CA1159920A - Method and apparatus for securing data transmissions - Google Patents

Abstract

Abstract of the Disclosure A method and apparatus are provided for improving the security of data transmissions between stations and for control-ling secured transactions from remote locations in a data-transfer system. The method and apparatus obviate the need for transmitting user-identification information such as personal identification number (PIN) from station to station, e.g., from the station utilized by the user to enter his PIN and initiate a transaction, to the station that processes the transaction. Also, for added security, the method and apparatus provide for encryption (encoding) and decryption (decoding) of data during a transaction using en-cryption and decryption keys produced from different (independent) PIN's. The apparatus includes at least one irreversible algorithm module, a random number generator and at least one data file (e.g., disc or magnetic tape storage). The apparatus also includes a comparator or, alternatively, an encoding algorithm module and a matching decoding algorithm module. In addition, a data-transfer system obviates the need for paired encryption/decryption modules on a data link while nevertheless maintaining a high level of security in the data transferred. This facilitates remote control of data transfers between locations within the system, enables use of conventional data links, and permits convenient changes of and additions to the files of stored codes for the system without compromising the security of data transfers or of identifying codes for authorized individuals.

Description

IMPROVED METHOD AND APPARATUS
FOR SECURING DATA TRANSMISSIONS

Background of the Invention Numerous methods and apparatus have been developed for transmitting messages in a secure manner between stations. Many of the methods and apparatus provide for coding of the message prior to transmission and for decoding of the message at its destination subsequent to transmission. Two such methods and apparatus are described, for example, in U. S. Patent No.
3,711,645 issued January 16, 1973, ~o Kurt Ehrat, entitled Method ,~ And Apparatus For Coding Messages, and in U. S. Patent No.
3,956,615 issued May 11, 1976, to Thomas G. Anderson, William A.
Boothroyd and Richard C. Frey, entitled Transaction Execution System With Secure Data Storage And Communications, A third method and apparatus is described, for example, in U. S. Patent No. 3,938,091 issued February 10, 1976, to Martin M. Atalla, entitled Personal Verification System.
A common feature of such apparatus is the use of fixed, predetermined encoding-decoding keys to encode and decode data, or the use of variable encoding keys transmitted with the encoded message to a destination station for processing (the variable -d~

1 1599~0 encoding keys being supplied by the user, or generated by the apparatus from user-supplied information). At the destination station, the transmitted variable-key is utilized by a decoder of the apparatus to decode the encoded message.
Whereas the use of variable rather than fixed encoding-decoding keys would seem to provide a greater measure of security in message transmission than do fixed keys ~especially variable keys supplied by a user or generate~ by the apparatus from user-supplied information), the practice of transmitting a variable key so that it can be used in the decoding process reduces the security of the operation because unauthorized users could con-ceivably gain access to the key during the transmission of the key, It would be desirable, therefore, in improving the security of such data transmission operations (especially bank transaction operations or the like which require not only secure transmission of data but also accurate identification of users) to use a technique which provides for secure transmission of data without requiring transmission of matching encoding-decoding keys or of user-identification information. Also, it would be desirable in certain applications to obviate the need for dedicated pairs of matched encoders/decoders in order to enhance the flexibility of the data-transfer system and to reduce the start-up and chanae-over time inherent in placing conventional paired modules in the proper locations. In addition, it would be desirable to encrypt messages between specific persons or entities via an intermediate or central station which can function in a manner similar to a data switch that ties numerous entities together.
Summary of the Invention In accordance with the illustrated preferred embodiment of the present invention, a method and apparatus are provided for improving security of data transmission between stations by making it unnecessary to transmit user-identification information between the stations. Also, to further improve security, an alternative method provides for encoding and decoding the data during each transaction, using encoding and decoding ke~s pro-duced from different PIN~s(Personal Identification Number entered into the apparatus by a user to initiate a transaction such as a bank deposit or withdrawal transactlon). The apparatus includes at least one irreversible algorithm module, a random number generator, and at least onè data file. The composite system embodiment of the present invention enables encoded data to be transferred by conventional data transmission means such as mail, voice transmission via telephone, radio, and the like, without loss of security associated with the transmitted data or the identifying code of an authorized user. Also, the system embodiment of the present invention facilitates the remote con-trol of data-transfer operations between distant stations and permits changes of and additions to central files of identifying codes for authorized individuals from remote stations without compromising the security of the transmission of such critical information In additionj the system embodiment of the present invention enables messages in various formats to be transmitted in fully-secured, encrypted form between specified persons or entities via an intermediate or central station which can link any selected pair of numerous such entities.
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Various aspects of the invention are as follows:
A ~ethod of securing the identification of an individual in data-handling operations utilizing identification information supplied by the individual, the me-thod comprising the steps of:

