(12) United States Patent
`Hoffman
`
`(10) Patent No.:
`(45) Date of Patent:
`
`US 7,152,045 B2
`Dec. 19, 2006
`
`US007 152045B2
`
`(56)
`
`References Cited
`
`U.S. PATENT DOCUMENTS
`
`3,564,132 A
`
`2f1971 Baker
`(Continued)
`FOREIGN PATENT DOCUMENTS
`
`EP
`
`O581421 A1
`2, 1994
`(Continued)
`OTHER PUBLICATIONS
`Mark Rechtin (Fingerprint Technology for Best ID System, Orange
`County Business Journal, May 14, 1990).*
`(Continued)
`Primary Examiner Andrew J. Fischer
`Assistant Examiner Cristina Owen Sherr
`(74) Attorney, Agent, or Firm Marger Johnson &
`McCollom, P.C.
`
`(57)
`
`ABSTRACT
`
`A tokenless identification system and method for authoriza
`tion of transactions and transmissions. The tokenless system
`and method are principally based on a correlative compari
`Son of a unique biometrics sample, such as a finger print or
`voice recording, gathered directly from the person of an
`unknown user, with an authenticated biometrics sample of
`the same type obtained and stored previously. It can be
`networked to act as a full or partial intermediary between
`other independent computer systems, or may be the sole
`computer systems carrying out all necessary executions. It
`further contemplates the use of a private code that is returned
`to the user after the identification has been complete, authen
`ticating and indicating to the user that the computer system
`was accessed. The identification system and method of
`additionally include emergency notification to permit an
`authorized user to alert authorities an access attempt is
`coerced.
`
`11 Claims, 14 Drawing Sheets
`
`(75)
`(73)
`
`(*) Notice:
`
`(54) TOKENLESS IDENTIFICATION SYSTEM
`FOR AUTHORIZATION OF ELECTRONIC
`TRANSACTIONS AND ELECTRONIC
`TRANSMISSIONS
`Ned Hoffman, Sebastopol, CA (US)
`Inventor:
`Assignee: Indivos Corporation, San Francisco,
`CA (US)
`Subject to any disclaimer, the term of this
`patent is extended or adjusted under 35
`U.S.C. 154(b) by 816 days.
`Appl. No.: 10/241,374
`Filed:
`Sep. 10, 2002
`
`(21)
`(22)
`(65)
`
`Prior Publication Data
`US 2003/O 105725 A1
`Jun. 5, 2003
`
`Related U.S. Application Data
`(63) Continuation-in-part of application No. 09/639,948,
`filed on Aug. 17, 2000, which is a continuation-in
`part of application No. 09/398.914, filed on Sep. 16,
`1999, which is a continuation-in-part of application
`No. 09/244,784, filed on Feb. 5, 1999, now Pat. No.
`6,012,039, which is a continuation-in-part of appli
`cation No. 08/705.399, filed on Aug. 29, 1996, now
`Pat. No. 5,870,723, which is a continuation-in-part of
`application No. 08/442,895, filed on May 17, 1995,
`now Pat. No. 5,613,012, which is a continuation-in
`part of application No. 08/345,523, filed on Nov. 28,
`1994, now Pat. No. 5,615,277.
`
`(51)
`
`(52)
`
`(58)
`
`Int. C.
`(2006.01)
`G06F 7/60
`(2006.01)
`G06K 5/00
`U.S. Cl. ............................ 705/43; 705/44; 705/45;
`705/50: 235/379; 235/380: 235/382
`Field of Classification Search ............ 705/43-45,
`705/50: 235/379,380,382
`See application file for complete search history.
`
`| f TELEPHONE
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`US 7,152,045 B2
`Page 2
`
`U.S. PATENT DOCUMENTS
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`5,144,680 A
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`5,168,520 A 12, 1992 Weiss .......................... 380.23
`5,177,342 A
`1/1993 Adams
`5, 180,901 A
`1/1993 Hiramatsu .................. 235,380
`5, 191,611 A
`3/1993 Lang ........................... 380.25
`
`235,382
`382,124
`382,115
`
`5/1993 Lee ............................. 356/71
`5,210,588 A
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`5,220,501 A
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`5,222,152 A
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`5,224,173 A
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`5,229,764 A
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`5,230,025 A
`8, 1993 Deaton et al.
`5,237,620 A
`8/1993 Parrillo ........................ 380.23
`5,239,583 A
`8, 1993 Horie ...
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`5,241,606 A
`5,251.259 A 10/1993 Mosley ........................ 380.23
`5,265,008 A 1 1/1993 Benton et al.
