Note: Descriptions are shown in the official language in which they were submitted.
9~447 218~9~5
TITLE: CoMpr-rTER ~TTcTIoN SysTEl'/r
FTr~r.n OF TME TMv~NTIoN
The present inV~rention relates to a computerized
auction system and a method for carrying out an auction
system where users access the auction system by remote
~rmi n;: 1 c .
BACKGRorrl'JTl OF rl'r~E TNVEl\rTIoM
Auctions for sale of products have proven to be
very popular and the success of the systems involve two
major features. Typically with auction systems, there is
the- possibility to obtain the product at a very competitive
price. In addition, there is the excitement and skill of
the.buyer who participates in the auction process and makes
fast decisions whether to continue to participate or to
recognize the price has become too high. The auction
process, traditionally, has been a relatively fast process
which changes quickly. T~e standard auction process
involves users bidding for a particular product, and the
product is sold to the highest bidder.
The dynamic nature of the auction process, in its
traditional form, is attractive to a certain number of
participants, but it is also an obstacle to a further group
of participants who do not wish to rush their decision
process For this reason, there are other variations of
the auction process where the time period for the auction
is much longer and the feedback of information tends to be
slower Some auction processes do not provide any real
time feedback, such as a silent auction process, where
users merely submit their bid, which is confidential.
A further variation of the auction process is a
reverse auction where the price of the product decreases in
a set manner during the time period of the auction and each
participant is provided with the current price, the
~uantity on hand and the time remaining in the auction.
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~ t WH 9~447 2 1 8 ~ 9 9 5
This type of auction, typically, takes place over a very
short period of time and there is a f lurry of activity in
the last portion of the auction process. The actual
auction terminates when there is no more product to be sold
or the time period e~pires. A reverse auction process has
been used very effectively in Holland for the sale of
f lowers to wholesalers .
The auction process for the sale of products has
also been used on lN'l'~;~N~'l'. In this case, the various
users send E-mail to the auction site with details of their
bid and identity. Details of the bid are posted on the
auction site computer and are available to other
participants. The auction process typically has a time
period of several days or weeks, and the product is
allocated to the highest bidders. This type of process
does not provide the excitement or the real time dynamic
feedback of a traditional auction or- a reverse auction.
One of the advantages of this system is the lack of
col[Lplexity in runnin~r of the auction process over lN'l'~'~N~;'l'
where E-mail is used to c~ te with the auction
computer .
srrM~r~RY (~F Tr-rr~ TTI~ l\T
The present invention is directed to a method of
auctioning products on-line where participants use computer
~n;n;llc to access a computer site and participate. The
method comprises maintaining a computer database of product
information, identifyil~g different products to be
auctioned, assigning to each product a designated time for
the product to be auctioned, promoting the product and the
designated time of the auction prior to the auction to
increase awareness of -~he product, carrying out an auction
at the designated time by setting a fixed time period for
completing the auction, displaying a- current price for the
product and decreasing the price of the product as the time
L ~ ; n; n~ in the auction decreases, displaying the quantity
of the product remainillg to be auctioned and decreasing the
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s WH 9'447 2 18 ~ ~ ~5
.
quantity to reflect, during the auction process,
instructions from purchasers of their desire to purchase
the product as the instructions are received thereby
providing dynamic ff~ k to potential purchasers during
5 the auction, providing each potential purchaser with a
designated actuation control for instructing the computer
site of the decision to purchase the product at the current
price at the time of receiving the instructions and
registering potential purchasers and obtaining and
10 recording financial data for automated payment of a
purchased product.
According to an aspect of the invention, the method
;n~ c removing each purchaser from the auction process
15 upon providing instructions to purchase the product at the
displayed current price at the time the instructions were
received. In this way the purchaser is not exposed to
further decreases in the price of the product, and is
removed from that particular auction process.
According to a further aspect of the invention, the
method includes registration of the purchaser or potential
purchasers which can take pIace as part of a pre-
registration process. The registration process can occur
25 on-line or can be carried out off-line.