-3a-generating a selected number that is different for each data-handling operation;
producing a first identification code in response to the generated selected number and to first identification information supplied by an individual;
storing the generated selected number and the first identification code;
producing a second identification code in response to the stored selected number and second identification 10 information supplied by an individual;
comparing the stored first identification code with the second identification code to determine the authenticity of the supplied identification information;
generating a second selected number t~at is 15 different for each data-handling operation;
producing a third identification code in response to the second selected number and to the second identification information supplied by the individual; and storing the second selected number and the third 20 identification code for subsequent use.
A method of simultaneously securing transmitted data and the identification of an individual in data transmission between stations utilizing identification information about the individual which is pre-stored and 25 identification information supplied by the individual, the method comprising the steps of:
generating a selected number that is different for each data transmission;
producing a first encryption key in response to 30 the generated selected number and to identification information supplied by an individual at a first station;

encoding data in accordance with the first encryption key;
transmitting the generated selected number and the encoded data to a second station;
producing a second encryption key utilizing the pre$tored identification information and the transmitted selected number; and decoding the encoded data in accordance with the second encryption key.
A method of simultaneously securing transmitted data and the identification of an individual in data transmission between stations utilizing identification information supplied by the individual, the method comprising the steps of:
generating and storing a first selected number that is different for each data transmission;
producing and storing a first key in response to the first selected number and to a first identification information supplied by an individual at a first station;
producing a second key in response to the stored first selected number and to second identification information supplied by an individual;
generating a second selected number that is different for each data transmission;
producing a third key in response to the second selected number and to the second identification information supplied by the individual;
encoding in accordance with the second key selected information including data and the second selected 30 number and the third key;

-3c-transmitting the encoded information to a second station;
decoding the encoded information in accordance with the stored first key; and storing the second selected number and third key of the decoded information for subsequent use.
Apparatus for simultaneously securing transmitted data and the identification of an individual when transmitting the data between stations utilizing identification information about the individual which is pre-stored and identification information supplied by the individual, the apparatus comprising:
means for generating a selected number that is different for each data transmission;
means coupled to receive the generated selected number and to receive identification information supplied by an individual at a first station for producing a first encryption key;
means coupled to receive data and the first 20 encryption key for encoding the data in accordance with the first encryption key;
means responsive to the pre-stored identification information and coupled to receive the generated selected number for producing a second encryption key; and means disposed at a second station to receive the encoded data and the second encryption key for decoding the encoded data in accordance with the second encryption key.
Apparatus for simultaneously securing transmitted data and the identification of an individual when 30 transmitting the data between stations utilizing ~3d-1 1 59~20 identification information supplied by the individual, the apparatus comprising:
means for generating a first and a second selected number, each of which is different from each data traLnsmission:
means coupled to the generating means for storing the first selected number:
means coupled to receive the first selec~ed number and to receive a first identification information supplied by an individual at a first station for producing a first key, for producing a second key in response to the stored first selected number and to a second identification information supplied by an individual, and for producing a third key in response to the second selected number and to the second identification information supplied by the individual, the' means for storing being disposed for receiving and storing the first key;
means coupled to receive data, the second selected number, and the second and third keys for encoding in accordance with the second key selected information including the data and the second selected number and the third key; and means coupled to the means for storing and disposed at a second station to receive the encoded information for decoding the encoded information in accordance with the stored first key, the means for storing also being disposed for storing the second selected number and the third key of the decoded information for subsequent use.

-3e-Brief Description of the Drawings Figures lA and lB are block diagrams showing, respectively, the apparatus and method of the present invention;
Figures 2A and 2B are block diagrams showing, respectively, alternative embodiments of the apparatus and method of the present invention;

-3f-Figures 3A and 3B are block diagrams showing, respectively, other alternative embodiments of the apparatus and method of the present invention;
Figures 4A and 4B are block diagrams showing, respectively, still other alternative embodiments of the apparatus and method of the present invention;
Figure 5A is a schematic block diagram of another embodi-ment cf the present invention in which a transaction may be securedly controlled at a remote location;
Figure 5B is a flow chart illustrating the operation of .' the embodiment of Figure 5A;
Figures 6, 7A and 7B are illustrations of other embodi-ments of the present invention in which transactions may be securedly controlled at remote branch locations of remote central offices;
Figure 8 is an illustration of another embodiment of the present invention using prestored identification information about two individuals or entities in order to securedly control a trans-action at a remote branch location of a remote central office;
Figure 9 is an illustration of an embodiment of the present invention in which encoded identification information for an individual may be stored remotely using a sponsor and associated identification information;
Figure lO is an illustration of an embodiment of the present invention in which encoded identification information for an individual that is stored remotely may be securedly changed using a sponsor and associated identification information;
and Figure ll is an illustration of an embodiment of the present invention in which encoded messages may be transmitted between two users via a central station which routes the encoded message.
Description of the Preferred Embodiment Referring now to Figures lA and lB, there are shown an apparatus and a method for improving the security of transmitted data between stations. The apparatus and method offer improved security by not requiring the transmission of PIN data from the originating or user station to the destination or processing station. The apparatus comprises at a transmitting location 23 l~ a random number generator 13, and an irreversible algorithm module (I.A~M,) 15 (for example, of the t~pe disclosed in U. S.
Patent No. 3,938,091 issued on February 10, 1976, to M. M.
Atalla and A. F. Liu), and further comprises a storage file 17, another irreversible algorithm module l9, and a comparator 21 at a receiving location 25. In response to PIN data entered by a user and in response to a random number (RN) produced by random number generator 13, algorithm module 15 produces a user identifier code (ID) which may be transmitted and applied to comparator 21 at the receiving location. The RN produced by

2~ random number generator 13 is also transmitted to an I.A.M. l9 in the receiving station 25, A predetermined authentic PIN (pre-stored in a selected register of storage file 17) may be accessed and applied to algorithm module l9 along with the received RN to produce a new user identifier code (ID'). The algorithm module ~5 19 encrypts or encodes the signals applied thereto in a manner which is identical to module 15. The previously produced user identifier code (ID) is then compared with the ne~ly produced usex identifier code (ID') by comparator 21. If a match occurs (i.e,, if ID and ID' are found to be the same), an output data

