data to
`make unauthorized purchases-are not considered. For
`instance, a vendor could track the frequency, amount, loca
`tion, type, and other data about purchases for each particular
`customer. This data could be used to develop targeted
`advertising Strategies designed to get the customer into the
`Store immediately and/or after a prolonged absence. In
`addition, mailing lists of customers could be developed that
`could be sold to financial institutions or other vendors who
`want to promote their credit cards. Until recently, the cost
`
`and tedium involved in compiling and processing Such data
`discouraged aggressive use of personal data. However, due
`to recent technological advances, this has completely
`changed. Over the past Several years, the plummeting cost of
`computing hardware, and the increasing Sophistication of
`data warehousing and data mining Software, in combination
`with exponential growth in digitally-processed and internet
`processed customer purchase transactions, has put the Secu
`rity and privacy of the customer at extreme risk, despite
`contrary assertions of many vendors.
`0006 With the advent and growth of electronic com
`merce, the accelerating ease of compiling and processing
`Such data has encouraged and emboldened vendors to collect
`and exploit ever-greater amounts of personal data from their
`customers. The widespread use of Secure Sockets Layer
`(SSL) has dramatically improved the security of the personal
`and financial data as it is Sent from the customer to the
`vendor. Hence, until recently, many customers have been
`Willing to provide the requested data with little thought as to
`exactly what the vendor will do with the data. Many
`customers have little notion as to the value of that data. This
`is especially true for commercial transactions that exploit the
`Internet. In Such transactions data collection can be auto
`mated and the information gathered can be used in real time
`for targeted advertising. Despite Strict privacy policies to the
`contrary, vendor-collected customer data can (and often is)
`Still Sold to mailing lists, where these data and information
`can be used by companies with whom the customer has no
`desire to do business. Once customer data is public, the
`customer often has little or no recourse for retaining the
`privacy of that information.
`0007) According to The Forrester Report (April, 1999
`published by Forrester Research Inc.) 48% of both U.S. and
`European Internet retail companies interviewed indicated
`that they save customer name, address, and account infor
`mation for use in an express checkout System. Although Such
`Systems help to Speed customers through checkout, many of
`the retail companies admitted, “their transactions Systems
`have limited Scalability, poor fraud detection, high ongoing
`costs, and lack of real-time authorization.”
`0008 Although retail companies that maintain these cus
`tomer databases argue that Speedier checkout and even
`targeted advertising are in the customers interests, the
`customer is often not clearly informed of what information
`is being collected and Stored and for what purposes. Remov
`ing oneself from a customer database, even when possible,
`can be a time-consuming process.
`0009 Perhaps one of the greatest concerns over the
`warehousing of customer data and information is the highly
`lucrative target that Such a concentration of personal and
`financial information presents to hackers and other thieves.
`According to the Washington Post (“Cloaking Devices
`Designed for Wary Web Shoppers,”The Washington Post,
`Oct. 19, 2000, page E01), hackers stole 15,600 credit-card
`numbers from a Western Union web site during the month of
`September 2000. Credit card fraud represents a huge loss to
`both the credit-card industry and individual consumers. An
`estimated 0.06% of point-of-sale credit-card purchases and
`as much as 1% of online credit-card purchases are fraudulent
`(“VISA Shores up Web Position, Ends Fees on Theft of
`Credit Cards, American Banker, February, 2000; “Equity
`Research Report on First Data Corp., Morgan Keegan,
`
`Petitioner's Exhibit 1006, Page 13
`
`

`

`US 2004/004.4627 A1
`
`Mar. 4, 2004
`
`January, 2000.). Other estimates by vendor Symposia (e.g.,
`the “Card Tech/Secure Tech” trade show on Dec. 1, 1999)
`estimate much higher figures, generally estimating that
`“Card Not Present” transactions experience 6 (six) times
`greater incidence of fraud than actual physical “Card
`Present transactions. Although most individual consumers
`face limited financial liabilities if unauthorized use of their
`credit-card information is promptly reported, dealing with
`instances of fraud can be frustrating and time-consuming.