According to a further aspect of the invention, the
method includes connecting the co}nputer site directly to
separate and distinct f;n;3nt~;~1 institutes for real time
30 confirmation of acceptable f;ni~n(~ l transaction of the
purchase price of a product. In this way, automated
payment conf irmation is carried out .
A computer site for auctioning a product on-line
35 according to the present invention comprises at least one
web server computer designed for serving a host of computer
browsers and providing said browsers with the capability to
participate in various auctions, where each auction is of a
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9447 2180~95
single product, at a specified time, with a specified
number of the product available for sale. The web server
co-operates with a separate database computer, separated
from the web server computer by a firewall. The database
5 computer is accessible to the web computer server computer
to allow selective retrieval of product information which
includes:
a) a product description;
b) the quantity of the product to be auctioned;
c) a start price of the product; and
d) at least one product image.
The web server computer includes custom written application
software for auctioning any product identified in the
database computer by displaying, during an auction, the
current price of the product, the quantity of the product
remaining available for purchase and the measure of the
time ~ ;n;ng in the auction, decreasing the current price
during the auction, providing a user actuation control for
indicating instructions to purchase the product at a
displayed current price, cnnt;n~ ly updating the current
price, the quantity of the product remaining available for
purchase, taking into account the product indicated as
purchased and the time l~ ;n;nS in the auction to provide
dynamic feedback to each user and removing the user from
the auction upon receiving an instruction signal from the
user and thereafter obtaining identification and required
financial authorization for the purchase of the product.
RRTl~ 5~RTPTION OF T~ TATTl\rGS
Preferred embocliments of the invention are shown in
the :drawings, wherein:
Figure 1 is an overview of the auction system.
Figure 2 is an overview showing part of the logic
processing for dealing with a user at the web site.
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' WH-9'447 218099~
Figure 3 is an overview showing logic regarding the
auction process.
Figure g shows various data f ields retained in the
5 database server.
Figures 5 to 11 are prints of various screens that
the computer system provides to the user during browsing at
the site and during the auction process.
DETAII~ED DES('~TPTION O~ E~qBODIM~I~TS
Figure 1 is an overview of the auction system 2.
With this system a host of users shown as 8, access the web
15 site g using LL~LL~ 5. Each of the users 8 has a
computer terminal with the appropriate software for
accessing L~LL~ !;'1'. Tlle users 8 are unknown to the web
server computers 10 and 12 and allow each user 8 to browse
the web site and explore how the auction system functions.
There are several aspects which have to be
addressed to m~l;nt;l;n security of information m;l;nti~;n~-~l in
the database server 22 as well as the banking system shown
as 28. A firewall 20 prevents any user 8 from accessing
25 any of the components behind the firewall 20. In this way
the users have access to ~he web server computers 10 and
12, but only have access to the database server through the
firewall 20. The database server maintains, amongst other
things, various database fields with respect to each of the
30 products which are slated to be auctioned. As shown in
Figure 4, these datafields include a UPC code, a product
description, an auction date and time, a current quantity,
a starting price for the auction, a closing price for the
auction, a large product image, a small product image,
35 product carry, warranty cost, a minimum cost, a designation
whether a warranty is available, an auction end time, a
product catalogue, a product weight which is used as part
of the shipping costs, an extended product description, a
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' ' ~9447 2180995
product street price, a product vendor allocation as well
as an auction product number. The database maintains each
of the products with a time des; ~nAt; ~n associated
therewith as this time designation control is used by the
5 system to ~ t.-rm;n~ wh~t products can be browsed by the
users. Each of the web server computers 10 and 12 do allow
users to view product categories and actual products which
are~slated to be auctioned within a specified time period,
typically about one week, to generate interest in
10 particular products. 1~11 products that are slated to be
auctioned are not listed and browsers are encouraged to
return to the web site on an ongoing basis to see what new
products are to be auctioned in the near future. It can be
appreciated that the time designation control allows this
15 to be eas ily accomplis]led .
