Note: Descriptions are shown in the official language in which they were submitted.
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METHOD OF AND SYSTEM FOR DISTRIBUTING
AND REDEEMING ELECTRONIC COUPONS
BACKGROUND OF THE INVENTION
This invention relates to a method of and system for distributing and
redeeming
electronic coupons or "tokens" in a computer network environment and more
specifically
to a method and system for distributing, in advance of a request for
information for
which the "token" has relevance which may be redeemed.
With the rapid growth of computer networking and requests for information from
one computer to the next e.g. the Internet, it has become common practice for
a provider
of information ( a "Server") to provide each specific requester of information
(a
"Client"), with an electronic "token" (commonly referred to as a "Cookie") for
the
purpose of "recognizing" the client and/or providing some pre-determined and
pre-
programmed level of customization at the discretion of the information
provider.
Thus, in the prior art, the first time a client makes an electronic request
for
information from the server, the server delivers the requested information
and, in
addition, an electronic "token" or Cookie that allows the "server" to
recognize the
"client" and is able to customize the information provided in subsequent
requests. The
Cookie can also be used to identify a specific client or set of clients to
control access to
specific information or entry points of the server's private network.
In ordinary commerce, information providers such as newspapers and magazines
are used to attract or identify specific market segments of consumers in order
to permit
vendors to target consumers in those specific market segments with
advertising. This
frequently includes the use of coupons which may be redeemed by consumers for
discounts on product purchases and for other benefits. Typically, the source
of the
coupon is either the vendor's own product or publication or that of a
distributor or other
information provider associated with the vendor. One of the benefits of
coupons is that
they provide the vendor with some measure of the effectiveness of their
advertising by
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using coupons that are unique to each source of advertising. However, the
tracking of
paper coupons is a very time consuming and imprecise process.
With the advance of the Internet, consumers can download and print out coupons
from many online sources. Consumers can take these coupons to their local
store to
redeem them or return them to their source along with a proof of purchase in
order to
receive a refund by mail. These methods are both inconvenient and time
consuming for
the consumer. Currently, there is no effective way to distribute and redeem
coupons
online.
Accordingly, it is an object of this invention to provide an improved method
and
system for distributing and redeeming coupons in a network environment.
SUMMARY OF THE INVENTION
The invention is directed to a method of and system for distributing and
redeeming electronic coupons in a networked environment where the source of
the
coupons, the consumer and vendor are all connected to a common communications
channel. The consumer, via a client system, can connect to a source of the
coupons,
typically a server, which will transfer an electronic coupon or a "book" of
electronic
coupons to the client. These coupons are transferred in advance of the client
establishing a connection with the vendor's server in order to request
information or
obtain discounts on purchases of the vendors products or services. When the
client does
establish a connection with a vendor's server and initiates a transaction for
information,
goods or services, the vendor's server can recognize that the client bears a
coupon which
can modify the transaction and permit the client to redeem the coupon. The
coupon can
include an encrypted or encoded portion which would permit the server to
communicate
with another server such as an authentication server to authenticate and/or
validate the
coupon.
The system according to the present invention includes a first server system
having a computer processor and associated memory, a clearinghouse server
including a
computer processor and associated memory, the clearinghouse server being
adapted for
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transmitting an electronic coupon to the first server system over a network, a
second
server system including a computer processor and associated memory and a
client system
including a computer processor and associated memory, the client system being
selectively coupleable to the first and second server systems over the
network. Upon the
client system being coupled to the first server system, the first server
system transmits
the electronic coupon to the client system and upon the client system being
coupled to
the second server system for a purchase transaction, the second server system
retrieves
the coupon from the client system and modifies the purchase transaction based
on the
electronic coupon. The electronic coupon may include a cookie which includes
client
data that points the second server system to the clearinghouse server to
retrieve
electronic coupon data from the clearinghouse server, the coupon data
including terms of
the electronic coupon. The second server system may authenticate the
electronic coupon
based on information imbedded in the electronic coupon or based on the
electronic
coupon data retrieved from the clearinghouse server. The first and second
server
systems may be the same server, the first server system may be an advertising
server and
the second server system may be an e-tail server. The second server may be
reimbursed
for the redemption of the electronic coupon through the clearinghouse server.