3;0 value is produced (or internal flag is set) indicating that the transaction (e.g., user withdrawal of money from a bank) should proceed. If no match occurs, comparator 21 produces an output value indicating that the transaction should not proceed.
From the above-described apparatus and method of FigureS
lA and lB, therefore, it is seen that no personal identification number of the user (PIN) is transmitted from the originating or user location 23 to the destination or receiving location 25.
Another embodiment of the p~esent invention is shown in Figures 2A and 2B. In this embodiment, the user identifier code (ID) is produced in response to RN and to entered PIN data in a manner similar to that shown in Figures lA and lB. ~owever, only RN and ID are transmitted from user station 37 to file storage 31, 33 at processing station 39. In this embodiment, no PIN is transmitted between stations, nor is the PIN stored in the file 31, 33 where it may be susceptible to unauthorized access.
In this embodiment, the present apparatus operates, as shown in Figure 2B, to update the identifier code ID and the random number RN in storage files each time a proper verification of user is established. Thus, a user's initial entry of a PIN
is combined with an RN via an irreversible algorithm module of the type previously described to produce an ID which, with the associated RN, may be transmitted and stored in files 31, 33 at the receiver statio~ 39 (and optionally at a local file 38).
Thereafter, the authorized user again enters his PIN
(referred to herein as PIN ' ), and the RN is accessed from the file 31 (or optionally from the local file 38). The PIN ' and the retrieved RN (RNX herein) are encrypted by the algorithm module 29 to produce the ID (which should be identical to the ID in file 33) for transmission to comparator 35 at the receiving station 39. There, the comparison is made with the ID retrieved 1 15992~ `

from ~ile 33, If the match is detected, the output from com-parator 35 provides the indication that the present transaction may proceed, and also initiates the generation of a new random number RNy. This new random number is encrypted by the algorithm module 29 along with 'he PIN' which was entered in the present transaction to yield the new IDy. The new RNy and new IDy are then transmitted to files 31, 33 (and optionally to local file 38) to supplant RNX and IDX previous`ly stored therein. In this manner, a user identifier code is dynamically stored and updated each time an authorized user is verified. More importantly, however, no PIN need be stored or transmitted in order to verify the authorized user.
Referring now to the embodiment of the present invention, as illustrated in Figures 3A and 3~, a PIN in storage 47 is used with a random number RN to produce a KEY code by which data may be encrypted (encoded). However, the KEY code used to encrypt data is not transmitted. In response to a PIN entered by a user and a random number (RN) generated by a random number generator 41, irreversible algorithm module 43 of the type previously ~O described produces an encryption key (KEY) which is applied to encoding zlgorithm module 45 (e.g., an encoder such as The Bureau of Standards Chip incorporating the National Bureau of Standards' encryption-decryption algorithm which is the Federal Information Processing Standard approved by the U. S. Department of Commerce).
In response to applied data, encoding module 45 encodes the data in accordance with the encryption key (KEY). The encoded data, together with the associated random number (RN) is then trans-mitted from user station 53 to processing station 55. The random number (RN) thus received by station 55 and the prestored authentic PIN which is accessed from file 47 are applied to algorithm module l 159920 49 which produces an encryption key (KEY') that should be identical to the KEY, and this KEY' is applied to decoding module 51. Decoding module 51 operates in accordance with the same National Bureau of Standards encoding scheme as module 45 and produces the desired decrypted (decoded) data. It should be noted that as long as the entered PIN matches the prestored PIN, KEY will match KEY', and the decrypted data will match the entered data~ This embodiment of the present invention thus obviates the need to transmit the generated KEY between stations and eliminates risk of disclosure of the KEY during such trans-mission. Also, it should be noted that in this embodiment, the KEY is determined and the PIN is verified simultaneously under the control of the user. That is, the éncryption and decryption of data are solely under the control of the user by virtue of his own entered PIN. Also, the user who entered the PIN is verified in response to the encrypted data being received and decrypted at the receiver station 55 using the corresponding PIN
that is retained in file 47. Further, the information which is transmitted between stations includes a random number which changes after each transaction and the encrypted data which also changes form after each transaction, even for the same data entered at station 53.
In the embadiment of the present invention shown in Figures 4A and 4B, there is no need to transmit the PIN from user station 73 to processing station 75, and no need to store PIN information in a file. As shown in Figures 4A and 4B, the system is first initialized in preparation for user transactions.
The PIN is entered by the user during initialization and random number generator 61 generates a random number (RNl) and applies the RNl to irreversible algorithm module 63 of the type previously described. Module 63 combines the PIN and RNl information and produces therefrom a first encryption key (KEYl) to be used in later encryption of data. The RNl and KEYl are then stored for later retrieval in a storage file 65 at the processing station 75 (and optionally the random number may also be stored in a local file 72).
In commencing a transaction, the user first enters his PIN into the algorithm module 63. ~n response to the entered PIN, and in response to RNl which is accessed from file 65 (or optionally from local file 72), the module 63 reproduces the encryption key (KEYl) which is applied to the control input of the encryption module 67 (say, of the National Bureau of Standards type previously described). With the encryption module 67 set to encode in accordance with KEYl, another random number (RN2) is generated by random number generator 61, and is applied to modules 63 and 67. The module 63 is able to produce an encryption key (Æ Y2) from the applied RN2 and from the PIN that is available during the present user transaction. KEY2 and RN2 which was associated with XEY2 are included with the applied daia (which data may include a fixed alphanumeric reference) for encoding by module 67 under the control of KEYl to produce the encrypted message "DATA+RN2+KEY2". This encrypted message is then trans-mitted from user station 73 to processing station 75 where de-cryption module 69 (matching encoding module 67) decrypts or decodes the encrypted message in accordance with KEYl which is accessed from the file 65 where it was originally entered during the initialization operation previously described. The DATA is thus retrieved in clear text and the RN2 and the KEY2 are also separately available for updating file 65 (and optionally local file 72) with RN2 and KEY2 in place of RNl and XEYl, respectively.

