Abstract:
An online coupon issuing and redemption system and method receives requests for coupons from consumers, presents advertisements and issues coupons to consumers electronically. The system presents advertisements before issuing the coupons, such that an issuer may be assured its targeted consumer are receiving its advertisements. The coupons are issued on a smart card, thereby eliminating a need for paper coupons. The coupons are digitally signed in order to prevent fraud. In order to prevent further fraudulent tampering of coupons, the redemption station includes a tamper-protected coprocessor for performing operations on the coupons. The system further includes capability for the redemption station to link to an issuing station for electronic reimbursements.

Description:
TECHNICAL FIELD 
     The present invention relates to consumer shopping in general, and more particularly to an electronic advertisement and coupon issuance and redemption system. 
     BACKGROUND ART 
     Retailers and manufacturers often sponsor incentive programs for persuading consumers to buy their products. These incentives include discount coupons distributed to consumers whereby a consumer may redeem the coupon when purchasing an associated item. Such coupons are usually distributed in paper forms. 
     The problems associated with paper coupons today are that the retailer and manufacturers who advertise cannot assure that consumers who use paper coupons have actually read the product advertisements which accompany the coupons. The advertisers do not have a way of knowing who is viewing their advertisements and cannot dynamically adjust the advertisement to fit the viewer&#39;s tastes and interests. 
     In addition, many cases of fraud related to paper coupons are occurring today. For example, paper coupons are easily counterfeited. Some consumers commit fraud by redeeming coupons for merchandise they have not purchased. Some retailers also commit fraud by redeeming coupons for merchandise which consumers have not purchased. 
     Manufacturers must rely on the cashiers and computer systems at retail establishments to assure that consumers who redeem coupons have actually bought the targeted product and that the coupons redeemed were not expired at the time of redemption. Retailers often rely on their cashiers to enforce coupon redemption rules. Other retailers rely on computerized systems to compare coupon bar codes to the consumer&#39;s purchases. 
     U.S. Pat. No. 4,880,964 Donahue describes paper coupons with bar codes printed on them, and thus does not solve the deficiencies of paper coupons described above. U.S. Pat. No. 5,710,866 by Christensen et al. describes electronically generated coupons but requires a database of customers and spent coupons which is costly to maintain. It also requires online connection to the database at redemption time to determine if the coupon is valid. 
     SUMMARY OF THE INVENTION 
     The present invention is an online coupon issuing and redemption system. The issuing system of the present invention includes an issuing station. The issuing station is generally comprised of a computer located usually at a manufacturer&#39;s site. The issuing station typically generates advertisements and coupons electronically. The issuing system also includes a consumer station, usually a computer and a smart card reader/writer generally located at the consumer site. The smart card reader/writer may be linked to the consumer computer either directly or via a LAN or other network connections. 
     The issuing station and consumer station are linked via a communications network. When a consumer makes requests via the consumer station for coupons, the issuing station transmits the advertisement and coupons it generated to the consumer station. The issuing station also has a capability of digitally signing the coupons. Digital signatures insure the authenticity of the coupons as well as that of the issuer and the issuing station. Also included in the transmission is a program having a capability to run on the consumer station. The program is responsible for making sure that the consumer absorbs the entire advertisement and transferring the coupons to a smart card via the smart card reader/writer linked to the consumer station. 
     Accordingly, it is the object of the present invention to assure the advertisers that a consumer actually perceives the advertisement for a product before receiving discount coupons. 
     The system of the present invention also includes a redemption system. The redemption system generally comprises a redemption station, typically a computer, and a smart card reader/writer linked to the redemption computer. The redemption system is typically located at a purchasing site. When a consumer is ready to make a purchase, the consumer inserts the smart card having electronic coupons stored in it into the smart card reader/writer linked to the redemption station. The redemption system reads the coupons via the smart card reader/writer and matches the purchased items with coupons. The matched coupons are extracted from the smart card, so that they may not be used again. At the same time, the redemption system deletes any expired coupons stored in the smart card. 
     The redemption system also may include a tamper-protected secure coprocessor. In order to protect a manufacturer from fraudulent merchants and customers, operations which assess the validity of coupons, operations which update, collect, store, or delete coupons may take place inside a tamper-protected hardware boundary. The hardware boundary is part of typical tamper-protected secure coprocessors and smart cards. 
