Abstract:
The buying and selling of commodities online in a disciplined manner can be initiated by either a prospective buyer or prospective seller in a variety of auction types each of which supports the negotiation of various terms including payment, delivery, quantity and quality. The initiating party registers as either buyer or seller with a central authority and provides requisite information including commodity specification, which may be qualitative as well as quantitative, and desired delivery terms, which may be specified using formats for several basic options. The type of auction is also specified using an option format beginning with a selection from a plurality of basic types determined by direction of price movement, whether the initiating party is a buyer or seller, and related duration constraints. Sale is determined by acceptance of a bid or offer setting an agreed upon price, quantity, delivery and payment terms. Commodity quality may additionally be negotiated and verification offered by provision of a sample either directly between parties or through the central trusted authority and/or an independent laboratory.

Description:
BACKGROUND OF THE INVENTION 
     1. Field of the Invention 
     The present invention relates generally to data processing in cost/price determination, more particularly to an automated electrical financial business practice or management arrangement utilizing data processing in cost/price determination, and most specifically to such a business practice or management arrangement for the conduct of commodity trading utilizing an auction format in which bidding is conducted online. 
     2. General Background 
     Online auctions of various descriptions have recently obtained considerable success consequent the development of the internet infrastructure and its popularization through the world wide web (www) network linking personal and other computers through web sites accessible online, i.e. through the www, which are comprised of software maintained by a server computer and are identified by domain names which constitute the basic www address utilized to access the same. 
     One such online auction, ostensibly the most widely used and known at present, simply permits the representation of goods to be sold by a private party and the entrance of bids by prospective buyers enabling the seller to select the high bid and arrange for delivery. A fee is charged from the seller upon whom the buyer is dependent for delivery without further involvement by the auction house. This online auction is considered particularly successful because the auction house has severely limited liability and cannot lose money so long as the fee charged exceeds the cost of hosting the seller&#39;s data upon its server computer. This system relies upon a grading system which is facilitated by the auction house but conducted by the system users who provide comment upon previous dealings with the seller and in which a new seller has no grade. 
     This type of online auction is considered appropriate for the trading of collectibles which encompasses a wide variety of goods but which is characterized by the type of good concerned: coins, musical recordings, antique dolls or toys, et cetera. The range is limited to collectibles as necessary to provide the self policing required to deter fraud as the auction house assumes essentially no liability for misrepresentation or non-delivery. This type of auction is not appropriate for commodities which are considered to possess several obvious and fundamental differences with the trading of collectibles: collectibles are discrete items while commodities are not; collectibles are bought to be held and/or sold again while commodities are used as material in the production of finished product; collectibles are sold by the piece while commodities are sold by weight and quality. 
     These distinctions are considered to distinguish the trading of commodity over the trading of all finished goods inclusive of new product sold over what is ostensibly the second largest known online auction. The difference between a commodity and finished goods, new or previously owned, is considered fundamental and only online auction systems facilitating the trading of commodities are considered to comprise prior art pertinent to the present invention. Prior art relating to online auctioning of financial instruments is similarly excluded by the basic distinction over the same provided by the physical nature of commodity. 
                                               References Cited            U.S. Pat. #   Inventor   Date   Title               4,677,552   Sibley, Jr.   30 Jun. 1987   International Commodity                    Trade Exchange       5,168,446   Wiseman   1 Dec. 1992   System For Conducting                    And Processing Spot                   Commodity Transactions       5,715,402   Popolo   3 Feb. 1998   Method And System For                    Matching Sellers                    And Buyers                   Of Spot Metals       5,835,896   Fisher et al.   10 Nov. 1998   Method And System                    For Processing                    And Transmitting                   Electronic Auction                   Information       5,950,178   Borgato   7 Sep. 1999   Data Processing System                    And Method                    For Facilitating                   Electronic Auction                   Information       6,151,589   Aggarwal et al.   21 Nov. 2000   Methods For                    Performing Large                    Scale Auctions And                   Online Negotiations                    
Discussion of the References Cited
 