In another embodiment, the system for distributing and redeeming electronic
coupons over a network includes a plurality of first server systems, each
including a
computer processor and associated memory, a clearinghouse server including a
computer
processor and associated memory, the clearinghouse server being adapted for
transmitting electronic coupons to each of the plurality of first server
systems over a
network, a plurality of second server systems, each including a computer
processor and
associated memory and a client system including a computer processor and
associated
memory, the client system being selectively coupleable to the plurality of
first server
systems and the plurality of second server systems over the network. Upon the
client
system being coupled to one of the plurality of first server systems, the one
of the
plurality of first server systems transmits at least one of the electronic
coupons to the
client system and, upon the client system being coupled to one of the
plurality of second
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server systems for a purchase transaction, the one of the plurality of second
server
systems retrieves at least one of the electronic coupons from the client
system and
modifies the purchase transaction accordingly.
In another embodiment, the system for distributing and redeeming electronic
coupons over a network includes a clearinghouse server including a computer
processor
and associated memory, a first server system including a computer processor
and
associated memory and being selectively coupleable to the clearinghouse
server, a
second server system including a computer processor and associated memory and
being
selectively coupleable to the clearinghouse server and a client system
including a
computer processor and associated memory, the client system being selectively
coupleable to the first and second server systems over the network. The
clearinghouse
server is adapted for transmitting frame-generating script to the first and
second server
systems over a network. Upon the client system being coupled to the first
server system,
the first server system transmits a cookie from a frame spawned by the frame-
generating
script to the client system, the cookie containing electronic coupon
information and upon
the client system being coupled to the second server system for a purchase
transaction, a
frame spawned by the frame-generating script retrieves the cookie from the
client system
and modifies the purchase transaction based on the electronic coupon
information
contained in the cookie.
The method according to the invention includes the steps of establishing a
connection between a clearinghouse server and a first server over a network,
transferring an electronic coupon from the clearinghouse server to the first
server,
establishing a connection between a client system and the first server over
the network,
transferring the electronic coupon from the first server to the client system,
establishing a
connection between the client system and a second server over the network, the
client
system initiating a purchase transaction with the second server, the second
server
recognizing the electronic coupon associated with the client system and the
second server
redeeming the electronic coupon and modifying the purchase transaction based
on
information contained in the electronic coupon. Prior to the redeeming step,
the second
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server establishes a connection with the clearinghouse server to authenticate
the
electronic coupon.
In another embodiment, the method of distributing and redeeming an electronic
coupon over a network includes the steps of establishing a connection between
a
clearinghouse server and a first server over a network, transferring a frame-
generating
script from the clearinghouse server to the.first server, establishing a
connection between
the clearinghouse server and a second server over the network and transferring
a frame-
generating script from the clearinghouse server to the second server. The
method further
includes the steps of establishing a connection between a client system and
the first
server over the network, transferring a cookie from a frame spawned by the
frame-
generating script in the first server to the client system, the cookie
containing electronic
coupon information, establishing a connection between the client system and
the second
server over the network for the purpose of executing a purchase transaction,
transferring
the cookie from the client system to the second server through a frame spawned
by the
frame-generating script in the second server and he second server modifying
the purchase
transaction based on the electronic coupon information contained in the
cookie. Prior to
the connection being established between the client system and the second
server, the
first server may transfer coupon information associated with the client system
to the
clearinghouse server for storage in memory of the clearinghouse server. Prior
to the
modification of the purchase transaction, the cookie may point the second
server to the
coupon information associated with the client system stored in the
clearinghouse server
memory, and the second server authenticates the electronic coupon based on the
coupon
information stored in the clearinghouse server memory. The method may further
include
the step of reimbursing the second server through the clearinghouse server.
