Note: Descriptions are shown in the official language in which they were submitted.
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A SYSTEM, METHOD, AND PROGRAM FOR ENABLING AN E-COMMERCE
DATABASE SERVER TO PROVIDE JURISDICTIONAL INFORMATION TO
FACILITATE E-COMMERCE SALES BY A WEB SERVER
BACKGROUND OF THE INVENTION
Field of the Invention
This invention relates to electronic commerce (e-commerce) over the Internet,
and more
specifically to a system, method and program for providing to an e-commerce
retailer necessary
jurisdictional type of information for carrying out sales to geographically
dispersed buyers.
Description of the Related Art
One of the major problems that a seller/retailer has in completing
transactions over the
Internet is determining the laws of the jurisdiction of the customer that
govern the transaction. The
recent furor about Amazon.com selling "Mein Kampf' and other banned books in
Germany in
violation of German laws has highlighted the problem. This problem does not
exist for a physical
retailer where the buyer typically comes to the store to complete the
transaction because the store
physically exists in the same geography as the customer. The retailer knows
the applicable local
laws because both the retailer and the customer conduct the transaction within
the same jurisdiction.
On the Internet, the verification of the actual identity of the buyer, or the
buyer's location or place
of residence, may not be possible. Merely querying the buyer for the
applicable jurisdiction may not
result in reliable and trustworthy information.
In e-commerce today, there are many small Internet retailers (and some not-so-
small) who
need information relating to local laws in various counties, cities, states,
and countries for taxes,
value added taxes (VAT), sale restrictions, other tax laws as they pertain to
e-commerce sales, and,
in some circumstances, even information on customs and duties. This
information is expensive to
collect and correlate by a single retailer. A typical small web server for a
"mom and pop" shop, that
merely runs its business on a relatively small computer system, such as one
running the Windows
NT operating system, does not have the capacity or the operating overhead
resources to handle this
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type of information for every jurisdiction of each client that may visit their
web site for purchase of
their on-line products. If Amazon.com, the premier distributor of electronic
merchandise, could not
properly apply the applicable laws to a sale to a client within a different
jurisdiction, other smaller
e-commerce retailers will have even more difficulty in handling this aspect of
the transaction. In
S addition, the large number of retailers on the Internet magnifies the
problem even more.
A related application, (Internal Docket Number AT9-99-574), addresses the
problem of
identifying the jurisdiction of a client that is accessing the e-commerce
retailer's web site in order
to know which proper jurisdictional laws to apply to the transaction. The
related application
discusses in detail the specifications of an Internet-based system that
attempts to track down the
location of the buyer in order to apply or provide warnings of jurisdictional
laws
Currently there is no system or method for a typical retailer selling over the
Internet to have
automated access to the jurisdictional laws of many different countries and
states for the purposes
of completing a sale.
Recently, special purpose web servers for many functions have started
appearing on the
Internet. Typically they are referred to as "vertical portals" as opposed to
general purpose
"horizontal portals" like Yahoo, Lycos, Excite etc. A vertical portal is an e-
commerce site that
specializes in a particular industry or set of interests. Some of these new e-
business models are as
simple as replacing paper catalogs with searchable databases, while others
offer auctions and
industry news. Vertical portals are a relatively new phenomenon, but Gartner
group, for example,
estimates that more than 300 have akeady sprouted and foresees as many as
100,000 by 2001.
Already, vertical portal conglomerates have formed. For example,
VerticalNet.com offers 30 sites
including paper, food services, biotechnology and automation, among others.
SUMMARY OF THE INVENTION
To solve the problem of the lack of jurisdictional information for a given
jurisdiction of a
given buyer within an e-commerce transaction, the system, method, and program
of this invention
utilizes a special purpose web database server which provides the needed
jurisdictional information
to web merchants. A vertical portal server is integrated with the rest of the
Internet for collecting
and applying jurisdictional laws to electronic transactions. A single
reference authority collects from
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governments and local authorities their tax rates and the pertinent local
laws. In a preferred
embodiment, the recognized national authority controls the jurisdictional
database wherein each
jurisdiction posts its laws and law changes to the national authority web
server. Alternatively, the
national authority database server services a request for information by going
to the appropriate
regional authority, i.e., state, jurisdictional database server which would
contain the appropriate
information for its own specific region.