     Sibley, Jr. discloses an ‘international commodity exchange’ which combines local trading exchanges located in at least two different countries with a computer network which provides current trading data from a ‘central exchange host’ to the local exchanges and to a number of ‘user computer terminals’ which subscribe to the local exchange but receive information directly from the central host and which may “transmit data representing bids and offers to any other user terminal around the world and through the local exchanges and the host exchange” (Abstract). The local exchanges must facilitate “computerized trades in markets such as the futures markets, cash market, oil market, stock market, and the securities market” (claim 1) but trading in commodities is also disclosed (claims 8 &amp; 9, various drawing figures). 
     Wiseman discloses a system for trading commodities by subscribers each possessing a ‘trading station’ “electronically coupled to (the) system to form a network” (claim 1), each ‘trading station’ possessing all the means necessary to: display and input data; communicate; transmit a “trading quotation request signal”; decline quotation or transmit “a quotation signal setting forth a bid price and an offer price for the identified commodity, and optionally a volume amount”; receive the quotation; send back a proposal in accordance with the bid or offer terms; receive the proposal; accept a proposal “setting forth a volume amount for the transaction”; and acknowledgement of the acceptance, by alternate parties and with the latter steps or ‘means’ being dependent upon the preceding step or ‘means’. 
     Popolo discloses a “computerized method of assisting remote users in the process of buying and selling spot metals” (claim 1) which automatically converts “dimensions and asking price data entered by a seller to the preferred units of measure of a prospective buyer”. This requires first “storing preferred units for each user”, sending a data entry form to a seller including commodity type, metal dimension, and asking price, “modifying said form to display a set of attributes uniquely associated with the commodity selected by the seller”, storing this data, and after converting into the preferred units, sending a “non-editable version of said entry form” to the buyer. Entrance of a bid by a buyer to the seller and response by the seller to the buyer via electronic mail is also disclosed. 
     Fisher et al. disclose “an auction information transmission and processing system implemented as a computer program within said host and network” (claim 1) including a ‘merchandise database’ with information “descriptive of a lot available for purchase by a customer”, a ‘bid database’ with “information descriptive of a bid”, ‘an auction manager’ in communication with the databases, and an associated ‘bid validator’ which receives bids. The auction manager posts a “descriptive merchandise database” and receives bids which are validated and determines whether each bid is successful. The ‘auction manager’ may also use a set time to open a lot to bids and ‘adjust’ the information in the merchandise database by setting a minimum price for a lot. 
     Borgato discloses a “system for listing and facilitating transactions involving stones categorized by weight and at least one other characteristic relating to the gem” comprising: a ‘host processor’ with a ‘data structure’ for each stone comprised of weight, the characteristic, offer price, and seller ID which arranges the data into a matrix array of categories with automatic comparison yielding the lowest offer price for a category and moving the same into “a primary offer position in the array category”; “a plurality of remote terminals each including a display”; “a data link between said terminals to said host processor” (claim 1); and various means necessary for communication, bidding, and effecting sales whereby the buyer and seller are informed and the stone is removed from the array. 
     Aggarwal et al. disclose a “method for conducting continuous auctions . . . over a computer network . . . comprising the following steps:”
         communicating seller information including an estimated time interval to the next auction decision;   accepting buyer information . . . including a bid price, a bid entry time, a bid duration, and an intended purchase volume; and   dynamically scheduling a next auction through determining a response time . . . said scheduling (being) adjusted in a manner such that buyers are retained in said auction for as lon(g) as (p)possible (claim 1) to which various options are appended and which is essentially repeated in independent claim 17 for a ‘computer program device’ and which is again repeated in independent form in claim 33 including several of the options, i.e. “ascertaining all said buyers for whom said bid price is higher than said asking price” and “adjusting successive estimated time intervals . . . to retain (these) buyers” and “dynamically selecting at least one auction winner” which is further refined and also repeated in independent claim 48 for a “computer program device”, along with repetition of the refinements. A heavy reliance upon the step of “dynamically scheduling a next auction . . . ” is observed as this step alone distinguishes the innovation over the prior art and is also the basis for the more detailed system claimed in four different but essentially repetitive sets of claims.       