_ g In a subsequent transaction, the user again enters his PIN in1:o the algorithm module 63. In response to the entered PIN, and in response to the updated RN2 accessed from file 65 (or from local file 72), the module 63 reproduces the encryption key (KEY2). With the encryption module 6 7 set to encode applied data in accordance with KEY2, the random number generator 61 produces another random number RN3 which is applied to the al-gorithm module 63 along with the PIN that is available during the present transaction to produce another encryption key (KEY3).
10 KEY3 and RN3 are included with the DATA that is applied to the , encoding module ~7 which produces the encrypted message "DATA+RN3+KEY3" when encrypted under the control of KEY2. This encrypted message is then transmitted from user station 73 to pxocessing station 75, where decoding module 69 decrypts the encrypted message in accordance with the Æ Y2 which is accessed as the updated entry from file 65. The DATA is thus retrieved in clear text and the RN3 and XEY3 are again available to update the file 65 (and local file 72) for use in subsequent transactions.
The reference data previously referred to as being included with the input DATA may simply be a standard code word which must be extracted at the output of module 69 as an indi-cation that the user inserted the proper PIN, In this way, the encrypted message transmitted to and received by the processing station 75 can be promptly decrypted to verify the PIN before the file 65 (or local file 72) is updated with keys and random numbers which would not relate to the authorized PIN.
Thus, it can be seen from Figures 4A and ~B that not only is PIN information not stored or transmitted from user station 73 to user station 75 but, for added security, the key used to encrypt data in response to a given user transaction is not the same key that is used to decrypt the encrypted data during such transaction. Also, it should be noted that the stored code words are updated in each transaction and that these code words are under the control of the user.
With the personal identification number of an authorized individual stored in encrypted form (PIN') along with an encrypted key for that encryption of the PIN, a system is provided which enables the authorized individual to control various secured transactions at remote locations without the need for matched pairs of modules and without compromising the security of the system. In one embodiment of the system, as shown in the block diagram and flow chart of Figures 5A and 5B, respectively, the data 81 or message MSGE to be secured against alteration or unauthorized use ~such as account number, amount of money being transferred, type of transfer, etc.) is combined with a sequence number (such as date and time) to supply to an encryption al-gorithm module 83. Of course, the data may be in clear text or in encoded form. In addition, the authorized person introduces his PIN via keyboard 87 or other entry device to produce another input to the module 83. This algorithm used in module 83 may be of the National Bureau of Standards type previously described, or of the type described in the aforementioned U. S. patent issued to Atalla and Liu. The module 83 accepts the two inputs (or obtains two inputs from any combination of all the entry bits involved) in a format as shown in Figure 5A and encodes the input information in accordance with the operating algorithm thereof to produce an N-bit output, one portion of which serves as the TRansfer Authorization Code (TRAC) signal 89 and another portion of which serves as the ACKnowledgment-TRansfer Authorization _ode (ACK-TRAC) signal 91. Only the data or message MSGE plus sequence number plus TRAC output 89 are transmitted over a data link 93 to a remote location. Note that the PIN for the authorized indivi.dual is not transmitted from the location where introduced and i~ not stored in any file.
Thus, the data link 93 may be a simple and convenient data link or voice communication over telephone lines or a writing transmitted by telegram or mail, or the like. Since the TRAC signal 89 was generated using ~he PIN and the sequence number and the MSGE, any alteration of the MSGE or TRAC or se-quence number (e.g., b~ an unauthorized attempt to rerun a cash ~- withdrawal transaction) will alter the transmitted TRAC which will not compare favorably with the TRAC signal regenerated at the receiving location. Thus, an unauthorized alteration of any part of the MSGE, SEQ. NO. or TRAC during transmission will re-sult in unfavorable comparison and rejection of the received transmission, as later described.
The received transmission is compared for parity of TRAC
signals by first accessing the memory 96 of a local central pro-cessing unit or computer 95 for the PIN of the authorized indi-vidual that is stored in encrypted-form, together with the en-crypted key that was used to encrypt the PIN and also stored in the memory, as previously described. From this information ob-tained from the computer memory 96, the PIN of the authorized individual may be regenerated using the encryption module and is then only available internally for use in regenerating a TRAC
signal at the receiving location. The PIN thus regenerated from information accessed out of the computer memory 96 and the trans-mitted MSGE and SEQ. NO. received at the remote loca~ion are encrypted in module 97 which operates according to exactly the same algorithm as is used in module 83 on the two input signals - 12 _ that are applied in exactly the same format as is applied to module 83. The resulting TRAC 99 and ACX-TRAC 101 outputs appear as a composite N-bit output in the same format as the outputs of module 83. Thus, the transmitted and received TRAC
signal 89 must be identical to the regenerated TRAC signal 99 for the received ~SGE and SEQ. NO. signals and encrypted PIN and encrypted key signals from memory 96. These two TRAC signals are compared in comparator 103 to produce an output 105 in re-sponse to parity of the two TRAC signals, and this parity output signal gates out the PCK-TRAC signal 101 for retransmission back to the originating location via a convenient communication link 93. Of course, the local computer 95 is also enabled to operate on the MSGE signal, for example, to debit an account, update a file, etc. If no favorable comparison of TRAC signals in com-parator 103 is obtained, the received MSGE signal need not beacted upon and a suitable non-response signal may be returned to the originating location.
For a favorable comparison of TRAC signals, the resulting ACK-TRAC signal is retransmitted and received back at the origi-nating location and is compared in comparator 107 with the ACK-TRAC
signal that was originally generated from the MSGE and SEQ. NO.
signals and PIN signal received from the authorized individual upon initiation of the transaction. These signals must be iden-tical for the given MSGE and SEQ. NO. signals and proper PIN from the authorized individual applied in identical formats to identical modules 83 and 97. Thus, unfavorable comparison of the two ACK-TRAC signals in comparator 107 is an indication of a possible alteration of one or more of the signals from which each of the ACK-TRAC signals is generated, or of an error or alteration in the retransmitted ACK-TRAC signal 109. Of course, an output 110 1 159~2~