E-commerce merchants who want to sell to someone in a particular jurisdiction
contact the
reference authority for the latest information. Hence the laws of the
jurisdiction are applied
automatically which further facilitates e-commerce transactions and keeps
transactions costs down.
The advantages of preferred embodiments of the invention are further
described. The
jurisdictional database server of the present invention eliminates the need
for each small e-business
retailer to create and maintain an extensive jurisdictional database. This is
a very significant
advantage considering the large number of countries in the world and the
varying number of separate
jurisdictions within each country where each jurisdiction would have
potentially a different law or
regulation pertaining to each of the many different aspects of an e-commerce
transaction. The
jurisdictional database server is able to keep the relevant information
current. For instance, if a
newly released book becomes banned in some jurisdictions or a tax rate is
changed, which may occur
frequently at any given jurisdiction within all of the jurisdictions, the
jurisdictional database server
can have the current information readily available to every e-commerce
retailer. The ability to keep
the jurisdictional information current is an important necessary aspect ofthe
invention. Furthermore,
the cost of the service is relatively low, as the jurisdictional server serves
many web servers all
around the world and recoups its fixed costs via volume sales.
BRIEF DESCRIPTION OF THE DRAWINGS
For a more complete understanding of the present invention and the advantages
thereof,
reference should be made to the following Detailed Description taken in
connection with the
accompanying drawings in which:
Fig. 1 shows a jurisdictional database portal server, in relationship to other
web servers on
the Internet, which has a repository of information specific to different
jurisdictions for the purposes
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of electronic transactions;
Fig. 2 shows an internal structure of the jurisdictional database portal
server with representative
samples of the types of information that the jurisdictional database portal
server stores; and
Fig. 3 shows a flowchart exhibiting control flow from buyer to e-commerce
server to database
server and back.
DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS
In the following description, reference is made to the accompanying drawings
which form
a part hereof, and which illustrate several embodiments of the present
invention. It is understood
that other embodiments may be utilized and structural and operational changes
may be made without
departing from the scope of the present invention.
Fig. l shows the jurisdictional database portal server 100 in relationship to
other web Servers
111, 112, 113 on the Internet. The database server 100 is a repository of
information specific to
different jurisdictions for the purposes of electronic transactions. The
jurisdictional data base server
100 collects information from each of the many jurisdictions. For example,
there would be an
e-commerce web server in France 111, Germany 112, and the USA 113 and in each
of the many
other jurisdictions; and likewise, an e-commerce client in France 121, Germany
123, and the USA
122, as well as clients or potential clients in all of the other
jurisdictions. Any given client 121-123
can connect to any web server 111-113 in any of a number of different ways 131-
133, 141-143,
151-153; but each client has access to, through any of the web servers, the
jurisdictional database
server 100 to receive the appropriate information.
Fig. 2 shows the internals of the jurisdictional database portal server. That
is to say, it shows
representative samples of the types of information that the jurisdictional
database portal server
stores. It can be seen that for each product that has a unique product key,
the jurisdictional database
server stores information pertaining to various kinds of taxes to be imposed
as per local laws, and
whether the product can be sold by e-commerce or not. The examples shown in
Fig. 2 are for
illustrative purposes only.
Other embodiments of the jurisdictional database server may include, but are
not limited to,
the following for each item or item identifier (e.g., the unique product
identifier): i) any legal
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restrictions to the sale; ii) national, local, value added, customs, and other
tax determinations
including values or percentages of the sale price; iii) information as to the
identity and location or
contact information for whom such taxes are to be sent; iv) hazardous material
shipment laws and
packaging procedures; v) return policies, licensing policies, warranty laws
and rights if governed by
a given jurisdiction; and vi) sample electronic sales contract for the
specified jurisdiction.