BRIEF DESCRIPTION OF THE DRAWINGS
The foregoing and other objects of this invention, the various features
thereof, as
well as the invention itself, may be more fully understood from the following
description, when read together with the accompanying drawings in which:
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FIG. 1 is a diagrammatic view of a system for distributing and redeeming
electronic coupons in accordance with the present invention;
FIG. 2 is a flow diagram of a method of distributing and redeeming electronic
coupons in accordance with the present invention;
FIG. 3 is a diagrammatic view of another embodiment of the system of FIG. 1;
FIG. 4 is a diagrammatic view of the reimbursement procedure of one
embodiment of the system of FIG. 3; and
FIG. 5 is a diagrammatic view of the reimbursement procedure of another
embodiment of the system of FIG. 3. '
DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS
The present invention is directed to a method of and system for distributing
and
redeeming electronic coupons. An electronic coupon is essentially a token,
issued by or
under the authority of the issuer for the benefit of recipient. Typically, the
recipient
receives the electronic coupon and subsequently redeems it for the prescribed
benefit at
some later point in time. Preferably, the electronic coupon enables or
modifies an
anticipated transaction such as providing a discount in the price of goods or
services
provided by the issuer or the issuer's agent. In addition, the electronic
coupon can enable
or modify the level of access to privately held information or a server having
restricted
access. Alternatively, the electronic coupon can be used in transactions
between two
businesses, two government agencies or two governments wherein, for example,
the
businesses enter into an agreement relating to a transaction for goods or
services or
access to information, or the governmental bodies enter into an agreement
relating to
transactions regarding currency or information. Although the distribution of
electronic
coupons may be selectively tailored to particular users based upon the users'
demographics, shopping and spending habits, etc., a preferred embodiment of
the
invention distributes coupons to users independent of any known
characteristics of the
recipient.
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FIG. 1 shows a diagram of a system 100 for distributing and redeeming
electronic
coupons in accordance with a preferred embodiment of the present invention.
The
system 100 includes Client system 110, Server System A 120, Server System B
130, and
Server System C 140, all connected to a common communications channel 160.
Preferably, the Client system 110, Server System A 120, Server System B 130,
and
Server System C 140 can be a personal computer such as an IBM PC or IBM PC
compatible system or an APPLE MacINTOSH system or a more advanced computer
system such as an Alpha based computer system available from the Digital
Equipment
Corporation division of Compaq Computer Corporation or SPARC Station computer
system available from SLTN Microsystems Corp, although a main frame computer
system
can also be used. Preferably, the communications channel 160 is a TCP/IP based
network such as the Internet or an intranet, although almost any well known
LAN,
WAN, VPN technology can be used.
In one preferred embodiment of the invention, the Client system 110 is an IBM
PC compatible operating the Microsoft Windows 95 or 98 operating system and
Server
System A 120, Server System B 130, and Server System C 140 are configured as
Web
Servers providing access to information such as web pages in HTML format via
the
HyperText Transport Protocol (http). Server System A 120 is also conf gored to
generate cookies and to transfer the cookies to the Client System 110. The
Client system
110 includes software to allow viewing of web pages, commonly referred to as a
Web
Browser, such as Communicator available from Netscape Communications Corp. or
Internet Explorer available from Microsoft Corp. The Client system 110 is
capable of
accessing web pages located on Server System A 120 and Server System B 130.
Server
System C 140 is an authentication server which includes the software necessary
to
authenticate electronic coupons prior to their redemption.
In one preferred embodiment, Service System A 120 includes web server
software that is adapted to produce an electronic coupon or a book of
electronic coupons
that is transferred to the Client system 1 I O in the form of a Cookie that is
stored in
memory at the Client system. Preferably, the electronic coupon is a data
structure which
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can include any or all of the following information elements: data
representative of an
electronic coupon serial number or identification number, data representative
of a unique
key that can be used to validate or authenticate the coupon, data
representative of the
vendor that authorized the coupon and will redeem the coupon, data
representative of the
nature of the discount or access provided by the coupon, data representative
of the server
or entity that issued the coupon. In one preferred embodiment, the electronic
coupon can
be issued as part of an electronic coupon book. The coupon book can include
data
representative of a version number for the electronic coupon book and data
representative
of a serial number or identification number for the electronic coupon book.