generated upon favorable comparison of the two ACK-TRAC signals in comparator 107 is an indication of completion of the trans-action (e.g., debiting an account, dispensing cash, etc.~, which was initiated by the individual whose PIN 87 was introduced.
It should be noted that the system operated as described in connection with Figures 5A and 5B assures the proper identity of the individual whose encrypted PIN and encrypted key are on file at the receiving location (e.g`, bank). Also, the MSGE
cannot be altered and cannot be replayed without detection, 50 that convenient less secure data-transmission links can be used without degrading the security of the over-all system. It should be noted also that the individual's PIN is not transmitted in clear text from anywhere within the system, and that ample record-producing checkpoints are provided for later, convenient auditing procedures.
Referring now to the illustration of Figure 6, there are shown the method and means for controlling a transaction such as a "wire transfer" of funds from a remote location with a high degree of security against unauthorized manipulation. In this ~0 embodiment, the components of the system which are similar to the components of the system in Figure 5A are similarly labeled.
Thus, an authorized individual located at correspondent office A
(e.g., a bankf trucking company, etc.) is able to control a trans-action such as the "wire transfer" of money for withdrawal from correspondent office B with the aid of the circuitry, files and operation of the central office. As in the embodiment of Figure 5A, an individual (e.g., manager or officer, etc.) whose encrypted PIN and encrypting key are on file at the central office is able to generate a TRACA signal 89, as previously described, which is transmitted to the central office over a convenient data transmission link 10~, along with the composite signal 80 including data or message or instructions MSGE and appropriate sequence number (e.g., date and time). These signals when re-ceived at the central office are used to regenerate a PIN for the individual in the manner previously described from the infor-mation about that individual that is stored in the central com-puter 95 and memory 96. The PIN thus produced is then available only internally to produce a TRACA signal 99 for comparison with the transmitted and received TRACA signal 89 in comparator 103.
However, in this embodiment the output signal 105 that is gener-ated in response to favorable comparison is used to generate :
another or TRACB signal for transmission to the correspondent office B. Optionally, this signal may also be used 120 to gate out an ACK-TRACA signal for transmission back to the ori~inating office A. The new TRACB signal is produced by accessing from storage in computer memory (which, of course, may be the same computer and memory but at a different memory address location) the encrypted PINB and encrypted KEYB for an authorized individual (e.g., manager or officer, etc.) at correspondent office B. This - O PIN information is used interactively with the irreversible al-gorithm module 97' (which, of course, may be the same module 97 used in the serial-state operation of the same computer 95, 96) in order to generate the PINB which is only available internally for use in generating the TRACB signal 99' in the manner pre-viously described in connection with the TRACA signal.
The TRACB signal and the MSGE and SEQ. NO. signals maythen be transmitted over the data link 112 to the correspondent office B. There, the PINB may be manually supplied via keyboard 117 by the authorized individual (or may be regenerated in the manner previously described by interactive operation of computer 115 with the encryption module 113 from PIN information accessed from storage in computer memory).
The circuitry at correspondent office B operates in the manner previously described in connection with the receiving location in Figure SA to produce ACK-TRACB signal 119 that is transmitted back to the central office. When received there, the ACK-TRACB signal is compared with the ACK-TRACB signal locally generated in the manner previously ~escribed. The signal 118 generated in response to favorable comparison of these two signals indicates that the requested transaction was completed at office , B. Optionally, the signal 118 may be used to enable the gate to transmit the ACK-TRACA signal 121 back to the correspondent office A where it is compared with the original ACK-TRACA signal gener-ated in the manner described in connection with Figure 5A. Favor-able comparison of all the ACK-TRAC signals would provide indi-cation at office A that the requested transaction was completed at office B.
Thus, the instructions and acknowledgments required to command a transaction at the remote office are transmitted and returned with substantial security against errors and unauthorized alterations, and with ample provisions for auditable records of the transaction. It should be readily apparent that transactions between remote offices of unassociated businesses may thus be con-ducted in this manner through one or more "central" office links, as shown, for example, in Figure 7 in connection with interbank transactions. By introducing additional circuitry similar to that which was described in connection with central office 114 for each central unit or office between the ultimate end-users, a transaction may be initiated by one BANK A 123 and be consum-mated at BANK Y 125 under command and control of BANK A and with verification back to BANK A, all with a high degree of immunity from errors and unauthorized alterations. This is accomplished by retaining in the files of office 124 the requisite encrypted PIN's and encrypted keys therefor for each of its branches (or the officers thereof), and by retaining in the files of office 128 the requisite encrypted PIN's and encrypted keys therefor for each of its branches (or the officers thereof). Then, the central unit 126 need only retain in its files the requisite encrypted PINIs and encrypted keys therefor for each of offices 124 and 128 (or the officers thereof) in order to complete secured transactions in the manner previously described.
In similar manner, an interchange transaction between bank A and bank B may be accomplished by using a data switch to route customer information and TRAC signals between banks A and B, Thus, data from a customer of one bank 132 which is entered on a Teller Terminal 128' such as a conventional automatic teller machine (ATM~ in one bank 130 may be routed to the proper bank via the data switch 134 for comparison with data on file for that customer at bank 132. The TRAC, MSGE and SEQ. NO generated in response to the customer's entry of his own PIN may thus be trans-ferred via switch 134 to the proper bank 132 for comparison there with data on file, all as previously described, for example, with respect to the embodiment of Figure 6.
Referring now to the illustration of Figure 8, there is snown another embodiment of the present invention in which a central office is able to implement the command and confirmation of a transaction consummated between remote offices. In this embodiment, the apparatus and method of operation for trans-ferring data between office A 131 and central office 133 is similar to the operation previously described in connection with 1 ~ 59920 Figures 5A and 5B, except that upon favorable comparison of TRACA
signals, only the MSGE and SEQ. NO. signals 134 are retransmitted to the office B 135 and, optionally, the ACK-TRACA signal may also be returned to office A 131 as an acknowledgment of proper receipt of the transmitted information. At office B, the PINB signal for another authorized individual is provided for generating a TRACB
signal as previously described for transmission back to the cen-tral office 133 with the MSGE and S~Q. NO. signals 137. At the central office 133 the PINB must be regenerated from stored infor-mation in order to produce a TRACB signal therefrom in combination ~; with the MSGE and SEQ. NO. signals, as previously described. Upon favorable comparison of TRACB signals at the central ofice 133, the ACK-TRACB signal may be transmitted back to the receiving office B 135 as a confirmation of unaltered communication of data between office B 135 and the central office 133.
Referring now to the illustration of Figure 9, there are shown the apparatus and the method involved in remotely signing on a new individual who is to receive authorization to use the system. This is accomplished with the aid of a sponsor who is already authorized to use the system and whose PIN is- already stored in encrypted form in the remote tsay, central) location 141. It is possible in this embodiment of the present invention to introduce a new PIN for a new individual at a remote storage file with a high degree of security while using the transmission data link 143 in a manner similar to that which was described above. Note that this embodiment requires the entry o~ a new PIN for the new individual as part of data (entered, for example, by a keyboard) to be encrypted by the encryption module 157.
This information, along with a sequence number (say, date and time) is then encrypted in the encryption module 157 during a 1 159~20 first operating state using the PIN of the sponsor as part of the encryption key. The data may include an indication of the bit-length of the P~N for the new individual, etc., and the en-cryption thereof yields an encrypted PIN 153 for the new indi-vidual. Also, the PIN for the sponsor, entered by keyboard 155along with other data and sequence number and encrypted PIN for the new individual can be applied to the encryption module 157 operating during a sequential state or time-shared mode to pro-duce a TRACS signal 159. This TRACS signal is transmitted along with the encrypted PIN' signal 153 for the new individual and data and the sequence number signal 161 over data link 143 to the remote or central location 141.
At the remote location, the PIN of the sponsor is de-crypted by the encryption module 166 from information including encrypted PIN' and encrypted key for the sponsor contained in computer memory 165. Thus, once the PIN for the sponsor is re-generated, it is available (internally only) in combination with the received SEQ. NO. and other data as one input to the module 166 while the received encrypted PIN' for the new individual ~0 serves as another input. This module then operates according to the same algorithm as module 157 to produce a TRACS signal which should compare favorably with the received TRACS 159. When so favorably compared (indicating transmission and reception without alteration), the resulting output 168 then controls the encryption of the PIN for the new individual. This is accomplished by first decrypting the received PIN' for the new individual to obtain the PIN for the new individual in clear text (internally only). This is obtained by decrypting in encryption module 166' the sequence number and the received encrypted PIN for the new individual.
The encryption module 166' operates with the same algorithm as -- 19 _ 1 1 5992~