The web server computers 10 and 12 are i~nt; ~
and can be duplicated as additional load on the system
occurs. RAC;.~A11Y/ the web server computers 10 and 12
20 share the responsibility ~or servicing the users of the
site. This arrangement provides for immediate
~srrAn~Ah;l;ty of the system by merely adding additional web
server computers as necessary.
Preferably, the system includes an appropriate
computer terminal designated 24 for interphasing with
independent f;nAn~-;Al institutes which are connected on-
line via the serial connection 26 to the f;nilnf ;Al
institute computers de,~ignated as 28. This allows
automatic real time confirmation of the purchase of auction
products as will be more fully explained. Basically, once
a user has indicated that he wishes to purchase a product,
he is removed from the auction process and goes through an
identification or regi~tration process as well as the
exchange of f;nAn~-;Al inf~3rmation to allow for credit or
debit card payment of the purchase. This is then c~-nf; -~1
and authorized by the appropriate irstitute designated in
Figure 1 as the bark system 28. t~nf;r~-t;on of the
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' ~g~L47 218~
purchase is made by the mail server 34 which sends E-mail
to the user ~nf;rmins the purchase. It is also used to
send updates of upcomillg information The mail server 34
only allows mail to be sent out, and is not capable of
5 receiving mail. In this way, security of the databases= are
various rnA;n~A;n~sr1 Tlle database server 22 is also
designed to interact with the input computer designated as
32. A firewall 30 ser~es to prevent unauthorized access to
the database server or to the input computer.
Figure 2 provides additional insight into how a
browser can participate in the auction process. Once a
browser has gone through a number of ~ preliminary screens
(Figures 5 and 6), he is exposed to the logic generally
15 shown in Figure 2. In this case there is a screen 60
entitled "Next on the ~lock" (Figure 7). This screen
provides category information generally indicated as 62, in
Figure 2 and Figure 7, of upcoming auctions and clicking on
any of these categories allows the user to review product
20 details generally shown as 64, in Figure 2 and Figure 8.
In addition, it is possible to get details of auctions at
other times generally indicated as box 66. In this way,
the user can index through a number of screens to get
information regarding ~pcoming products to be auctioned
25 that may be of interest to him. In addition, he is allowed
to click on any of the triggers identified as 70, 72, 74
and 76. These correspond to HOW IT WORKS, SECURITY,
~:X'I'~:NI~:I) WARR~MTY and PRE-REGISTRATIOM. Clicking on
trigger 70 provides the u~er with information on how the
30 auction process warks, OEplains the reverse auction and
provides details on ho~A~ the user can participate in the
auction. Clicking on trigger 72 provides details regarding
security of the system and automated payment. In some
cases, products are offered with OEtended warranties and
35 clicking on trigger 74 can provide details of the OEtended
warranties and explain3 that they may only be available on
certain products.
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' WH-9'447 218~5
Trigger 76 allows a user to pre-register and obtain
a user I.D. number. This use~ I.D. num'Der is ~ n~ with
certain f;n~n~;Al information retained in the database in
an encrypted form. The pre-registration trigger 76
5 illustrates step 78 which is gathering of personal
information such as credit card number and expiry date to
allow for ;Illt~ -t~1 payment. It requires step 80 to
validate existence in the database if this in fact occurs,
the answer is no, the user is forced into a registration
10 process indicated as 82. A user I.D. is assigned and a
password is entered. This information is maintained in the
database 22. At step ~4 he is then provided a screen
identifying his user I.D. at 86.
If the user already exists, the registration
process is rej ected at 88 and the user is advised of his
information at display 86.
Figure 5 shows the opening screen presented to a
20 browser when they visit the web site 4. In this case there
are basically six triggers that the browser can actuate.