In one preferred embodiment, the electronic coupon contains all the
information
necessary to redeem the coupon. Specifically, the electronic coupon identifies
the
grantor (i.e. the party or vendor that will redeem the electronic coupon), the
nature of the
discount or benefit provided and a unique serial number or other data
structure that
permits the electronic coupon to be authenticated or validated. Thus, a server
redeeming
this type of electronic coupon can obtain
all the information necessary to redeem from the electronic coupon. The server
can even
include the software necessary to authenticate or validate the electronic
coupon.
In an alternative embodiment, the electronic coupon book includes a unique
serial
number or identification number and a data structure useful for authenticating
or
validating the electronic coupon book. The actual content of the electronic
coupon book
can be determined, for example, by visiting a website which reads the coupon
book serial
number and provides the user with listing of the coupons available. A benefit
to this
configuration is the organization that issues the electronic coupon book can
add vendors
even after the electronic coupon book has been issued. Thus, if a vendor signs
up with
the organization that issues electronic coupon books after a particular coupon
book has
been issued to a client, the vendor can be added to the electronic coupon book
at a later
date. In order to redeem this type of electronic coupon, the server that
intends to redeem
the electronic coupon must connect to an authentication server which will
authenticate or
validate the coupon book and indicate the nature of the benefit of the
electronic coupon
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to the server requesting authenticationlvalidation. Another benefit of this
configuration
is that the coupons are relatively tamper proof, due to the authentication and
validation
facilities. In many prior art systems, coupons could be copied and/or altered
by the user
with relative ease; in the absence of validationlauthentication schemes, few
reliable
methods for detection of such counterfeits exist.
In another embodiment, all of the information embodied in the coupon (i.e.,
nature of benefit, authentication data, grantor data, valid vendors, etc.) may
reside on a
separate "clearing house"server, such that the Cookie held by the Client
system 110
merely conveys identifying information relating to the Client that points to
the coupon on
the clearing house server. In this embodiment, a Client "receiving" a coupon
results in a
modification of the clearing house server database rather than a modification
of data on
the Client system; i.e., the Client system never physically receives the
coupon. This
embodiment requires communication between the server issuing the coupon and
the
clearinghouse server, via Internet, conventional telephone line or other
suitable
communications channel. Likewise, when the coupon is to be redeemed by the
Client
system 110, the redeeming server must establish a link to the clearinghouse
server for
identification, validation and authentication. In an alternate embodiment, the
coupon or
coupons residing on the clearinghouse server may be provided to a printing
device
peripheral to the clearinghouse server, such that hard-copy versions of the
coupons may
be mailed, sent via facsimile, or otherwise delivered to the Client system
110.
Figure 2 shows a flow chart 200 of a method of distributing and redeeming
coupons in accordance with one preferred embodiment of the invention. In a
preliminary
step 210, the client system requests information from Server A. In the next
step 212,
Server A makes a promotion request to a promotion server. The promotion server
then
transfers an electronic promotion coupon to Server A, step 214. Server A then
transfers
the requested information along with the electronic coupon to the Client
system, step
216. The Client system stores the electronic coupon in memory. In the next
step 218,
the Client system initiates a transaction or again requests information from a
Server. The
Server could be Server A or another server. At this point, depending upon the
system,
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the Server could detect the presence of the electronic coupon on the Client
system or the
Client system could present the electronic coupon for redemption, step 219. In
the next
step 220, the Server authenticates the electronic coupon. Depending upon the
system,
the Server could evaluate the electronic coupon to authenticate or validate
the electronic
coupon, or preferably, the Server could transfer the electronic coupon
information to a
clearinghouse server which could authenticate or validate the electronic
coupon and
authorize the transaction. In the next step 222, the electronic coupon is used
to modify or
enable the transaction and the transaction is completed. Finally, the server
is reimbursed
for the value of the coupon through the clearinghouse server, step 224. In
this
embodiment, the promotional server and the clearinghouse server could be
different
servers or, preferably, the same server.