     Accordingly, it is yet another object of this invention to provide a tamper-protected access to the coupons stored in the smart cards. 
     Alternatively, the system of the present invention may include a database of coupons stored in the issuing station. The database may include a list of coupons issued or already spent. When a consumer is ready to redeem the coupons, the redemption station links to the database and validates the coupons stored in the consumer&#39;s smart card by comparing the smart card coupons with a list of coupons in the database. Only the valid coupons matching the list in the database may be actually redeemed. 
     The system of the present invention also includes a communications link between a redemption station and an issuing station. Such a link is established when a merchant wants reimbursements from the manufacturer for the coupons the merchant redeemed to the consumers. Typically the redemption computer sends electronic coupons which have been digitally signed to the issuing computer. The issuing computer validates the electronic signatures on the coupon. If the signatures are valid, the manufacturer reimburses the merchants for the valid coupons. Accordingly, it is a further object of the present invention to provide a mechanism for the manufacturer to electronically reimburse the merchants. 
    
    
     BRIEF DESCRIPTION OF THE DRAWINGS 
     FIG. 1 is an exemplary diagram illustrating a physical architecture of an issuing system of the present invention. 
     FIG. 2 is a flow diagram illustrating one possible logic flow of issuing software running on the issuing computer of the present invention. 
     FIG. 3 is a flow diagram illustrating one possible logic flow of advertisement viewing software running on the viewing computer of the present invention. 
     FIG. 4 is a flow diagram illustrating one possible logic flow for interaction between advertisement viewing software and issuing software. 
     FIG. 5 is an illustrative example showing a physical layout of a redemption system architecture in the present invention. 
     FIGS. 6 and 7 are a flow diagram illustrating one possible logic flow in the redemption system during a typical point of sale. 
     FIG. 8 is a flow diagram illustrating a possible logic flow in a typical daily coupon closeout. 
     FIG. 9 is an illustrative example showing a physical layout of a software-based redemption system of the present invention in its alternative embodiment. 
    
    
     DESCRIPTION OF THE PREFERRED EMBODIMENT 
     FIG. 1 is an exemplary diagram illustrating a physical architecture of an issuing system of the present invention. An authenticated electronic coupon issuing system shown in FIG. 1 includes an issuing station, typically a computer  110  running issuing software  115 ; a viewing station, typically an advertisement viewing computer  120  running advertisement viewing software  123  which sends requests for coupons  125  to an issuing computer  110 ; an advertisement viewing computer  120  running advertisement applet software  130 ; an electronic advertisement  140 ; an electronic coupon which is digitally signed  150 ; a dispensing smart card reader/writer  160 ; a customer&#39;s smart card  170  holding an electronic coupon  150 . A typical smart card may be a chip card having an integrated circuit that is resistant to physical tampering. An issuing station typically comprises a computer at a manufacturer or clearing house site. Likewise, a viewing station typically comprises of a computer at a customer site. A customer is typically a consumer who receives coupons electronically and makes purchases using the coupons. 
     A dispensing smart card reader/writer  160  is attached to an advertisement viewing computer  120  and is accessible by advertisement applet software  130 . 
     Issuing software  115 , advertisement viewing software  123 , and advertisement applet software  130  are typically purchased from software vendors. An electronic advertisement  140  is supplied by an advertisement content vendor. A customer&#39;s smart card  170  may be purchased from a smart card vendor. Likewise, a customer&#39;s smart card reader/writer  160  may be supplied by a smart card reader/writer vendor. An issuing computer  110  and an advertisement viewing computer  120  may be obtained from computer hardware vendors. An electronic coupon  150  is generated by issuing software  115 . A request for coupons  125  is generated by advertisement viewing software  123 . 