     In summary, the prior art is seen to disclose various computer data systems intended to facilitate the making of markets and trading of commodities generally, and specifically including steel, gemstones, and bales of cotton. A system which automatically adjusts in order to retain buyers in the auction for as long as possible is disclosed. Use of regular and reverse auctions are disclosed as is the use of an array for organizing information about a commodity including ‘special characteristics’. Use of subscriber, network, and Internet communications systems are disclosed. Provision for electronic transfer of title is disclosed. Provision for negotiation between buyer and seller via counter offers is disclosed. And the volume, price, and locations involved are all utilized as data transferred between parties. 
     Statement of Need 
     The prior art does not disclose an auction system providing a choice between auction types nor a choice between at least three types of payment and does not specify terms regarding delivery in association with the terms of payment. While incremental auctioning is considered known the choice of ‘English’ or ‘Dutch’, i.e. upward or downward bidding, together with the choice between incremental or open bidding is unknown. The prior art discloses neither receipt and provision of physical specimens though representation and verification by various means are encompassed. The prior art does not disclose the independent testing of specimens for representation of data and does not disclose use of characteristics appropriate to various commodities, organic and inorganic, and does not encompass multiple sets of characteristics appropriate to a plurality of particular commodities. 
     The failure of the prior art to provide an online auction system for commodities which is flexible with regard to the commodity addressed, the type of auction, and the construction of terms from several different options inclusive of both delivery and payment, and the failure to provide for authentification of commodity by sample provision or sample testing is considered to present a distinct and poignant need for an online auction system which provides multiple options with regard to: the type of auction; the particular commodity; construction of terms for delivery and payment; verification of product quality by sample provision or testing; and characteristics selectable in description of particular commodities. 
     SUMMARY OF THE INVENTION 
     Objects of the Invention 
     The encompassing objective of the principles relating to the present invention is the provision of an online auction system suited to the trading of commodities which is flexible with regard to auction parameters. 
     A first auxiliary objective of the principles relating to the present invention is the provision of an online auction system suited to the trading of commodities which is flexible with regard to the type of auction. 
     A first ancillary objective of the principles relating to the present invention is the provision of an online auction system suited to the trading of commodities which is flexible with regard to the bidding direction. 
     A second ancillary objective of the principles relating to the present invention is the provision of an online auction system suited to the trading of commodities which is flexible with regard to the initiator as buyer or seller. 
     A third ancillary objective of the principles relating to the present invention is the provision of an online auction system suited to the trading of commodities which is flexible with regard to open or incremental bidding. 
     A second auxiliary objective of the principles relating to the present invention is the provision of an online auction system suited to the trading of commodities which is flexible with regard to the terms governing sale. 
     A fourth ancillary objective of the principles relating to the present invention is the provision of an online auction system suited to the trading of commodities which is flexible with regard to terms governing delivery. 
     A fifth ancillary objective of the principles relating to the present invention is the provision of an online auction system suited to the trading of commodities which is flexible with regard to terms governing payment. 
     A third auxiliary objective of the principles relating to the present invention is the provision of an online auction system suited to the trading of commodities which is flexible with regard to description of commodity quality. 
     A sixth ancillary objective of the principles relating to the present invention is the provision of an online auction system suited to the trading of commodities which is flexible with regard to the type of commodity in providing multiple sets of characteristics each appropriate to the description of quality of a particular commodity. 
     A seventh ancillary objective of the principles relating to the present invention is the provision of an online auction system suited to the trading of commodities which is flexible with regard to initiator in specification of quality. 
     A fourth auxiliary objective of the principles relating to the present invention is the provision of an online auction system suited to the trading of commodities which is flexible with regard to verification of commodity quality. 
     An eighth ancillary objective of the principles relating to the present invention is the provision of an online auction system suited to the trading of commodities which facilitates the provision of commodity specimens. 
     A ninth ancillary objective of the principles relating to the present invention is the provision of an online auction system suited to the trading of commodities which provides independent laboratory commodity specimen analysis in data available pertaining to commodity quality. 
