Data processing: financial – business practice – management – or co – Automated electrical financial or business practice or... – Electronic shopping
Reexamination Certificate
2000-04-13
2003-06-10
Bartuska, F. J. (Department: 3627)
Data processing: financial, business practice, management, or co
Automated electrical financial or business practice or...
Electronic shopping
Reexamination Certificate
active
06578014
ABSTRACT:
STATEMENT REGARDING FEDERALLY SPONSORED RESEARCH OR DEVELOPMENT
Not Applicable
REFERENCE TO A MICROFICHE APPENDIX
Not Applicable
BACKGROUND OF THE INVENTION
The method and apparatus of the present invention relate to a commercial network system to facilitate transactions.
Buyers and sellers traditionally exchange information, goods, and services for money through one of several methods. In the most common of these, the seller sets the price, and the buyer either accepts that price or doesn't (for example, retail, or most classified ads). In another common method, the buyer and seller agree to a price (for example, a flea market, or a classified ad which includes ‘or best offer’). Sometimes buyers compete and the highest price offered wins (for example, a standard auction, a reverse auction, or a Dutch auction). Sometimes sellers compete for a given buyer (for example, a ‘wanted to buy’ classified ad). Other commerce systems are exchange-driven, and buyers and sellers are matched in an orderly marketplace (such as the NASDAQ or the New York Stock Exchange). In all of these buyer-seller protocols, the buyer and seller agree to the price and other payment terms before the information, goods, and services are provided. Several U.S. patents relate to on-line electronic communications and processing of transactions between multiple buyers and sellers with these various buyer-seller protocols. But for every single one of these, the buyer and seller do agree to a price before the transaction is completed; indeed, if an agreement on price and other terms cannot be reached, the transaction does not occur.
While each of these systems does enable and make efficient some types of transactions, other transactions are not able to be carried out or are not done optimally for a variety of reasons. For example, a buyer may be uncertain about the value of the item(s) he/she is considering buying and might therefore be reluctant to make the purchase. Unless the item is a commodity product (i.e. identical to or interchangeable with another item of the same type), the value of the item will not be immediately apparent and will take time, effort and cost for the buyer to determine, based on the item's unique features. An item could be intentionally or unintentionally described incorrectly or incompletely by the seller, misleading the buyer about its value.
In some cases, the value of an item to a given buyer simply cannot be known until the item is received and used. Economists call such items “experience goods”. One example is a research article which may or may not contain some specific information that a buyer is looking for: if the information is in the article then the article is valuable to the buyer, but if not then it is worthless to him/her.
Additionally, each of these systems requires that the buyer and seller agree to not just the price but all the other terms of the transaction as well, before the transaction can occur. There are often high costs associated with this activity, such as lengthy contracts with various conditions and stipulations. Even for those transactions which do get carried out, there are issues with the systems that are currently used. For example, even after an item is delivered, there may be disputes about whether the item that was delivered is really the item that was described by the seller: for example, some features of the item detracting from its value may not have been mentioned by the seller. Additionally, a buyer may not know anything about a seller and may be unsure about whether that seller can be trusted. Some attempts have been made to minimize the negative effects of these problems, such as warranties and money-back guarantees or consulting “on spec”, but each of these has its own set of limitations that restrict its use and can introduce inefficiencies and costs into the transaction process. Similarly, a seller may not know anything about a buyer and may be unsure about whether the buyer is serious about purchasing the item, and whether the buyer has enough money to pay for the item.
Another issue is that some people don't like to negotiate, and may choose not to engage in a transaction which requires negotiation, or one which is likely to result in a suboptimal deal without negotiation.
Another issue is enforcement. If either participant feels that the other has committed a fraudulent act, he/she does have some recourse through legal channels; but this activity can be time-consuming and expensive.
Additionally, customer service is sometimes low-quality, because a seller may not have sufficient financial incentive to provide high-quality customer service once he/she has received payment for the information, goods, and services provided.
Furthermore, existing pricing methods are not well-suited to items which can be sold to multiple buyers, such as information. For example, auctions operate based on competition between buyers for a given item, but if the item can be provided to a potentially unlimited number of buyers, the supply is not constrained and buyers have no reason to try to outbid one another.
Also, buyer-driven systems are not prevalent in general, because buyers usually do not want to be inundated with numerous offers from potential sellers, many of whom may be marginal or unqualified (e.g. a thousand real estate brokers or car dealers all calling one buyer).
Furthermore, buyer-driven systems impose inherent costs on sellers as well. If each buyer has a different set of purchasing specifications and communicates his needs using non-uniform language, sellers must pay a substantial cost to review and understand each individual request. Moreover, sellers are often not amenable to customizing their products for individual buyers.
The applicant is unaware of the existence of any commercially-viable commerce system which addresses the above-described shortcomings in the prior art by allowing the buyer to set the price following receipt of the item. Therefore, it is one object of the present invention to set forth a system of electronic commerce that offers the capability for buyers and sellers to transact and for buyers to set the price for a given item after receiving the item.
Basic Contract Law
In order to understand the requirements necessary to form binding contracts through electronic commerce, a brief review of the current state of contract law is necessary. An essential prerequisite to the formation of a contract is an agreement: a mutual manifestation of assent to the same terms. This is the case for the present invention: the buyer and seller both understand that the seller is providing the item to the buyer without any guarantee of a specific payment, and state such understanding by accepting the user agreement when registering to use the system.
With the advent of new technology, methods of doing business are rapidly expanding. These new methods challenge traditional contract principles, which are premised on personal contact and paper contracts. Thus, some legal issues in the field of electronic commerce remain unresolved. Despite the uncertainty, when a transaction occurs in a purely electronic environment, the threshold legal determination revolves around whether the electronic messages establish an offer and acceptance given the absence of documentation.
The exchange of electronic messages that offer and accept a contractual relationship should form a contract with respect to the specific order. An offer consists of an expression of a willingness to enter a contract when that expression occurs in a form sufficiently concrete to establish that agreement. Under this doctrine, an electronic message may constitute the necessary expression of intent. Problems exist where unauthorized people or inaccurate information trigger an offer from a system. These problems could be solved by methods of attribution or authentication. Once questions of attribution are resolved, and subject to considerations about the Statute of Frauds and the like, no requirement exists in law that a contract offer be in writing.
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