     FIG. 2 is a flow diagram illustrating one possible logic flow of issuing software running on the issuing computer of the present invention. Initially in step  210 , the issuing software awaits a request from an advertisement viewing computer. A request includes information about the customer, such as his interests (e.g., propensity for playing tennis), and demographics (e.g., a senior citizen). In step  220 , the issuing software retrieves a customer&#39;s interest profile and demographics from a request. In step  230 , the issuing software selects an electronic advertisement which matches a customer&#39;s interest profile and demographics. For example, if a customer is a senior citizen, the issuing software selects an electronic advertisement targeted at senior citizens, not one targeted at teenagers . In step  240 , the issuing software generates an electronic coupon which 
     Digital signatures are generally created by piping a sender&#39;s private key and the contents of the message into an algorithm. The output of the algorithm is the digital signature. The recipient can verify the digital signature by using the sender&#39;s public key and the message. The digital signature is secure because it would be virtually impossible for another computer to produce the identical digital signature. Each user has the responsibility of protecting the private key. 
     In step  250 , the issuing software transmits an electronic advertisement, advertisement applet software, and an electronic coupon to an advertisement viewing computer. The issuing software then waits for another request from the advertisement viewing software. 
     FIG. 3 is a flow diagram illustrating one possible logic flow of advertisement viewing software running on the viewing computer of the present invention. In step  310 , the advertisement viewing software awaits a request for a coupon from a customer. In step  315 , the viewing software obtains information about a customer, such as his interests and demographics. The viewing software may obtain the information directly from a customer through a dialogue, or from a customer&#39;s smart card, or from a file on the viewing computer. In step  320 , the viewing software includes a customer&#39;s interest profile and demographics with a request for a coupon. In step  325 , the viewing software transmits a request for a coupon to an issuing computer. In step  330 , the viewing software awaits a response from an issuing computer. If there is no response, the viewing software times out, in step  335 , displays an error message and, in step  310 , awaits for another request from a customer. If there is a response from an issuing computer, the viewing software receives advertisement applet software, an electronic advertisement, and an electronic coupon as shown in step  340 . In step  350 , the viewing software then runs advertisement applet software. The software determines, in step  360 , if the customer viewed an entire advertisement. In step  370 , if the applet software times out or if a customer exited the software prematurely, the viewing software terminates the session and returns to wait for another request from a customer in step  310 . In step  380 , if the applet determines that a customer did view the entire advertisement, the applet software transmits an electronic coupon which is digitally signed to a customer&#39;s smart card via a dispensing smart card reader/writer. 
     An example of viewing software may include a World Wide Web (Web) page having a uniform resource locator (URL) address which a consumer may access via a Web browser. The URL address would be located in the web server linked to an issuing station. The Web page may have a number of parameter fields as input fields which the consumer is required to fill. The Web page with the parameters may then be transmitted to the web server at the issuing station. The web server together with issuing software may then use the parameters to generate electronic advertisements and coupons, transmitting them with an applet software to the viewing software. The viewing software typically launches the applet software. The launched applet software displays the advertisements on the consumer station, controlling the station&#39;s interaction with the consumer. The applet software may also be responsible for transferring the coupons to the consumer&#39;s smart card. Furthermore, the applet software may provide interactivity, for example, requiring that the consumer answer questions about the product or advertisement, to assure that the consumer is truly absorbing the advertising information. 
     FIG. 4 is a flow diagram illustrating one possible logic flow for interaction between advertisement viewing software and issuing software. In step  420 , an advertisement viewing computer requests an electronic coupon from an issuing computer. In step  430 , an issuing computer transmits advertisement applet software, an electronic advertisement, and an electronic coupon which is digitally signed to an advertisement viewing computer. In step  440 , an advertisement viewing computer runs applet software. The applet software displays an electronic advertisement. In step  450 , the applet software determines how to proceed based on whether or not a customer viewed an entire advertisement. In step  460 , if a customer does not view an entire electronic advertisement, the advertisement applet software terminates the session and awaits another request, step  410 . If, however, a customer views an entire electronic advertisement, in step  470 , the applet software rewards the customer by transmitting an electronic coupon which is digitally signed to a customer&#39;s smart card. The smart card is typically inserted into a dispensing smart card reader/writer. Furthermore, the advertisement applet software may be interactive, requiring that a customer answer questions about a product or advertisement, to assure that a customer is truly absorbing the advertising information. Secure protocols, tamper-protected hardware, or record keeping databases typical in electronic money systems may be employed to prevent consumers and retailers from double spending or duplicating the electronic coupons. A suitable example for such secure protocols are described in detail in M. Bellare et al., “iKP—A Family of Secure Electronic Payment Protocols”, Jul. 12, 1995, available from IBM. 