     A tenth ancillary objective of the principles relating to the present invention is the provision of an online auction system suited to the trading of commodities which facilitates the provision of models of the commodity desired 
     Principles Relating to the Present Invention 
     In fulfillment of the objectives stated above it is considered that a variety of recognizable auction parameters may be presented in the form of alternative options in the tailoring of the auction to the commodity concerned, related particulars, and participant preference. It is first considered that the system must be comprehensive of a plurality of different types or sorts of commodities and that secondly the attributes utilized in specification must be variable with respect to various commodities in order to provide for specification of quality in terms appropriate to each commodity. 
     Quality is a universal but the manner of measuring the same is often particular to the type of commodity and is preferably inclusive of qualitative as well as quantitative modes. The terms of delivery and payment are often associated with the type of commodity and the provision of appropriate options as well as negotiation of those options by prospective buyers and sellers is similarly desirable. The type of auction itself is another parameter which may be varied to facilitate the particular type of commodity involved. The direction of bidding, upward or downward, and the mode, incremental or open, may be selected by an initiator of a bid or offer thereby providing a single online auction system which is comprehensive of all commodity trading and capable of customization by the participants as appropriate to the particular commodity concerned as well as to particular participant preferences. 
     In support of quality verification it is specifically suggested that commodity sample provision be facilitated whereby a prospective seller provides a sample, preferably to the auction house or independent laboratory but alternatively to buyers directly, and that the auction house provide objective testing of the sample provided, preferably by an independent laboratory, and post these results in the commodity auction listing concerned. Qualitative characteristics may also be evaluated by an independent expert or by the buyer in the case of provision of sample to the same. Description of the commodity quality in both quantitative and qualitative aspects by the prospective buyer is also suggested wherein a model of the desired commodity of a desired quality is provided to the prospective sellers. 
     The terms of delivery and payment are options available for negotiation as well. Both the prospective seller and the prospective buyer may select preferred terms of delivery and payment. Terms regarding delivery and payment as well as price, volume, and quality can be negotiated during an auction which is concluded by the agreement on terms between buyer and seller or expiration of a time limit resulting in withdrawal of the offer or bid. Both prospective buyer and seller may set time limits, respectively, on each offer or bid. The matching of terms, moreover, may be automatically recognized by the auction house without prior recognition by the two parties concerned. A prospective buyer or seller may either enter, respectively, a new bid or offer or modify an existing one without recognizing that this matches an offer or bid new or outstanding. The auction house must provide the structure for a forum open to registrants and does not need to be involved with transactions concluded other than in providing all the current requisite information accurately which responsibility may be left largely to the participants but which responsibility is preferably shared by the auction house to the extent of accurately posting offers and bids and de-posting the same when matched or expired. 
     In addition to this updating of a website to which registrants with the auction house have access it is suggested that the auction house utilize electronic mail (e-mail) to inform participants of new postings, either received from the participant or pertaining to a participant&#39;s outstanding offer or bid or indication of interest, in receipt of such postings. The updated web site can be relied upon for this, or e-mail, or facsimile transmission, or personal telephone calls, or short message system (SMS) messages which appear on the display screen of a portable electronic reception device such as a cell phone. A trader in copper ore may like to receive, and pay for the provision of, both new offers and bids concerning copper ore for example while a buyer of raw material for clothing may have no interest in any type or ore of much particular interest in new bids for as opposed to new offers of wool and cotton, for another example, though it is recognized that both buyers and sellers likely have an interest in both bids and offers concerning a given commodity as a means of tracking the market for the same. A buyer with very particular demands for quality or other characteristics which are not generally available may prefer to leave an open bid and while possibly possessing curiosity about other bids is surely most interested in receiving notification of a matching offer as soon as possible. 
     Other advantages and benefits to be realized in fulfillment in the principles relating to the present invention may be appreciated with a reading of the detailed discussion below, especially if made with reference to the drawings attached hereto, further briefly described immediately following. 
    