There are triggers 70, 72, 74 and 76 as previously
discussed, as well as the auction trigger 88 and the mall
trigger 90. The mall is basically a normal sale-type
25 approach whereas actuation of the auction trigger 88 takes
the user to the screen shown in f igure 6 . The screen shown
in Figure 6 has triggers 92 and 94. These are basically
country designations and therefore provides information
relevant tD each of the two countries. It is apparent that
30 this system is a worldwide system, however, not all users
will be able to purchase products in all auctions. At
least ;n;t;;~lly, it is desirable to limit the auctions to
users where the sale is relatively straightforward, and
avoid problems such as duties, custom clearing and other
35 issues associated with crossing of national boarders.
Therefore the screen shown in Figure ~ 6 allows the user to
at least indicate what country he is interested in
~eviewing au~ons ~or. The ability to view these auctions
9447 21gU9~5
does not necessarily allow the user to purchase products
of f ered in the auctions .
The screen sho~Am in Figure 7 is referred to as next
5 on the block. On the left-hand side of the screen, various
triggers are provided in~l;r~ l as triggers 70, 74, 76, 88,
90 and 96, which is the home trigger. These are fixed
Additionally, there is a small advertisement showing the
product next to be auctioned at 98. This is the small
10 product image and is basically an advertisement.
On the right-hand side of the screen, category
designations of up-coming auctions are shown. Initially,
the ~user is taken to t~le current date, indicated at 100,
15 provided with the current time, indicated as 102, and is
provided with auction time and category information at 104.
The first category "After School" is shown at 106 and a
second category "Consumer Electronics" is showm at 108. In
each case there is a specified time period showing when
20 auctions will occur. There are also other dates provided
at 110 which the user can ex~lore for different product
categories. Clicking on any of the dates shown at 110 will
provide a screen similar to Figure 7 but with the various
times and product categories shown at 104 for that
25 particular date Clic]~ing on one of ~ the categories 64 will
provide additional information. This additional
information is shown in Figure 8 for the category "After
Schooln. In this case, four different options are showm
starting at the time period 16: 00 . It can be seen that
30 each of the auctions are of a duration of five minutes and
the particular product to be ~ n~(1 is listed with a
brief product description. Clicking on any of these
additional brief product descriptions will access a
further, more complete product description, a larger
35 product image and a suggested street price of the product.
This screen is showm in Figure 9 for a coffeemaker
displayed on the right--hand side of the screen.
_ g _
9447 218~995
The various screen shown in Figures 5 through 9
involve the use of varlous applications which are
maintained on the web server computers 10 and 12. The
user's reguests ~tPrm;n.- what applications are used to
5 retrieve data from the database server 22. These web
server computers do maintain various product images that
are reguired for the specified time period. For example,
all products to be auctioned which can now be browsed by a
user. The small image used on the left-hand side on the
10 "Next on the Block" screen as well as the more detailed
image used in the right-hand portion of the screen shown in
Figure 9 are stored on the web server computers. In
addition, various templates are maintained on each web
server computer. With this ~l~LL~ t, the various
15 applications which are m~;nt~inP~ on each web server
computer merely has to obtain information from the database
server, which information must pass through the firewall
20. The web server then merges this information with the
appropriate product irnages and templates and presents the
20 appropriate information to the user. This reduces the
transaction time. It also provides a system which is
highly reliable and secure. As can be appreciated, the web
server does not r-;ntA;n sensitive data and merely
retrieves data from the database when reguested by the
25 user. This allows fast response to service reguests and
rapid expi ~n~h; 1; ty of the system. The images are large,
non-sensitive records and improved speed is achieved by
having the web server computers additionally r ;nt~;n these
product images.
Details of the auction process are generally shown
in Figure 3. The screen for "Next on the slock" shown in
Figure 8 and in Figure 7 allow the user to actuate trigger
88 and enter the auction process. This trigger takes the
35 browser to the logic of Figure 3. A decision is made at
120 whether in fact an auction is in progress. If an
auction is in progress, the web server obtains current
product information from the database server indlcated at
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~9'447 2~80~5
step 122. If there is no auction in process, they return
to the "~ext on the Block" screen indicated at step 124.