module 157 (and, of course, may be the same module as module 166 operating in a sequential state or time-shared mode) to yield the PIN 172 for the new individual in clear text tinternally only).
A random number from generator 171 is then combined with the PIN
for the new individual 172 in an encryption module 166 " (which, of course, can be the same as module 166 operating in a sequential state or time-shared mode) to produce the encrypted PIN for the new individual which can be stored in memory 165 along with the random number 176 used to encrypt the PIN. Of course, the (PIN') for a new individual may also be transmitted over a data link 143 to a remote location 141 with additional data necessary to iden-tify the individual, the extent of his authority, data about the number of bits in the new individual's PIN, the encryption key, etc. Either way, a new individual may be incorporated into a total system from a remote or branch location and thereby obviate the need to sign on only at a central location.
With reference to the illustration of Figure 10, it should be noted that an individual may also change his own PIN
from a remote location with the aid of a sponsor. The sequence ~0 number 181 may be used to prepare a TRACS signal 183 for the sponsor and another TRACoLD signal 185 for the old PIN of an established individual, all as previously described. These TRAC
signals may be stored in a buffer 187 for assemblage into a format, as illustrated. In addition, an encrypted form of the new PIN
for such individual is also generated by the encryption module 188 using the sponsor's PIN alone or in combination with a SEQ. NO., etc., as the encryption key. A composite signal 186, for example, in a format as illustrated, may be transmitted with the SEQ. NO.
signal 189 over the data transmission link 190 to the remote location 192. Then, using an encryption module 194 (shown in 1 15992~

