WO2000072215A1

WO2000072215A1 - Method and system for conducting an on-line auction of certificates of deposit

Info

Publication number: WO2000072215A1
Application number: PCT/US2000/014447
Authority: WO
Inventors: Kenneth Tepper
Original assignee: Kenneth Tepper
Priority date: 1999-05-25
Filing date: 2000-05-25
Publication date: 2000-11-30
Also published as: AU5290600A

Abstract

An apparatus (10, 12, 14, 15) for managing an auction for a certificate of deposit comprising a control unit (24, 32) for posting a certificate of deposit request generated by a user, graphical means (14) for assisting in formulating a bid on said certificates of deposit, means for posting the bid (14) and means for receiving bids from others who desire to bid on the certificates of deposit (14).

Description

METHOD AND SYSTEM FOR CONDUCTING AN

ON-LINE AUCTION OF CERTIFICATES OF DEPOSIT

Field of the Invention

The present invention is directed to online computer systems. In particular, the present invention is specifically directed to online computer systems which can be used to handle an auction of certificates of deposit over a worldwide computer network such as the Internet.

Background of the Invention The Internet or World Wide Web is one of the most critical technological developments of the 1990's. The Internet has provided vast economic opportunities for numerous businesses and industries to vastly expand the number and quality of their services. One of the earliest and fastest emerging areas of Internet activity has been in providing rapid, up-to-the-minute business information. To date, a number of patents have issued on Internet related systems which cover a wide array of business information and electronic commerce (e-commerce) applications.

Heretofore, a number of Internet systems have been applied to on-line auctions for experts and other applications. U.S. Pat. No. 5,862,223 to Walker discloses an expert matching method and apparatus for matching communications between an expert having particular qualifications and an end user seeking a solution to an expert request. In a preferred embodiment, the apparatus includes a controller having a database for storing expert qualifications.

In one embodiment, the controller receives an expert request. The search program identifies experts qualified to respond to the expert request. The expert request is then transmitted to the experts which result in an expert answer transmitted to and received by the central controller. After authentication of the expert answer, using a wide range of security levels from passwords to cryptography, the answer is forwarded to the end user. U.S. Pat. No. 5,835,896 discloses a system and method for conducting a multi- person interactive ad auction in a variety of formats without using a human auctioneer to conduct the auction. This system is preferably implemented in software and allows a group of bidders to interactively place bids over computer and communications network. Those bids are recorded by the system and bidders are updated with current auction status information. When appropriate, the system closes the auction from further bidding and notifies the winning bidders and losers as to the auction outcome.

Electronic auctions held over the Internet using electronic mail (e-mail) have thus provided an important innovation. A recent innovation applied to e-mail auctions is the use f the Internet's worldwide web to post descriptions of the merchandise and to show the current high bids. Security brokerage firms for years have used automated transaction systems for matching buy and sell orders for securities. For example, the New York Stock Exchange's DOTS (Direct Order Transmission System) and NASDAQ SOES (Small Order Execution System) systems offer complete electronic matching of buyers and sellers. Electronic auctions held over the Internet using electronic mail ~e-mail) are often preferable to more traditional auctions. In e-mail auctions, an auction catalog is electronically mailed to people interested in bidding. Subsequently, bidders submit their bids on individual lots to an auctioneer via e-mail. The auctioneer reads the electronic mail bids and enters them in a database of bids. When the auction closes, the auctioneer notifies the winning bidders, usually via electronic mail, and ships the merchandise to the winning bidders.

A recent innovation applied to e-mail auctions is the use of the Internet's World Wide Web (www) facility to post descriptions of the merchandise and show the current high bids. This innovation provides the advantage of eliminating the need to electronically mail bidding updates to bidders. And since worldwide traffic is much higher priority on the Internet, bidders suffer less of a time lag in seeing updated web pages. Sales firms other than auction houses have also used the Internet's World Wide

Web facility to post descriptions of their merchandise and to offer the merchandise for sale at a set price. These systems are automated and are capable of accepting an order from a customer by having that customer fill out an on-line order form. This order information is taken by the system and placed into an order database or accounting system which then processes the order.

A number of issued U.S. patents have issued relating to various forms of electronic commerce. These patents fall into three broad categories: (1) patents relating to on-line networks; (2) patents relating to electronic commerce over on-line networks; and (3) patents relating to various forms of securities trading via electronic means. U.S. Pat. No. 5,406,475 entitled "Data Processing Network Having a Plurality of Independent Scribers", U.S. Pat. No. 5,235,680 entitled "Apparatus and Method for Communicating Textural and Image Information between a Host Computer and a Remote Display Terminal", and U.S.Pat. No. 5,310,997 entitled "Automated Order and Delivery System" are representative of the prior art.