`5,265,162. A 1 1/1993 Bush et al. ................... 380.24
`5,274.695 A 12, 1993 Green ......................... 379.88
`5,276,314 A
`1/1994 Martino et al. ............. 235,380
`5,280,527 A
`1/1994 Gullman et al. .............. 380.23
`5,291,560 A
`3/1994 Daugman
`5,305,196 A
`4, 1994 Deaton et al.
`5,321,242 A
`6/1994 Heath, Jr. ....
`5,325,442 A
`6/1994 Knapp ..
`5,335,288 A
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`5,341,428 A
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`5,343,529 A
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`5,347,580 A
`9, 1994 Molva et al.
`382,115
`5,351,303 A
`9, 1994 Willmore ....
`235,379
`5,354,974. A 10/1994 Eisenberg
`382,117
`5,359,669 A * 10/1994 Shanley et al.
`5,383,113 A
`1/1995 Kight et al. .................. TO5/40
`5,386,103 A
`1/1995 DeBan et al.
`5,386,104 A
`1/1995 Sime .......................... 235,379
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`5,412, 190 A
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`5,412,738 A
`5/1995 Brunelli et al. ............. 382,115
`5.448,471 A
`9, 1995 Deaton et al.
`... 705/50
`5,457,747 A 10, 1995 Drexler et al. ..
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`5.499,288 A
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`5,502,774 A
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`5,546.523 A
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`9, 1996 ItSumi et al.
`5,561,711 A 10, 1996 Muller ....................... 379,266
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`5,592,377 A
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`5,602,933 A
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`5,604,802 A
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`5,613,012 A
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`5,615,277 A
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`382,115
`5,636,282 A
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`5,663,546 A
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`5,790,668 A
`8/1998 Tomko ........................ 380.25
`5,793,027 A
`8, 1998 Baik
`
`379,145
`379,266
`
`
`
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`US 7,152,045 B2
`Page 3
`
`9, 1998 Pare, Jr. et al. ............. 382,115
`5,802,199 A
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`5,956,700 A
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`6,029, 195 A
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`6,072,894. A *
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`2001/0000045 A1
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`
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`
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`of rent-to-own stores has dropped slightly in the last two years, there
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`
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`* cited by examiner
`
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`U.S. Patent
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`Dec. 19, 2006
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`Sheet 1 of 14
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`US 7,152,045 B2
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`U.S. Patent
`U.S. Patent
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`Dec. 19, 2006
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`Sheet 2 of 14
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`US 7,152,045 B2
`US 7,152,045 B2
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`IPR2022-00602
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`U.S. Patent
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`Dec. 19, 2006
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`Sheet 3 of 14
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`US 7,152,045 B2
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`U.S. Patent
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`Dec. 19, 2006
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`Sheet 4 of 14
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`US 7,152,045 B2
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`U.S. Patent
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`Dec. 19, 2006
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`Sheet S of 14
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`US 7,152,045 B2
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`U.S. Patent
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`Dec. 19, 2006
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`Sheet 6 of 14
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`US 7,152,045 B2
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`U.S. Patent
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`Dec. 19, 2006
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`Sheet 7 of 14
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`US 7,152,045 B2
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`Biometric
`Sample -
`FIC
`
`Mandatory
`Data
`
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`Fig. 9
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`U.S. Patent
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`Dec. 19, 2006
`
`Sheet 8 of 14
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`US 7,152,045 B2
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`
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`Bionnetric
`Sample +
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`U.S. Patent
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`Dec. 19, 2006
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`Sheet 9 of 14
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`US 7,152,045 B2
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`U.S. Patent
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`Dec. 19
`
`, 2006
`
`Sheet 10 of 14
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`US 7,152,045 B2
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`U.S. Patent
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`Dec. 19, 2006
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`Sheet 11 of 14
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`US 7,152,045 B2
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`FIG 17
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`U.S. Patent
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`Dec. 19, 2006
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`Sheet 12 of 14
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`US 7,152,045 B2
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`‘ON QuauunooG
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`U.S. Patent
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`Dec. 19, 2006
`
`Sheet 13 of 14
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`US 7,152,045 B2
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`Hedd Portion
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`U.S. Patent
`
`Dec. 19,
`2006
`
`Sheet 14 of 14
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`US 7,152,045 B2
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`US 7,152,045 B2
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`1.