three circuit locations for clarity and comprehension, but singularly usable in different sequential states or time-shared modes for the operations indicated), the encrypted PIN and en-cryptecl key therefor for the sponsor stored in file l91 may be operated with module 194 to regenerate the PIN (internally only) for the sponsor according to the same algorithm used in module 188. This can then be combined in the module 194 with the re-ceived SEQ. NO. signal 189 to produce the TRACS signal for the sponsor using the same algorithm as in module 188. Similarly, the TRAC signal for the old PIN of the individual may also be regenerated from information contained in file 191, all as pre-viously described. These two TRAC signals may thus be compared in comparator 199 with the received TRAC signals in the same format. If comparison is favorable, indicating that the TRAC
signal for the sponsor's PIN and the TRAC signal for the old PIN
are all right, then the resulting output signal 198 controls the decryption of the encrypted new PIN for the individual using that individual's old PIN (available only internally) as the decryption key in the module 194'. The resulting new PIN for the individual ~0 may be encrypted in module 194'' using a random number from generator 201 to yield the encrypted new PIN and encryption key therefor for storage in file 191, as previously described. Thus, when an individual is to be introduced into the system for the first time, he may merely be given a PIN that is set into a central file solely for the purpose of enabling him to change the PIN to one of his own, secret selections as the first trans-action.
Referring now to the illustration in Figure 11, the present invention may be used to transmit a secured memo or other message between two users via a central station which contains the identification information fox the two users and which provides the requisite routing of the encoded message. In this embodiment of the invention, the sender A at station 205 introduces his PINA, identifies himself and his intended receiver B at location 209, and also introduces a SEQ. NO. (such as date and time), all via keyboard means 211 which may contain a full complement of 26 letters and 10 digits for convenient encoding of textual messages. In addition, sender A introduces his message to be encoded for secure transmission over the data link 203 to the central station 213 for further processing.
At the initiating station 205, the keyboard means 211 may contain conventional,addressable buffer registers for se-lecting the portions of input information introduced via the key-board keys for separate treatment and routing. Thus, for a National Bureau of Standards encryption module 207 of the type previously described, the keyboard means 211 may supply two separate inputs to the module 207 in the format illustrated (or in other suitable sets of the input information, as desired) and may also supply the identity of A and B (and optionally the se-~0 quence number) in clear text. The module 207, operating on thesignals applied to it, produces an encoded ~essage 215 which can be sent along with the identity information about A and B over data link 203 of any type, as previously described, to the cen-tral station 213. There, the received encoded message 215 is decoded using information about the sender A that is on file and is then reencrypted for retransmission using information about receiver B which is also on file Specifically, the received information 206 (in clear text usually) which identifies the sender A enables the encoded PIN for sender A and the encrypted key therefor to be withdrawn from file 219 for decoding using 1 1 5992~

the encrypted key, as previously described, to produce PI~A
(internally only) that is then used to decrypt the received message 215 in encryption module 217. Once decrypted (and avail-able internally only), the message may now be reencrypted using the PINB for the receiver B. The PINB may be reproduced (avail-able internally only) by decrypting the encrypted PINB and the encrypted keyB therefor applied to encryption module 217 in the manner previously described to produce the PINB for reencrypting the message that was decrypted using the PINA. Thus, the en-crypted message 221 that is transmitted via data link 223 to station 209 along with the information 206 about the sender A
and the receiver B is newly encrypted with respect to the identity of the intended receiver B.
At the remote station 209, the received encrypted message 221 and the received information 206 about the sender A and receiver B may be decoded under B's control to yield the encoded message in clear text. Specifically, the receiver B need only enter his PIN via keyboard means 225 for combining with the re-ceived sequence num~er, and the like, to provide the input signal - ~0 in requisite format to apply to the encryption module 227. The key for decrypting the received encrypted message 221 is thus supplied by B himself to operate the module 227 according to the inverse of the algorithm by which module 217 reencrypted the message, Of course, TRAC signals and ACK-TRAC siqnals may be furnished and transmitted along with the encoded messages in the manner previously described. However, in this application where an entire memo or letter is being encoded, for example, in elec-tronic mail transmission, the entire memo will either decode or not decode depending upon whether error or tampering occurred in transmission, or upon whether unauthorized persons attempted to transmit or decode messages within this system embodiment of the present invention. Thus, a "scrambled" memo remaining after an attempted decryption by receiver B at station 209 indicates that error or alteration occurred during transmission or that un-authorized persons other than those whose encrypted PIN's andencrypted keys are on file at station 213 attempted to transmit or decode the memo.
It should be noted that for enhanced security or control, two or more individuals, each having a PIN that is stored remotely in encrypted form along with the encryption keys therefor, may combine their PIN's to produce a composite TRAC signal, for example, as described in connection with Figure 5A, that can then be compared with a TRAC signal regenerated from the two PIN's and encryption keys therefor stored in the remote file. The rest of the acknowledgment message may proceed as described in connection with Figure 5A.
In each of the embodiments above, additional information such as a MSGE or DATA signal may always be sent to the remote location along with the TRAC signalts) transmitted. Such MSGE
_O or DATA signals may identify-the first number of characters of one input to an encryption module that represent the number of bits in the PIN, or the like. Also, it should be understood that in each of the embodiments of the present invention described above sequential numbers may be used in place of random numbers used in the identification or encoding schemes, or random numbers may be used in place of sequential numbers. This permits the systems to exclude the repeating of the same data or information in subsequent transactions by enabling a check for parity of either random or sequential numbers at the receiving stations.
Also, as used herein, "individual" may refer to a person or an institution such as a correspondent bank, or the like.