As one of ordinary skill will appreciate, it will not always be necessary for
the
Client system to request information from Server A. All that is necessary is
for Server A
to establish a connection with the Client system in order to transfer the
electronic coupon
to the Client system. One method of transferring the electronic coupon is to
include the
electronic coupon with the information requested. Alternatively, the
electronic coupon
can be transferred to the Client system by any method of transferring
information.
In a preferred embodiment of the invention, the Client system is a personal
computer running browser software which connects to web servers via the
Internet or a
similar network. Preferably, a book of electronic coupons is transferred to
the Client
system in the form of a Cookie which is stored in memory at the Client system.
The
Cookie can be detected by any subsequent web server to which the Client system
connects. If the Client system attempts to initiate a transaction with a
particular web
server, the web server detects the Cookie which includes electronic coupon and
uses the
electronic coupon to enable or modify the transaction. In this embodiment,
when the
Client system receives the electronic coupon, the user can be alerted to the
presence of
the electronic coupon by another browser window or a Java based window that
identifies
all the electronic coupons in the electronic coupon book, the nature of the
benefit
provided and provides links to the various web sites where the electronic
coupons can be
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redeemed. Alternatively, the Client system can connect to a web server which
displays
the contents of the electronic coupon book in the form of a web page which
describes the
nature of the electronic coupon benefit and a link to the web page where the
electronic
coupon can be redeemed. In yet another embodiment of the invention, when the
Client
system receives the electronic coupon or coupon book, the Client system may be
programmed to automatically provide the electronic coupon or coupon book to a
peripheral printing device such that the User has automatic access to hard-
copy versions
of the coupons.
As one having ordinary skill in the art will appreciate, the use of the client
system
will typically be operated or otherwise controlled by a consumer or a customer
(in
business to business transactions) and the server system or systems will be
operated or
otherwise controlled by an organization or an agent of an organization
authorized to enter
into and complete the transaction. In addition, as one having ordinary skill
will
appreciate the entire process and system can be automated, for example whereby
a client
system is programmed to periodically visit websites (whether or not known to
the source
of electronic coupons) or the originating server can be programmed to
periodically
distribute electronic coupons, such as by electronic mail, and the redeeming
server can be
programmed to automatically redeem the electronic coupon as part of an
automated
request to initiate a transaction received from an automated client system.
One of
ordinary skill in the art will also appreciate that the electronic coupons can
include an
expiration date or a window of dates when the electronic coupon is valid or
effective.
In another embodiment of the invention, Cookies are transferred to, or
retrieved
from, a client system by a frame spawned within a primary website by
JavaScript or
other similar software code. This embodiment is compatible with security
features
included with some web browsers that limit a website to depositing and
retrieving
Cookies only for itself. For example, a user visiting a highly trafficked
website generally
receives a Cookie from that site, but a user cannot receive a cookie from a
site on behalf
of another site. This is because a Cookie deposited by a particular website is
encoded
with a signature corresponding to that website, and the browser utilizes that
signature to
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limit Cookie transfers to only the website that created the Cookie. However, a
frame
spawned within the highly trafficked website can deposit a Coolcie on the
Client system,
and a similar frame spawned within another website can subsequently read that
Cookie,
as long as the frames spawned on different websites look the same (i.e., have
the same
signature) to the browser running on the Client system. As with the other
embodiments
described herein, the Cookie may contain all of the necessary the coupon
information,
including the complete coupon data structure necessary for benefits
identification,
validation and authentication, or the Cookie may contain only data identifying
the Client,
so that the Cookie functions as a pointer to a database on a coupon
clearinghouse server.