     Electronic coupons are not printed, therefore they cannot be printed over and over again, or photocopied. The number of electronic coupons a smart card may hold may be limited. 
     FIG. 5 is an illustrative example showing a physical layout of a redemption system architecture in the present invention. An authenticated coupon redemption system as shown in FIG. 5 comprises a redemption computer  510 , a tamper-protected secure coprocessor  520 , a redemption smart card reader/writer  530 , a customer&#39;s smart card storing a digitally signed electronic coupon  150 , and an issuing station. An issuing station is typically comprised of a computer  110  and is generally resident at a manufacturer or at a clearing house that performs the duties for a manufacturer or a group of manufacturers. A redemption smart card reader/writer  530  is typically attached to a redemption computer  510 . A tamper-protected secure coprocessor  520  is connected to a redemption computer  510  either directly or via a communications network. A redemption computer  510  may also be connected to an issuing computer  110 , typically via phone line  570 . 
     FIGS. 6 and 7 are a flow diagram illustrating a possible logic flow in the redemption system during a typical point of sale. In step  610 , a consumer inserts the smart card  170 FIG. 1 into a redemption smart card reader/writer  530  FIG.  5 . The smart card includes electronic coupons which have been digitally signed  150  FIG.  1 . In step  620 , the smart card sends a list of all coupons stored in it to a redemption computer  510  FIG.  5 . In step  630 , a redemption computer forwards the list of coupons and optionally a list of items purchased to a tamper-protected secure coprocessor  520  FIG.  5 . In step  640 , the tamper-protected secure coprocessor  520 FIG. 5 examines the list of all coupons, and assembles a list of those which have expired. In step  650 , the tamper-protected secure coprocessor  520 FIG. 5 requests a redemption computer to send a command to a smart card to delete expired coupons. Next, in step  660 , the tamper-protected secure coprocessor searches for non-expired coupons that match actual items purchased. If there are no matching items, in step  670 , the tamper-protected secure coprocessor tells the redemption computer that no items matched the coupon list. If there are matching items, in step  680 , the tamper-protected secure coprocessor assembles a list of matching items and valid coupons. In step  690 , the coprocessor requests the redemption computer to send a command to the smart card to extract valid matching coupons. In step  695 , the smart card sends the valid matching coupons to the tamper-protected secure coprocessor. 
     In order to protect a manufacturer from fraudulent merchants and customers, operations which assess the validity of coupons, operations which update, collect, store, or delete coupons take place inside a tamper-protected hardware boundary  655 . The hardware boundary is part of typical tamper-protected secure coprocessors and smart cards. A typical tamper-protected secure coprocessor may be a tamper-protected computing device having a microprocessor and memory in a tamper-protected enclosure, such as the IBM 4758. 
     FIG. 8 is a flow diagram illustrating a possible logic flow during a typical daily coupon close-but. In step  710 , a redemption computer  510 FIG. 5 connects to the issuing computer  110 FIG. 5 or clearing house computer. Such connection would generally occur at the end of the day, or at some appropriate period of time. In step  720 , the redemption computer  510 FIG. 5 sends electronic coupons which have been digitally signed  150 FIG. 5 to the issuing computer  110  FIG.  5 . In step  730 , the issuing computer validates the electronic signatures on the coupons. In step  740 , the clearing house reimburses the merchant for the valid coupons. 
     FIG. 9 is an illustrative example showing a physical layout of a software-based redemption system of the present invention in its alternative embodiment. The embodiment shown in FIG. 9 replaces the tamper-protected secure coprocessor  520 FIG. 5 in the redemption computer  510 FIG. 5 with a database of coupons  810  in the issuing computer  110  FIG.  5 . The database includes either a list of already spent coupons (so as to reject them if they are presented a second time) or a list of unspent coupons, from which it deletes coupons as they are presented for redemption. When a merchant connects to the issuing computer  110  to redeem the coupons, the issuing computer  110  searches the database  810  to determine if the coupons are valid. Only the valid coupons found in the database  810  may then be redeemed. 
     While the invention has been particularly shown and described with respect to a preferred embodiment thereof, it will be understood by those skilled in the art that the foregoing and other changes in form and details may be made therein without departing from the spirit and scope of the invention.