`Notwithstanding, in the final analysis, all consumers even
`tually pay for credit-card fraud in the form of higher vendor
`prices and leSS attractive credit-card terms than might oth
`erwise be available.
`0.010 Numerous alternatives now exist for performing
`financial transactions over computer networks.
`0011 Shawn Abbott (“The Debate for Secure E-Com
`merce.'Performance Computing February 1999) discusses
`both SSL and Secure Electronic Transactions (SET) proto
`cols for electronic commerce. As stated in the article, “SSL
`is widely used because it is built into all major Web browsers
`and Servers and is easy to apply.” However, beyond verify
`ing that the vendor is a bona fide company and that the
`customer's computer is dealing with the Vendor's Server,
`SSL protocol does little more than facilitate encrypted and
`reliable interaction between computers. On the other hand,
`SET is a messaging protocol Specifically designed by finan
`cial institutions to facilitate bankcard transactions over open
`networkS Such as the Internet.
`0.012 To use SET, the customer has a digital certificate
`that is Stored and encrypted using a pass phrase Selected by
`the customer. A SET electronic wallet can be established by
`combining: (1) a digital certificate with (2) financial account
`information, (3) a private encryption key and (4) Some
`additional Software. To make a purchase, the vendor's Server
`Sends a request to open the customer's SET wallet on the
`customer's computer. The customer is prompted for the pass
`phrase to authorize use of the SET wallet. After confirmation
`of the customer's pass phrase, payment instructions, includ
`ing the customer's account data are bundled into an
`encrypted and protected message. The message is bundled in
`Such a way that the Vendor cannot Secretly acceSS or tamper
`with it. The message, together with an authorization request
`by the vendor is forwarded to a payment gateway, which
`typically is a Server at the vendor's financial institution. The
`messages are then decrypted off the open network and the
`processing between financial institutions occurs as in Stan
`dard credit or debit card transactions. In the SET protocol all
`participants hold digital certificates rooted in a common SET
`key. Hence all participants are assured that the other par
`ticipants have been approved to act in their required roles.
`0013 The use of the SET protocol is more secure than the
`straightforward use of SSL. Its more widespread use has
`been slowed by the requirement that Special Software is
`required to be installed by all participants and that customers
`are required to be issued digital certificates. In addition,
`nagging worries about Security Still exist. Although each
`digital certificate is protected by a pass phrase, if the pass
`phrase is compromised, unauthorized purchases can be
`made using the digital certificate. To address this issue, the
`SET protocol has built-in capability to accept digital certifi
`cates from personal tokens, Such as Smart cards. For Smart
`cards to be used for Internet transactions, many more
`
`computerS require card-reading capability. Although the use
`of Smart cards lessens the possibility of fraud, Stolen Smart
`cards could be used like Stolen credit cards to imperSonate
`the original owner.
`0014) According to Kenneth Kiesinoski (“Digital Wallets,
`"Bank Systems+Technology, October 1999) both client
`based and Server-based digital wallets have a number of
`proponents. The digital wallet is an application that Stores
`financial account information, account-owner names, billing
`and Shipping information, and other information that might
`typically be required to make an electronic transaction. At
`the customer's direction, all or part of this set of information
`is transferred to the vendor at the time of purchase. This
`Saves the customer the trouble of typing all that information
`and possibly making an error.
`0015. In a client-based digital wallet the application
`program resides on the customer's computer. One difficulty
`with client-based electronic wallets is their lack of portabil
`ity. Every time the customer uses a different computer, the
`information that had been stored in the digital wallet must be
`reloaded into the Same or Similar program on the current
`computer. Another issue is that important personal and
`financial information resides on the client's computer. Tra
`ditionally, personal computerS have not been particularly
`Secure machines. Individuals with appropriate computer
`expertise who have physical access to a particular personal
`computer can generally extract information from it. Until
`recently, Security breaches of personal computers from the
`outside were generally limited to viruses and worms embed
`ded in downloads and email messages. Use of cable modems
`and other devices that facilitate continuous or near-continu
`ous connectivity increases the probability for an increased
`number of Security breaches of personal computers.