This returns the user to the screen shown in Figure 8.
Once the web server has obtained the current product
5 information indicated as 122 in Figure 3, the screen shown
in Eigure 10 is eventually produced. In order to produce
the screen, the web se1~ver computer obtains next product
information indicated at step 124 and this is displayed at
126 on the left-hand side of the screen of Figure 10. A
10 decision is also made at 128 whether the browser is frame
based, or whether it is the standard HTML 2 . O type browser.
Because of the wide difference in the two types of
browsers, these are each dealt with separately. Figure 10
is a frame based system and therefore produces the screen
15 of Figure 10. This screen includes a large product image
13 0, a brief product description shown as 132 and a
detailed product description shown as 134. This portion of
the screen is relatively constant during the auction
process. In addition, there is the time and date at 136.
20 On the left-hand side there are the various triggers and
the product which is "~ext on the Block". The auction
process and the really dynamic variables of the auction
process are shown at the bottom portion of the screen
indicated as 140. The first column 142, shows the number
25 of units L~ ;n;ng to be auctioned. In this case, there
are ten units L~ ln;ng to be auctioned. The price of the
unit, at the current time, is shown at 144 and is $260 . 00 .
The last column 146 identifies the time L~ lning in the
auction as being two minutes. There is also the trigger
30 150 indicating the desire to buy the product at the
particular pric~.
The number of units left, the current price and the
time lef t in the auction are fre~uently updated and in the
35 last few minutes of the auction are updated at five second
intervals. The number of units left are updated to clearly
reflect the number of purchases indicated during the
process. The price is decreasing as the time L~ ;n~n~ in
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9447 2180~5
the auction decreases. The price decreases in a pre-
~l~tPrm;ne~ manner. The database server provides the number
of units left, the current price and the time left to the
web server computer. ~ith this aLLc~lly ~nt, the user is
exposed to the dynamics of the auction process and must
gauge the value of buying the product at that particular
price versus delaying his decision to purchase and hope
that the price will decrease assuming that there will still
be products left to pu~-chase. The auction r~n~;nll.oC until
the number of units left to be sold is zero, or the time
left in the auction ex~~ires. By decreasing the price, the
demand for the product increases. The auction process will
assume that there will be a certain fall-out rate in the
actual purchase ~~nf;nr~tion and there can be some over-
selling of the product. If a user decides to purchase, he
merely clicks on the trigger 150 indicating his choice to
buy the product at that particular price. Once this
trigger is actuated, the user is removed from the auction
process and he is asked to complete the screen shown in
Figure 11. If the user has pre-registered, he may merely
enter his user I.D. and PIN number for security at 160.
This is typically the first time the identity of the user
is known. If he is not registered, he is forced to fill in
the various fields sho~qn below the user I.D. This purchase
confirmation screen has a fixed time period to be completed
and as stated, has a life span of two minutes.
Confirmation that the user wishes to ~ nt;n~l~ is indicated
by pressing trigger 162 at the bottom of the screen,
;n~ A~;n~ that he wishes to proceed. Actuation of trigger
162 produces the screen shown in Figure 12. Again, this
screen has a life span of two minutes. Additional
information has now been provided regarding the purchase of
the :product. The unit cost of the product, which was the
current price when the user ;n~;-A~ that he wished to
purchase it, is provided at 164. The freight cost has been
determined based on the user ' s address, and is shown at
166. Various taxes are computed and displayed at 168 and
170 and the total price is shown at 172. The user then can
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' WH-9447 218~9~5
either indicate that h~ wishes to proceed by actuating
trigger 174 or if he wishes to cancel the process,
indicated by trigger 1~6. If wishing to purchase, the user
is then forced to provide credit card information indicated
at lines 178 and 180. Once the user has indicated his
desire to purchase the product, and has entered the
information requested as shown in the screens in Figures 11
and 12, the data is stored in the database server in an
encrypted form. The data being the user's name and address
and E-mail address, as well as credit card information.
This provides additional security to the user.