In addition, some of the above information may be stored in relation to the
jurisdiction itself
and not on a per item basis. Some of the pertinent jurisdiction information
that is needed for an
e-commerce transaction is independent of any specific product being sold, and
is applicable across
all products for a given jurisdiction.
The form or structure of the stored information can vary for different
embodiments. In a
preferred embodiment, the jurisdictional database server 100 is in the form of
a relational database
with SQL (Structured Query Language) type of queries being performed.
More specifically, with reference to Fig. 2, each product has a unique product
key, 201, 202.
Since each jurisdiction may refer to the same product differently due to
differences in languages, or
different manufacturers or distributors in different territories may name the
same product differently;
a unique product key is necessary to establish uniformity across all
jurisdictions for each product.
As such, each product in each jurisdiction is mapped to a unique product key
across all jurisdictions.
In the example shown in Fig. 2, the book "Mein Kamph" 203 is mapped to the
product key "1024".
Mapping products to a unique product key across all jurisdictions is a
convention that can be
established in any number of different ways. The generation of unique UPC
codes for products is
an example of just one of these ways. The generation of such a convention is
not uncommon. For
example, customs authorities all over the world have their customs blue book
listing various
products and the amount of taxes associated with each product.
The structure of the jurisdictional database may contain a primary
jurisdiction field 205 and
subjurisdiction levels 207, 209. Any number of subjurisdiction levels may be
necessary. For
example, to cover a primary jurisdiction such as the United States, there may
be 2 subjurisdiction
levels. A different level for each grouping of state 211, 214, and city 213,
215. For example, for
the United States jurisdiction 217 there can be a first subjurisdiction level
such as the state of Texas
211 and a second subjurisdiction level such as the city of Dallas, 213. For
each jurisdiction and any
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corresponding subjurisdictions there can be a corresponding value added tax
221, customs duty 223,
sales tax 225, or other associated information, such as whether or not such a
product can be sold.
For example, for product key 1024 (Mein Kamph), for the jurisdiction of
Germany 227, the value
added tax 221 and customs duty 223 and sales tax 225 are not applicable
because that particular
product can not be sold in that jurisdiction, column 204, Fig. 2. As a further
example, the
information associated with United States jurisdiction 217, Texas
subjurisdiction level one 211, and
Dallas subjurisdiction level two 213 indicates a 8.5% sales tax and 0% customs
duty since there
typically is no customs on single books coming into the United States. The
data contained within
the database as shown in Fig. 2 is used for illustration purposes and is not
intended to reflect true
data.
For a given customer having a given jurisdiction, for example if the web
client is coming
from Germany, and the web server is in the United States, the customs duty
will depend on the
product and not on the country from where it is imported. Due to international
agreements, the
customs duties are essentially the same regardless of which jurisdiction the
product is imported from.
1 S As such the customs duty 223 is based upon the product key 201 and the
receiving jurisdiction 205
and is independent of the locale of the web server of the seller where the
product is coming from.
For further examples, product code 3045 may be the unique key for American
Champaign. If the
buyer were located in France 228, the associated data for value added tax 221,
customs duty 223,
sales tax 225, or other associated information would indicate, either directly
or indirectly by showing
null or not applicable entries, that the particular product can not be sold to
a potential buyer in
France. Even within the United States, there may be a state jurisdiction that
does not allow interstate
sales of certain products such as perhaps alcoholic beverages in this example
(or firearms as another
example), as indicated by the data entries 222, 224, 226, for the level one
subjurisdiction indication
for Florida 220. Other information may be added as an applicable column in the
database such as
age requirements for buying alcohol or for buying other products such as
videos that may have a
certain rating such as "G", "PG 13", or "R".
For a given structure of the jurisdictional database 100, Fig. 1, as has been
shown and
described with reference to Fig. 2 for a preferred embodiment, the structure
can be replicated to each
web server 111, 112, 113, Fig. 1, in a number of ways. Standard techniques for
replication of
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databases can be used or each web server 11 l, 112, 113 can query the
jurisdictional database server
100 using a structured language such as the structured query language (SQL).