A second group of patents relating to electronic commerce, U.S. Pat. No. 5,285,383 entitled "Method for Carrying Out Transactions Using Electronic Title" and U.S. Pat. No. 5,297,031 entitled "Method and Apparatus for Order Management and Market Brokers," describe various means for conducting transactions over electronic communications networks. U.S. Pat. No. 4,789,928 discloses a means for soliciting bids over an electronic network from bidders that are remote to the site of a live auction.

The third group of patents relates to electronic commerce, patents relating to securities trading. U.S. Pat. No. 4,412,287 entitled "Automatic Stock Exchange", for example, discloses means for prospective buyers to post offers to buy a given security at a specific price and for prospective sellers to post offers to sell a given security at a specific price.

To date, there has not been a system for auctioning financial instruments such as certificates of deposit over a worldwide computer network such as the Internet.

It is therefore a principal object of the present invention to provide a networked computer system whereby certificates of deposit may be auctioned.

It is a further object of the present invention to provide a system in which users subscribers access the system via the Internet or World Wide Web and be provided with a user interface which assists them in formulating bids.

These and other objects of the present invention and features of the present invention will become apparent from the detailed description and from the following summary detailed description and claims. Summary of the invention

The embodiment of the present is an apparatus for managing an auction for a certificate of deposit comprising a control unit for posting a certificate of deposit request generated by a user, graphical means for assisting in formulating a bid on said certificates of deposit, means for posting the bid, and means for receiving bids from others who desire to bid on the certificates of deposit. In a further embodiment, a method for electronically managing an auction for a certificate of deposit, comprising the steps of providing a control unit for placing a certificate of deposit to be auctioned, providing an interface to a first end user to the system to formulate a bid for the certificate of deposit, posting the bid of the end user, and providing an interface to a second end user to the system to formulate a second bid for the certificate of deposit.

Detailed Description of the Figures Figure 1 is block diagram of the present invention. Figure 2 is a more detailed block diagram of the present invention. Figure 3 is a block diagram of the administrative work station of the present invention.

Figure 3A is a block diagram of the database server and subsystem of the present invention.

Figures 4 and 5 illustrate a system for conducting an on-line auction of certificates of deposit.

Detailed Description of the Preferred Embodiment The present invention is directed to a system for controlling an on-line auction of certificates of deposit and other financial instruments over communication networks using for example, personal computers. In particular, the present invention is designed to coordinate an auction of certificates of deposit and other instruments over a computer network.

Over the past fifteen (15) years, personal computers have become relatively powerful and inexpensive and have gained widespread use in a significant number of homes and businesses. With a modem, personal computers can communicate with other computers through communication networks and access many resources on the so-called "Information Super Highway." Companies such as America Online, CompuServe, and Prodigy, which traditionally provided so-called "content" over proprietary networks, have begun to provide access by personal computer users to an expansive international network of networks known as the Internet.

As is well known by those skilled in the art, the World Wide Web is a graphical sub-network of the Internet. With common "Web Browser" software such as Mosaic, NetScape Navigator, or Microsoft Explorer, end users may easily access Internet information and services on the World Wide Web. A web browser handles the functions of locating and targeting information on the Internet and displaying information provided by the Web Server. The World Wide Web utilizes technology called "Hyper-Text" to organize, search and present information on the Internet. Using a browser, the end user can select a word ("Hyper-Text word") from a view document and be linked to another document featuring information related to the word.

Referring to the attached Figures, and in the context of the above operational environment, the present invention is now more fully described. As shown in Figure 1 , the present invention is broadly directed to a system for coordinating an auction involving sale of certificates of deposit. The present invention is designed, in one embodiment, to be utilized on the World Wide Web or Internet, although the present invention is equally applicable to other network environments.

As shown, the invention initially comprises a central server 10, local hub server 12 and a plurality of end user work stations 14. In one embodiment, the end users 14 may comprise individuals who desire to bid on certificates of deposit. A transport medium 15, in one embodiment using Internet Protocols (IP), interfaces the end users 14 to the local hub 12 and central server 10.

The end user workstations 14 can comprise any device that connects to the system via the Internet or other IP transport methods and includes, but is not limited to, such devices as televisions, computers, hand-held electronic devices, wireless electronic devices, or any other device that uses IP's and uses a transport medium. Non-limiting examples of an acceptable transport medium 15 for use in the present invention includes any link such as an ATM link, FIDDI link, satellite link, cable, twisted pair, fiber-optic, broadcast wireless network, the Internet, the World Wide Web, Local Area Network (LAN), Wide Area Network (WAN), or intranet environment such as an Ethernet link. In such alternative cases, the end user workstations 14 communicate with the central and local servers 12, 14 using protocols appropriate for the network to which that client is attached. All such embodiments and equivalents thereof are intended to be within the scope of the present invention.