t 159920 Therefore, the present invention may operate without paired modules at remote ends of a data transmission link, pro-vided, of course, that encryption modules of similar type and operable according to the identical algorithm are contained in each location. Then, the secret PIN of an individual remains secret at the entry point (and is either stored in encrypted form or regenerated internally only elsewhere in the system).
This facilitates the convenient generation of a TRAC signal, for example, by a simple calculator-type device containing an encryption module, and this TRAC signal may then be openly com-municated to the remote location by telephone, telegram, etc., along with the transaction message or data, all without possi-bility of unauthorized alteration. Such a user's device may simply calculate a TRAC number for all the data, PIN and SEQ. NO.
supplied, and this TRAC number becomes that user's unique signa-ture for that single transaction. Audit records pertaining to all such transactions are therefore amply available and more readily recallable than the microfilmed records of paper trans-actions currently in use.

Claims (5)

WHAT IS CLAIMED IS:

1. A method of securing the identification of an individual in data-handling operations utilizing identification information supplied by the individual, the method comprising the steps of:

generating a selected number that is different for each data-handling operation;
producing a first identification code in response to the generated selected number and to first identification information supplied by an individual;
storing the generated selected number and the first identification code;
producing a second identification code in response to the stored selected number and second identification information supplied by an individual;
comparing the stored first identification code with the second identification code to determine the authenticity of the supplied identification information;
generating a second selected number that is different for each data-handling operation;
producing a third identification code in response to the second selected number and to the second identification information supplied by the individual; and storing the second selected number and the third identification code for subsequent use.

2. A method of simultaneously securing transmitted data and the identification of an individual in data transmission between stations utilizing identification information about the individual which is pre-stored and identification information supplied by the individual, the method comprising the steps of:
generating a selected number that is different for each data transmission;
producing a first encryption key in response to the generated selected number and to identification information supplied by an individual at a first station;
encoding data in accordance with the first encryption key;
transmitting the generated selected number and the encoded data to a second station;
producing a second encryption key utilizing the prestored identification information and the transmitted selected number; and decoding the encoded data in accordance with the second encryption key.

3. A method of simultaneously securing transmitted data and the identification of an individual in data transmission between stations utilizing identification information supplied by the individual, the method comprising the steps of:
generating and storing a first selected number that is different for each data transmission;
producing and storing a first key in response to the first selected number and to a first identification information supplied by an individual at a first station;
producing a second key in response to the stored first selected number and to second identification information supplied by an individual;
generating a second selected number that is different for each data transmission;
producing a third key in response to the second selected number and to the second identification information supplied by the individual;
encoding in accordance with the second key selected information including data and the second selected number and the third key;

transmitting the encoded information to a second station;
decoding the encoded information in accordance with the stored first key; and storing the second selected number and third key of the decoded information for subsequent use.

4. Apparatus for simultaneously securing transmitted data and the identification of an individual when transmitting the data between stations utilizing identification information about the individual which is pre-stored and identification information supplied by the individual, the apparatus comprising:
means for generating a selected number that is different for each data transmission;
means coupled to receive the generated selected number and to receive identification information supplied by an individual at a first station for producing a first encryption key;
means coupled to receive data and the first encryption key for encoding the data in accordance with the first encryption key;
means responsive to the pre-stored identification information and coupled to receive the generated selected number for producing a second encryption key; and means disposed at a second station to receive the encoded data and the second encryption key for decoding the encoded data in accordance with the second encryption key.

5. Apparatus for simultaneously securing transmitted data and the identification of an individual when transmitting the data between stations utilizing identification information supplied by the individual, the apparatus comprising:
means for generating a first and a second selected number, each of which is different from each data transmission;
means coupled to the generating means for storing the first selected number:
means coupled to receive the first selected number and to receive a first identification information supplied by an individual at a first station for producing a first key, for producing a second key in response to the stored first selected number and to a second identification information supplied by an individual, and for producing a third key in response to the second selected number and to the second identification information supplied by the individual, the means for storing being disposed for receiving and storing the first key;
means coupled to receive data, the second selected number, and the second and third keys for encoding in accordance with the second key selected information including the data and the second selected number and the third key; and means coupled to the means for storing and disposed at a second station to receive the encoded information for decoding the encoded information in accordance with the stored first key, the means for storing also being disposed for storing the second selected number and the third key of the decoded information for subsequent use.