`0016 A server-based digital wallet resides on a server
`connected to the Internet. Most server-based digital wallets
`had been marketed by banks and did not accommodate
`information from cards issued by competing banks. More
`recently, the trend has been shifting towards allowing mul
`tiple cards backed by different organizations to be included
`in the digital wallet. Server-based digital wallets provide
`more flexibility than client-based digital wallets in that they
`can be accessed from any computer. Presumably, Server
`based digital wallets are maintained on computers that are
`more Secure than the typical personal computer, however the
`booty for a successful hacker is multiplied by the number of
`registrants whose information is Stored on that Server. In
`addition, each individual's data is protected only by a simple
`password, and members of the general public have been
`notoriously lax in choosing and maintaining passwords.
`0017 Hardware developments are also proposed to
`enable more Secure and flexible payments by computers.
`0.018) Bob Curley (“Paying at the PC.” Bank Systems+
`Technology, October, 1999) discusses two systems designed
`to interact with personal computers.
`0019. The first is the UTM MACHINE, developed by
`UTM Systems. A user inserts a credit or debit card into the
`UTMMACHINE and then Slides the UTMMACHINE with
`the inserted card into a floppy disk drive. The machine uses
`the heads of the floppy disk drive to read the magnetic Stripe
`on the credit or debit card. An Internet browser is then used
`to access a World Wide Web (WWW) page at the user's
`
`Petitioner's Exhibit 1006, Page 14
`
`

`

`US 2004/004.4627 A1
`
`Mar. 4, 2004
`
`bank. The WWW page simulates the action of an automated
`teller machine (ATM), complete with personal identification
`number (PIN) authentication. Vendor identification numbers
`can be entered on the WWW page to transfer funds to a
`particular vendor.
`0020. The second hardware development discussed by
`Curley is the INTELLIPACK 100, developed by NetPack.
`The INTELLIPACK 100 is a keyboard with built-in credit
`card and Smart card readers. Like the UTM MACHINE, the
`transactions occur without transmitting financial account
`information to the vendor. These hardware developments
`can make Internet transactions almost as Secure as point-of
`Sale financial transactions.
`0021 Additional hardware developments are further
`improving the Security of all credit and debit card transac
`tions.
`0022. In “The Biometrics White Paper,” Ashbourn dis
`cuSSes a large number of generic issueS associated with
`biometric identification for use in Security applications.
`Ashbourn defines biometrics "as measurable physiological
`and/or behavioural characteristics that can be utilised to
`verify the identity of an individual. They include finger
`prints, retinal and iris Scanning, hand geometry, Voice pat
`terns, facial recognition and other techniques.” Our use of
`the term “biometrics' and related forms of the word are
`intended to be consistent with the above-quoted definition.
`However, an individuals written signature and/or handwrit
`ing are not to be considered biometrics in the context of this
`application.
`0023 The Ashbourn paper also contains reviews of some
`particular products that are currently or will Soon become
`commercially available.
`0024 Precise Biometrics, in cooperation with iD2 Tech
`nologies and Miotec Oy is developing technology to enable
`the use of a fingerprint to enhance the Security of Internet
`transactions. Information on their web site is sketchy, but
`their proposed Scheme apparently uses a Smart card and a
`Separate reader that is connected to a personal computer. The
`Smart card would be inserted into the Separate reader, which
`would read the fingerprint data and Send the data to the Smart
`card chip. The chip on the Smart card would compare the
`fingerprint with the Stored template and if they match, Send
`off an Internet order. The use of a separate reader reduces the
`flexibility of the approach.