Thus, it can be seen from the preferred embodiment of Figure 1 , that the system as a whole is comprised of a number of inter-connected end user devices 14 that communicate with the central server 10 and local server 12 through a transport medium15 preferably using an appropriate protocol. In the simplest embodiment, end users 14 participate in an auction run from the central server 10. The local server 12 may handle billing or other local functions and will update the central server 10 with new or revised information.

Referring to Figure 2, a detailed block diagram of a preferred embodiment of the present invention is shown. As shown, the central server 10 includes two primary servers, Web Server 20 and Database Server 22. The Database Server 22, in one embodiment, may utilize "SQL Server" database management software from Microsoft Corporation. The Database Server 22 couples to a Database Subsystem 30 to be described in greater detail below. The Web Server 20 includes a Web Subsystem 26 which connects to a Web Browser 28 situated in the end user stations 14. Internet Information Server 200 (IIS) by Microsoft Corporation is an exemplary Web Server 20 software package for use in the present invention. The Web Server's 20 operating system may comprise the Windows NT 4.0 Server. IIS includes a high performance web server, an application development environment, integrated full-text searching, multimedia streaming, and site management tools. IIS also includes support for HTTP byte-range browsers to begin receiving data from any part of a file for enhanced performance. In a preferred embodiment, the Web Server 20 will preferably be configured with a Pentium Pro(P6) 200 Megahertz (MHZ) central processing unit (CPU), up to 256 MB of ECC RAM, a graphics adapter capable of displaying 1024x768 pixels with a depth of 8 bits, a 15 inch monitor, a PCI Fast/Wide SCSI-2 1/0 adapter, one PCI 1Obase2 Ethernet adapter and one PCI 1 OObaseT Ethernet adapter, a keyboard and a mouse.

The central server 10 also preferably includes an Administrator Workstation 24 that provides administrative capabilities for the entire system. The Administrator Workstation 24 permits administrators or other operators of the system to perform routine operations to effect the system. Such operations may include, but are not limited to adding, deleting or editing records, printing reports, updating records, performing backups, and maintaining the programs that comprise the system. The Administrative Workstation 24 is able to communicate directly with the Web Server 20 and the Database Server 22. The Web Server 20 sends retrieval or post event information as HTML (Hyper-Text Mark-up Language) through the Web Subsystem 26 to a Web Browser 28 software program based within the end user workstations 14 responsive database queries input by the end users 14. The Database Server 22 operates in concert with the Web Server 20 and maintains all the end users' account information, profile financial records, and other associated transaction data as well as all interactions with the Web Server 20.

The Web Subsystem 26 performs all interactions with the Web Browser 28 in the end user device 14, and serves as the end user interface to the system. The HTML, which is viewed by the end user as search results, is generated by the Web Subsystem 26 and delivered to the end user device 14 upon demand in response to actions, namely queries in part, by the end users 14. One feature of the present invention may be the provision of customized web browser frame pages. Each frame page can be set up to a particular end user 14 and may incorporate business information relating to the local server 12 or other entity. The present invention may further incorporate banner advertisements and the like.

While the present invention is described, in one embodiment, in the context of

HTML format, it will be recognized by those with skill in the art that non-HTML page mark-up languages or evolved future versions of the HTML can be used in accordance with the present invention, thereby eliminating the requirement for end users 14 to purchase special custom software applications.

All of the systems described above preferably communicate via an Ethernet

100BaseT network and a Switching Hub. In addition, a second, isolated, network segment may exist between the Web Server 20 and the external communications hardware (Internet router), which keeps external traffic isolated from the internal network, as well as providing a dedicated connection between the Web Server 20 and the Internet for maximum throughput.

As noted above, Web Server 20 is the point of entry to the system. It determines the identify of the end user 14 and makes appropriate decisions in response to queries from the end user 14. The Web Server 20 sends HTML based credit or debtor records to the end user workstation 14, validates end user passwords, sends logging and transaction information to the Database Server 22, and performs logical operations, thereby also behaving as a transactional server. The operators and managers of the system may selectively create and delete user-related information by utilizing the Administration Subsystem 32 housed in

Administration Workstation 24. Billing Subsystem 36 is responsible for system billing, and may reside at the local server 12 or Web Server 20 of the central server 10.

2₅₅449 J O The Database Subsystem 30 resides in the Database Server 22. Communication and Billing Subsystems 39,36, respectively, execute essential services for other parts of the system, and have well defined application program interfaces (API). The system is preferably protected for the Internet by a firewall 37. Referring now to Figure 3, the Administration Subsystem 32 is shown in greater detail. Administration Subsystem 32 provides an interface for operators and managers of the system to modify at the Database Subsystem 30, print reports, view system data, and log user comments and complaints. The Administration Subsystem 32 provides a collection 35 of access forms, queries, reports, and modules to implement the administration interface. The Administration Subsystem 32 interacts with Communications 39, Database 30, and Billing 36 Subsystems.