If the Cookie contains the complete data structure, the script will include
the code
necessary to authenticate and validate the coupon. The utility of this
embodiment lies in
the fact that the issuer and the redeemer of the coupon need not be the same
entity. For
example, a producer of goods may desire to have coupons distributed to
potential
purchasers, but may not desire to conduct the electronic commerce necessary to
redeem
the coupons. In this case, the producer of goods would distribute the
JavaScript (or other
similar script) for generating coupon-distributing website frames to highly
trafficked
websites. The producer of goods would also provide the frame-generating script
to
point-of sale product retailers so that the coupons could be redeemed where
the product
is sold. In other embodiments of the invention, the highly trafficked
advertising website
and the point of sale, redeeming website may be the same website. In other
embodiments, the website from which the user acquires coupons or coupon
pointer
information may include the clearinghouse system directly, i.e., the user need
not visit a
website separate from the clearinghouse.
The preceding embodiment of the invention may be implemented by a single
service provider such as the entity responsible for the coupon clearinghouse
server 150.
In this scenario, illustrated in FIG. 3, the producer of goods 250 authorizes
252 the
clearinghouse 150 to generate and distribute electronic coupons related to the
relevant
goods. The clearinghouse 150 produces and distributes the necessary frame-
generating
script 254 to the highly trafficked websites (i.e., the advertising websites)
and to the point
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of sale websites (the coupon redeeming websites). A user operating a Client
system 110
initiates a connection 302 to the one of the advertising websites (Server A
120) and
receives a Cookie 304 from the frame 306 spawned by the script. If the coupon
is to be
stored on a clearinghouse database, the advertising website establishes a
connection 308
to the clearinghouse 150 to store coupon information associated with the
Client 110 into
the clearinghouse coupon database 310. In a preferred 'embodiment of the
invention, the
aforementioned distribution of coupons is not dependent upon any
characteristics of the
Client 110 (e.g., demographics, purchasing habits etc.), although other
embodiments may
utilize such information to selectively distribute particular coupons to
specific Clients.
The user subsequently initiates a connection 312 to one of the coupon
redeeming
websites (Server B 130), and the frame 314 spawned by the resident script
retrieves the
Cookie that contains either the complete coupon data structure or the Client
data that
points to the clearinghouse database. If the coupon has been stored on the
clearinghouse
database 3I0, the redeeming website 130 establishes a communications Link 3I6
to the
clearinghouse 150 and retrieves coupon information associated with the Client
110. The
redeeming website 130 then authenticates the coupon, either internally based
on the
information embedded in the coupon, or via the comlection 316 to the
clearinghouse 150.
The redeeming website I30 then modifies the transaction with the Client 110 by
an
amount defined by the coupon. As with conventional paper-based coupons, the
redeeming entity (corresponding to the redeeming website 130) is reimbursed
for the
amount of the transaction modification in addition to a processing fee. The
redeeming
entity 130 may receive the reimbursement and fee from the producer of goods
250
directly, or from the clearinghouse 150. In the former case (shown in FIG. 4),
upon
notification 330 of tl2e transaction from the redeeming entity 130, the
redeeming entity
receives the reimbursement and fee 332 from the producer of goods 250, and the
clearinghouse 150 receives a fee 334 from the producer of goods 250 for each
coupon
redeemed. In the latter case (shown in FIG. 5), upon notification from the
redeeming
entity 130, the redeeming entity 130 receives the reimbursement and fee 332a
from the
clearinghouse, the clearinghouse notifies the producer of goods of the
transaction, and
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the producer of goods reimburses the clearinghouse for the amount of the
modification
and
the fee 332b that the clearinghouse paid to the redeeming entity, in addition
to a
providing a fee 334 to the clearinghouse for the redeemed coupon.
The invention may be embodied in other specific forms without departing from
the spirit or essential characteristics thereof. The present embodiments are
therefore to
be considered in respects as illustrative and not restrictive, the scope of
the invention
being indicated by the appended claims rather than by the foregoing
description, and all
changes which come within the meaning and range of the equivalency of the
claims are
therefore intended to be embraced therein.
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