`0025. In U.S. Pat. No. 6,011,858 by Stock et al., a
`programmable memory card is adapted to hold personal
`information of a user and includes a biometric template of a
`physical characteristic of the user. The patent also discloses
`a biometric verification System that includes a biometric
`Scanner configured to generate a biometric template based
`on a physical characteristic of a user. The biometric Scanner
`is also configured to Verify each user's live physical char
`acteristic against the biometric template of the physical
`characteristic Stored on the memory card. A programmable
`memory card reader is also used. The programmable
`memory card reader is in communication with the biometric
`Scanner and is configured to receive a memory card and to
`communicate with the biometric Scanner to Store the bio
`metric template generated by the biometric Scanner to the
`memory card. The memory card reader is also configured to
`retrieve the biometric template Stored on the memory card
`
`and to ensure the Security of the information that relates to
`the applications Stored on the card. AS with the Precise
`Biometrics approach, the Separation of the biometric Scanner
`from the Smart card reduces flexibility of the system.
`0026. In U.S. Pat. No. 6,084.968 by Kennedy et al., an
`apparatus and method are described for providing multiple
`Secure functions in a host or wireleSS radiotelephone. The
`determination of the Secure function is determined by cre
`dential information carried on a Smart card or Security token.
`To provide for an authentication function, the Smart card
`may store biometric features of a user. AS in the previous
`patent, the Smart card is Separate from the device that obtains
`the live biometric.
`0027. In U.S. Pat. No. 6,016,476, Maes et al. describe a
`portable information and transaction processing System that
`uses biometric authorization and digital certificate Security.
`The System requires the use of a personal digital assistant
`(PDA) in which the user stores his or her financial and
`personal information.
`
`SUMMARY OF THE INVENTION
`0028 Selected embodiments of the invention address and
`resolve various aspects of the abovementioned difficulties as
`well as other issues that will be set forth in part in the
`description that follows, and in part will be obvious from the
`description, or may be learned by the practice of the inven
`tion. No particular embodiment is required to Solve any one
`particular problem Set forth above or below. Rearrangements
`of components in ways not explicitly described but which
`would be obvious to a skilled practitioner of the art are
`included in the broad Scope of the invention.
`0029. This invention empowers customers to retain more
`control over their personal data. Preferred embodiments of
`the invention provide the Vendor with Stronger assurances of
`receiving any non-cash payment, but limit the personal data
`accessible to the vendor. In various preferred embodiments,
`personal data provided to the Vendor in excess of that
`required to assure payment are provided in return for Some
`valuable consideration.
`0030. For example, a customer may wish to purchase a
`deliverable, which we define as any property, goods, or
`Services that the customer may receive in return for Some
`valuable consideration (other property, goods, Services, or
`money). The deliverable has a price, typically a monetary
`value, although the price could be set in terms of other forms
`of valuable consideration. In this example, Some party has
`an interest in receiving personal data about the customer. In
`preferred embodiments, this party is either the manufacturer
`or the vendor of the deliverable, although the precise rela
`tionship of this party to the transaction is not important. For
`instance, the party may be an affiliate of the Vendor or
`manufacturer or may be a company that has a contract with
`the Vendor or manufacturer. The category of personal data
`desired will be called a personal data field. For instance, a
`customer name would be a personal data field. The value of
`that personal data field is the Specific customer's name, for
`example, Jones.
`0031. In one preferred and illustrative embodiment of the
`invention, a party receives from the customer a value for at
`least one prescribed personal data field. The value of the at
`least one prescribed personal data field is certified as cor
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`Petitioner's Exhibit 1006, Page 15
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`

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`US 2004/004.4627 A1
`
`Mar. 4, 2004
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`responding to the customer. Finally, the price of the deliv
`erable is reduced by a prescribed discount. The prescribed
`discount is independent of the value of the prescribed
`personal data field. The discount depends only on the fact
`that the customer has provided a value for the prescribed
`data field. For instance, the discounter may offer a first
`discount to any customer from whom the discounter receives
`an age that is certified as belonging to the customer. Regard
`less of the value of the age, the discounter must provide this
`first discount. A Second discount might, for instance, be
`available to customers over age 65. The addition of the
`Second discount does not negate the fact that the first was
`provided without regard to the customers age.