`TOKENLESSIDENTIFICATION SYSTEM
`FOR AUTHORIZATION OF ELECTRONIC
`TRANSACTIONS AND ELECTRONIC
`TRANSMISSIONS
`
`RELATED APPLICATION DATA
`
`This application is a continuation-in-part of U.S. patent
`application Ser. No. 09/639,948 filed on Aug. 17, 2000, now
`pending, which is a continuation-in-part of U.S. patent
`application Ser. No. 09/398.914 filed Sep. 16, 1999, now
`pending, which is a continuation-in-part of U.S. patent
`application Ser. No. 09/244,784 filed Feb. 5, 1999, now U.S.
`Pat. No. 6,012,039, which is a continuation-in-part of U.S.
`patent application Ser. No. 08/705.399, filed Aug. 29, 1996,
`now U.S. Pat. No. 5,870,723, which is a continuation-in-part
`of U.S. patent application Ser. No. 08/442,895 filed May 17,
`1995, now U.S. Pat. No. 5,613,012, which is a continuation
`in-part of U.S. patent application Ser. No. 08/345,523, filed
`Nov. 28, 1994, now U.S. Pat. No. 5,615,277, all of which are
`commonly assigned and incorporated herein by reference.
`
`10
`
`15
`
`BACKGROUND OF THE INVENTION
`
`2
`fraud losses skyrocketed. The staggering statistics on fraud
`and cost of preventive steps, has forced the credit card
`companies in particular, to look for other Solutions to the
`problem.
`Fraud losses in the credit card industry stem from many
`different areas due to the highly vulnerable nature of the
`system, but they are mainly due to either lost, stolen, or
`counterfeit cards. Credit cards operate without the use of a
`personal identification code (PIC), therefore a lost credit
`card can be turned into cash if the card falls into the wrong
`hands. While theft of a token constitutes the majority of
`fraud in the system, the use of counterfeit credit cards has
`been on the rise. Counterfeit credit cards are manufactured
`by a more technically Sophisticated criminal by acquiring a
`cardholder's valid account number and then producing a
`counterfeit card using that valid number. The counterfeiter
`encodes the magnetic strip, and embosses the counterfeit
`plastic card with the account number. The card is then
`presented to merchants and charged up to the rightful
`cardholder's account. Another form of loss is by a criminal
`merchant who surreptitiously obtains the cardholder's
`account number. Yet another type of fraud is committed by
`the authorized cardholder when the token is used for making
`purchases and thereafter a claim is made that the token was
`either lost or stolen. It is estimated that losses due to all types
`of fraud exceeds S950 million dollars annually.
`Generally, debit cards are used in conjunction with a
`personal identification code (PIC). Counterfeiting a debit
`card is more difficult as the criminal must acquire not only
`the account number, but also the PIC, and then manufacture
`the card as in the credit card example. However, various
`strategies have been used to obtain PICs from unwary
`cardholders; these range from Trojan horse automated teller
`machines, or ATMs, in shopping malls that dispense cash but
`record the PIC, to merchant point of sale devices that also
`record the PIC, to individuals with binoculars that watch
`cardholders enter PICs at ATMs. The subsequently manu
`factured counterfeit debit cards are then used in various
`ATM machines until the unlucky account is emptied.
`The financial industry is well aware of the trends in fraud
`expense, and is constantly taking steps to improve the
`security of the card. Thus fraud and theft of token have an
`indirect impact on the cost to the system.
`Card blanks are manufactured under very tight security.
`Then they are individualized with the account number,
`expiration date, and are then mailed to the cardholder.
`Manufacturing and distributing the card alone costs the
`industry approximately one billion dollars annually. The
`standard card costs the financial industry S2 for each, but
`only S0.30 of this S2 is associated with actual manufacturing
`COSt.
`Over the last ten years, the industry has altered the tokens
`because of counterfeiting fraud, without any fundamental
`changes in the use of the credit transaction system. The
`remedy has been mostly administrative changes such as
`having customers call the issuer to activate their card. Other
`changes include addition of a hologram, a picture ID, or an
`improved signature area. These type of changes in particular,
`are an indication that the systems susceptibility to fraud is
`due to lack of true identification of the individual. It is
`estimated that this could double the manufacturing cost to
`two billion dollars annually.
`In the near future, the banking industry expects to move
`to an even more expensive card, called a “smart card'. Smart
`cards contain as much computing power as did some of the
`first home computers. Current cost projections for a first
`generation Smart card is estimated at approximately $3.50,
`
`The use of tokens and credit cards in today's financial
`world is pervasive. A token would be any inanimate object
`which coffers a capability to the individual presenting the
`object. Remote access of every financial account is through
`the use of tokens or plastic cards. Whether buying groceries
`with debit cards or consumer goods with credit cards, at the
`heart of that transaction is a money transfer enabled by a
`token, which acts to identify an individual and the financial
`account he is accessing.