Referring to Figure 3A, the Database Subsystem 30 stores all information pertaining to client accounts, administrator accounts, as well as the stored documents, e-mail and calendars 45. All interactions with the Database Subsystem 30 are performed through a Database API 40, which defines the interface to the library of stored credit data files. These are used to implement high-level database functions and to shield the details of the database implementation from the other subsystems. The Database Subsystem 30 is preferably implemented using the Database Server 22, and will be backed up on a regular basis 47. Communications Subsystem 39 interfaces to a Comm API 44 and functions to transmit credit data and events to end users 14. The Billing Subsystem 36 is used for billing and communicates through the Billing API 42 to the Administration Subsystem 32. As noted above, billing can be accommodated in the present invention at the local server 12.

Database Server 22 implements the Database Subsystem 30 of the present invention. Through the Database Subsystem 30, the Database Server 22 logs client setup and account creation information, stores credit event information and files, maintains account balances, produces and prints reports, hosts backup operations, and performs statistical calculations for the entire system. The Database Server 22 preferably uses an operating system such as the Windows NT 4.0 operating system and the Windows NT SQL Server 6.5. The Database Server 22 is preferably a dual processor computer and includes a processor such as the Pentium Pro microprocessor, and is preferably optimized specifically for the Windows NT threading model. Each connection to the Database Subsystem 22 may be handled by a separate thread within the Database Server 22. Database Server 22 may require additional processors in high volume environments. The dual processor machine of the preferred embodiment is sufficient for the type and number of transactions that it will be performing. It is to be noted that the Database Server 22 can be "striped" to two or more machines to distribute the server load.

As noted above, in the preferred embodiment, at least one Administration Workstation 24 is provided for administering the system. It is to be appreciated that additional operator workstations 24 may be added with extra computer systems, installing the administration software and connecting them to the LAN.

The operation of the present invention is now described with reference to the Figures and most particularly, Figures 4 and 5. Initially, the central administrator will place a prospective certificate of deposit to be auctioned with an initial rate and end users 10 will enter the site and fill out a registration form as shown in Figure 4. End users 10 will provide a password which will be stored and which will gain access to the system. The administrator will then place an initial starting offer. Registered end users 10 who then desire to bid on the certificate of deposit will then place bids by decreasing by 1 /10% the amount of interest that they are prepared to accept for the certificate of deposit. The end user 10 will type in his bid and then hit the go button 60. The amount of decrease may be larger than 1/10% increments. The bidder who has the lowest bid at the time the auction closes will be notified, for example, by electronic mail..

Thus, if the initial set bid is 10%, individual end users who can then access the site, can then offer 9.999% to take the certificate of deposit. As shown in Figure 5, end user 10 has bid 9.169% against the current bid of 9.170%. At a certain pre-set time, the auction closes, as determined by the administrator 24. The time period may be set to close at a particular time of day (e.g., noon each day) or after a certain period of time (e.g., twelve hours) have elapsed. The lowest bidder, i.e., the bidder with the lowest bid rate, is awarded the certificate of deposit. The end user 10 can then purchase the certificates of deposit at a desired denomination, such as $500, $1 ,000, $5,000 or $10,000. In this way, bidders of varying economic and financial means may participate equally.

If the bidder withdraws or refuses to purchase the certificate then goes to the next highest bidder who may be offered the certificate at the winning price. As an alternative or in conjunction with the above, additional certificates of deposit can be offered to additional losing bidders at the winning rate. These bidders, may, for example, comprise the five losing bidders who come closest to the winning bid.

The present invention thus provides a system by which certificates of deposit can be offered to members of the general public who bid on them at specific interest rates. The present invention has been described with reference to the enclosed figures. It is to be appreciated that other embodiments fulfill the spirit and scope of the present invention and that the true nature and scope of the present invention is to be determined with reference to the claims appended hereto.

Claims

1. An apparatus for managing an auction for a certificate of deposit comprising: a control unit for posting a certificate of deposit request generated by a user; graphical means for assisting in formulating a bid on said certificates of deposit; means for posting the bid; and means for receiving bids from others who desire to bid on the certificates of deposit.

2. A method for electronically managing an auction for a certificate of deposit, comprising the steps of: providing a control unit for placing a certificate of deposit to be auctioned; providing an interface to a first end user to the system to formulate a bid for the certificate of deposit; posting the bid of the end user; and providing an interface to a second end user to the system to formulate a second bid for the certificate of deposit.