`0032. Other embodiments of the invention involve meth
`ods by which a payment may be conveyed from a payer to
`a payee by means of a financial institution or other financial
`intermediary. The words “payer” and “payee' are intended
`to be very general terms to identify the party making the
`payment (the payer) and the party receiving the payment
`(the payee). In typical circumstances, the payee is a vendor
`and the payer is a customer, although the payment method
`is intended to be inclusive of arrangements that include
`multiple additional parties.
`0033. The term financial intermediary is intended to
`cover a broad range of entities. The term includes not only
`traditional financial institutions Such as banks, credit unions,
`Savings and loans organizations, credit-card companies, and
`the like, but also includes private companies, private account
`vendors, private trusts, private reserves, private depositories,
`private escrow Services, individual perSons or any other
`designated entity, and the like, that can legally maintain
`accounts and transfer monetary value between accounts. The
`transfer of monetary value between accounts includes trans
`fers wherein the accounts are maintained in Separate finan
`cial intermediaries as well as transferS in which the accounts
`are maintained in the same financial intermediary.
`0034 Preferably, the financial intermediary is an entity
`and/or person(s) bilaterally agreed upon and bilaterally
`trusted by both the payer and the payee to Serve as an
`eScrowing agent, transaction agent, transaction conduit, or
`other enabling means for moving payments, credits, etc. to
`the payee account or destination of choice, from the payer
`account or Source of choice.
`0035. One embodiment of a method by which a payer
`conveys a payment to a payee involves receiving payer
`payment information from the payer. The payer payment
`information includes at least three pieces of information: the
`address of the payer's financial intermediary, payer account
`data that specifies a payer account from which payment is to
`be made, and a personal identifying device control desig
`nation.
`0.036 The address of the financial intermediary can take
`any or Several of many forms. The address could be a
`physical address to which physical mail or packages could
`be sent. The address could also be an address on an open
`computer network, Such as the Internet, or a routing address
`for a closed computer network, Such as the proprietary
`banking network now in use. In other embodiments, the
`address of a financial intermediary is a phone or fax number.
`The address could be the name of the financial intermediary
`if information as to where to send data could be determined
`from other Sources. In general, the address of the financial
`
`intermediary includes any information from which an appro
`priate destination for Sending data could be determined.
`Because only an address is required, the actual identity or
`identities of the financial intermediary or intermediaries is
`neither mandatory, nor necessarily revealed.
`0037. The payer account data specifies from what
`account the payment is to be made. The payer account does
`not need to be of any Special type. For instance, it can be a
`checking account, a Saving account, a money-market
`account, a credit-card account, or the like, or any other
`appropriate account. The account data may include a single
`account or Several accounts associated with the payer. Ref
`erences to the payer account are intended to include either a
`Single Specified account or a set of accounts. For instance,
`the payer account data might Specify that a certain percent
`age of the payment be funded from a specified checking
`account and the balance be funded from a Specified credit
`card account. This combined payment should be understood
`as being made from the payer account. In cases using
`multiple accounts to fund Such a transaction, multiple payer
`financial intermediaries may be called on to participate, thus,
`multiple payer financial intermediary addresses might be
`involved. These more complex cases are included within the
`Scope of the invention.
`0038. The personal identifying device control designa
`tion is an identifying Sequence of data given to a personal
`identifying device (PID). Preferably, the identifying
`Sequence of data is a String of ASCII characters although a
`pure data Stream with no corresponding ASCII equivalent
`can also be used. In many preferred embodiments, the PID
`control designation is unique to each PID. However, in Some
`embodiments, the PID control designations are not unique.
`For instance, a group of PIDS issued to a single company
`might all have the identical PID control designation. PIDs
`will be discussed in cons