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