`The reason for the migration from metal coins to plastic
`cards is simple and straightforward: access to money in this
`money transfer system is vastly safer and more convenient
`for both merchants and consumers than handling large
`quantities of coins and notes.
`Unfortunately, current technology in combination with
`this convenient token-based money transfer system results in
`a system that is prone to theft and fraud.
`As verification of user identity is based solely on data
`placed on the token, which can be easily reproduced and
`transferred between individuals, such security must rely on
`both the diligence and the luck of the authorized user and
`merchant in maintaining this information as proprietary.
`However, by their very nature, tokens do not have a very
`strong connection with the individual. Identification of the
`rightful owner of the token through the token is tenuous at
`best. This is easily demonstrated by the fact that individuals
`other than the rightful owners of the tokens have been using
`these tokens to defraud merchants and other consumer goods
`Suppliers.
`The mammoth expansion of the consumer credit industry
`during the 1980s brought with it large profits for issuers, and
`newfound convenience for consumers. However, as con
`Sumer credit became easier for consumers to acquire, it also
`became a target for criminals. Much as the mobility of the
`automobile led to a rash of bank robberies in the late 1920's
`and early 1930s, so too did the ubiquity of consumer credit
`lead to vastly increased opportunities for criminals.
`Initially, the banking industry was willing to accept a
`certain amount of loss due to fraud, passing the cost on to the
`consumer. However, as criminals became more organized,
`more technically adept, and as credit retail stations began to
`be manned by people who were more and more poorly
`trained in credit card security matters, the rate of increase of
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`3
`not including distribution costs, which is significantly higher
`than the S0.30 plastic card blank.
`This significant increase in cost has forced the industry to
`look for new ways of using the power in the Smart card in
`addition to simple transaction authorization. It is envisioned
`that in addition to storing credit and debit account numbers,
`Smart cards may also store phone numbers, frequent flyer
`miles, coupons obtained from stores, a transaction history,
`electronic cash usable at tollbooths and on public transit
`systems, as well as the customer's name, vital statistics, and
`perhaps even medical records. Clearly, the financial industry
`trend is to further establish use of tokens.
`The side effect of increasing the capabilities of the smart
`card is centralization of functions. The flip side of increased
`functionality is increased vulnerability. Given the number of
`functions that the smart card will be performing, the loss or
`damage of this monster card will be excruciatingly incon
`venient for the cardholder. Being without such a card will
`financially incapacitate the cardholder until it is replaced.
`Additionally, losing a card full of electronic cash will also
`result in a real financial loss as well. Furthermore, ability of
`counterfeiters to one day copy a Smartcard is not addressed.
`Unfortunately, because of the projected concentration of
`functions onto the Smart card, the cardholder is left more
`Vulnerable to the loss or destruction of the card itself. Thus,
`after spending vast Sums of money, the resulting system will
`be more secure, but threatens to levy heavier and heavier
`penalties for destruction or loss of this card on the consumer.
`The financial industry recognizes the security issues asso
`ciated with Smartcards, and efforts are currently underway to
`30
`make each plastic card difficult to counterfeit. Billions of
`dollars will be spent in the next five years in attempts to
`make plastic ever more secure. To date, the consumer
`financial transaction industry has had a simple equation to
`balance: in order to reduce fraud, the cost of the card must
`increase.
`In addition to and associated with the pervasiveness of
`electronic financial transactions, there is now the widespread
`use of electronic facsimiles, electronic mail messages and
`similar electronic communications. Similar to the problem
`of lack of proper identification of individuals for financial
`transactions is the problem of lack of proper identification of
`individuals for electronic transmissions. The ease and speed
`of electronic communication, and its low cost compared to
`conventional mail, has made it a method of choice for
`communication between individuals and businesses alike.
`This type of communication has expanded greatly and is
`expected to continue to expand. However, millions of elec
`tronic messages such as facsimiles and electronic mail (or
`“E-mail or “email’) messages are sent without knowing
`whether they arrive at their true destination or whether a
`certain individual actually sent or received that electronic
`message. Furthermore, there is no way to verify the identify
`the individual who sent or who received an electronic
`message.
`Recently, various attempts have been made to overcome
`problems inherent in the token and code security system.
`One major focus has been to encrypt, variab