Assuming the user wishes to confirm the purchase at
the end of the screen shown in Figure 11 the database
server then takes the ~;n~nr ;7~1 information and sends the
pertinent inf-~rr=t;~n to the bank system for; ~ tf~
authorization. Real time feedback is preferably provided
directly to the user. If the transaction is turned down
for any reason and the auction process remains in process,
the quantity figure is appropriately adjusted higher. This
quantity figure was decreased once the user indicated his
desire to purchase.
If the transaction is authorized, then E-mail
confirmation is sent by the mail server 34 to the user. If
the~transaction is not authorized, this can also be
indicated to the user by E-mail. With the present system,
it can be appreciated that although the user participates
in the auction process, the actual commitment to purchase
the product is not made until full costs are known,
;n~ ;n~ the freight costs and appropriate taxes. If the
user decides not to purchase the product, the product is
returned to the auction if the auction is still in
progreas. It can also be appreciated from the above
description that the user is removed from the auction
process as soon as a commitment to purchase is made. In
this way, the final, or lowest price- of the product is not
known to the user.
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9447 218099~
The database server c~-operates with each of the
web server computers to allow for the rapid feed of
information to the web server computers n~c~ ry to allow
5 the.user to be exposed to the dynamic nature of the
auction . This dynamic f eedback includes the results of
multiple users with feedback occurring in seconds as
opposed to minutes hours or days. It also allows the
auction system to respond to a host of simultaneous
10 triggers. Each web sel~ver is i3ldividually servicing many
users. Many different auctions can be occurring at the
same time and therefore each web server provides the
appropriate feed back to each user.
The user's identity is also used to confirm that he
was qualified to participate within the auction. Once the
identity is known, non--qualified part;c;p~nt~ can be so
advised and the indication to purchase cancelled.
Another feature of the auction system is the
ability to track the price demand nature of the product.
This provides valuable marketing information to the
manufacturer. For example, in trying to ~F~t~rm; nG the
response at different prices, companies have to conduct
various tests. In contrast with the auction system as shown
a lot of information regarding price and demand is
immediately known. The relationship between this type of
purchasers and the average purchaser can then be applied to
provide a conventional price demand curve f or the
particular product. Ir can readily be appreciated that the
computer system provides the demand price curve.
In order to provide good feedback to users
supporting the standard HTML 2 . O type browser, only a
single auction screen is provided which has the number of
units Ll ;n;n~, the current price and the time L~ ;n;n~
in the auction. This type of browser is slower, but it
does provide for relatively rapid fe=edback during the
auction process.
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WH=94~7 218~95
The web server computers are application based and
builds each page as requested by a user. 3.arge volumes of
re~uests can be not vely quickly. Individual requests are
ser~iced by the system within 70 milliseconds with loads up
5 to about 90% capacity. At this point performance drops off
and an additional web server is added which funs the same
sof tware to assume additional load.
The system for the auction process responds to
10 actuation of the trigger 150 to update the sales and to
remove the user from the auction process. The additional
information is gathered in a less ~1 1;n~ environment.
The actual dynamic variables of the auction is current
price, ~auantity L. ;n;n~ and time Li in;n~ are refreshed
15 at a fast rate (typically between 5 and 10 seconds).
The web server computers can be DEC AIPHA 400
computers and the database server can be a DEC ALPHA 1000.
The present system is designed to allow many users
to participate in the auction process and rapidly process
and provide feedback o~ sales as they are indicated many
times within the last minutes of the auction. This
requires the capabilit~ to rapidly process information and
provide rapid updates to all users. With this arrangement
the dynamic nature of a conventional reverse auction where
users are all present at the same location is provided
without all users being physically present in one location.
The system can provide this feedback over ~
making it available to hundreds of thousands of potential
users .
Although various preferred embodiments of the
present invention have been described herein in detail, it
will be appreciated by those skilled in the art, that
variations may be made thereto without departing from the
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' ~9447 218n995
spirit of the invention or the scope of the appended
claims .
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