Fig. 3 is a flowchart exhibiting the control flow from an e-commerce client
(i.e., buyer) to
an e-commerce server (i.e., seller) to a jurisdictional database server and
back down to the
e-commerce client. Using the same example as was used with respect to Fig. 2,
an e-commerce
client in a given jurisdiction, such as Germany, makes a request to a server
in a different jurisdiction,
such as the USA, for a certain quantity of a specific product, such as
Champaign, for a certain price,
step 301. The e-commerce server maps the product to an unique product code.
Although the
mapping function may be burdensome, it is an important feature for minimizing
the complexity of
the system. The burden is manageable since each given web server only sells a
certain limited
number of products of an entity associated with or using the given web server.
For example, a given
web server may only sell in the range of 200 to 500 products.
After mapping the requested product to its product code, the requested e-
commerce web
server (e.g., USA) requests information from the jurisdictional database
server by sending to the
jurisdictional database server certain information concerning the requested
order such as the
jurisdiction of the requester (buyer) including, e.g., city, state, country,
postal code; and the product
code of the requested product, and perhaps the price, etc., step 302.
With reference to step 303, Fig. 3, the jurisdictional database server
references its database
and sends information back to the USA e-commerce server for an e-commerce
client in Germany.
If the USA e-commerce server sent the price to the jurisdictional database
server, then the
jurisdictional server calculates the value added tax at the appropriate
percentage amount and sends
the calculated amount back to the USA e-commerce server. Otherwise, the
jurisdictional server
sends the correct percentage amount back, and the USA e-commerce server
calculates the amount
of the tax. In addition, the jurisdictional database server sends any other
information to the USA
e-commerce server for further conveyance to the e-commerce client. Such
information may not be
part of the merchant's responsibility, or a requirement for completing the
transaction, but the
information would benefit the client in upholding the clients responsibilities
and duties with respect
to the transaction. For example, the jurisdictional database server may
include such information
relating to an amount to be paid by the client for customs duty in order to
retrieve the product. In
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addition, it may include information pertaining to warranty provisions or
disclaimers that are
required within a given jurisdiction.
With reference to step 304, Fig. 3, the USA e-commerce server concludes the
transaction
with the German e-commerce client by presenting the correct amount that
includes the applicable
taxes, along with giving the client a notice about other factors that the
client may be responsible for
with respect to the transaction, such as paying a customs duty to the
appropriate authority.
The preferred embodiments may be implemented as a method, system, or article
of
manufacture using standard programming and/or engineering techniques to
produce software,
firmware, hardware, or any combination thereof. The term "article of
manufacture" (or alternatively,
"computer program product") as used herein is intended to encompass program
code, and/or one or
more computer programs, and/or data files accessible from one or more computer-
readable devices,
carriers, or media, such as magnetic storage media, "floppy disk", CD-ROM, a
file server providing
access to the programs via a network transmission line, holographic unit,
etc., or any other signal
bearing media. Of course, those skilled in the art will recognize that many
modifications may be
made to this configuration without departing from the scope of the present
invention.
The foregoing description of the preferred embodiments of the invention has
been presented
for the purposes of illustration and description. It is not intended to be
exhaustive or to limit the
invention to the precise form disclosed. Many modification and variations are
possible in light of
the above teaching. For example, although preferred embodiments of the
invention have been
described in terms of the Internet, other network environments including but
not limited to wide area
networks, intranets, and dial up connectivity systems using any network
protocol that provides basic
data transfer mechanisms may be used.
It is intended that the scope of the invention be limited not by this detailed
description, but
rather by the claims appended hereto. The above specification, examples and
data provide a
complete description of the manufacture and use of the system, method, and
article of manufacture,
i.e., computer program product, of the invention. Since many embodiments of
the invention can be
made without departing from the spirit and scope of the invention, the
invention resides in the claims
hereinafter appended.
Having thus described the invention, what we claim as new and desire to secure
by Letters
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