    
     
       BRIEF DESCRIPTION OF THE DRAWINGS 
         FIG. 1  is a sample representation of an entrance page to an auction house web site facilitating flexible terms commodity trading online in accordance with the principles relating to the present invention. 
         FIG. 2  is a sample representation of a directory of commodity categories maintained by an auction house web site facilitating flexible terms commodity trading online in accordance with the principles relating to the present invention. 
         FIG. 3  is a sample representation of a proposal format to be completed by a prospective buyer or seller of a lot in auction in submission of, respectively, an bid or offer, to an auction house web site facilitating flexible terms commodity trading online in accordance with the principles relating to the present invention. 
         FIG. 4  is a sample representation of a completed proposal by a seller for a simple English auction of a lot of copper submitted to an auction house web site facilitating flexible terms commodity trading online in accordance with the principles relating to the present invention. 
         FIG. 5  is a sample representation of a completed proposal by a buyer for a multiparameter auction lot of wool submitted to an auction house web site facilitating flexible terms commodity trading online in accordance with the principles relating to the present invention. 
         FIG. 6  is a schematic representation of the exchange of samples and models between participants and the online auction house and of the interne connection between the same. 
         FIG. 7  is a sample representation of a lot listing reflecting the proposal by a buyer in  FIG. 6  by an auction house web site facilitating flexible terms commodity trading online in accordance with the principles relating to the present invention. 
         FIG. 8  is a sample representation of the a lot listing in  FIG. 7  by an auction house web site facilitating flexible terms commodity trading online in accordance with the principles relating to the present invention reflecting the addition of two counter offers. 
         FIG. 9  is a sample representation of the lot listing in  FIG. 8  by an auction house web site facilitating flexible terms commodity trading online in accordance with the principles relating to the present invention reflecting the addition of indications by the initiator in response to the two counter offers. 
         FIG. 10  is a sample representation of the lot listing in  FIG. 9  by an auction house web site facilitating flexible terms commodity trading online in accordance with the principles relating to the present invention reflecting modification of a counter offer. 
         FIG. 11  is a sample representation of the a lot listing in  FIG. 10  by an auction house web site facilitating flexible terms commodity trading online in accordance with the principles relating to the present invention reflecting the selection of a winning counter offer. 
         FIG. 12  is a sample representation of a proposal by a seller for a uniparameter progressive decrease auction of a lot of wool submitted to an auction house web site facilitating flexible terms commodity trading online in accordance with the principles relating to the present invention. 
         FIG. 13  is a sample representation of a lot listing reflecting the proposal by a seller in  FIG. 12  by an auction house web site facilitating flexible terms commodity trading online in accordance with the principles relating to the present invention. 
       
         
           
                 
               
                 
                 
               
             
                 
                     
                 
                 
                   NOMENCLATURE 
                 
                 
                     
                 
               
               
                 
                     
                 
               
            
             
                 
                   10 
                   web page 
                 
                 
                   11 
                   registration access means 
                 
                 
                   12 
                   directory access means 
                 
                 
                   13 
                   listing 
                 
                 
                   15 
                   subscription access means 
                 
                 
                   16 
                   open offer 
                 
                 
                   17 
                   open bid 
                 
                 
                   19 
                   proposal access means 
                 
                 
                   20 
                   directory 
                 
                 
                   21 
                   commodity category 
                 
                 
                   22 
                   subdirectory 
                 
                 
                   23 
                   proposal 
                 
                 
                   25 
                   entry field 
                 
                 
                   26 
                   counter offer 
                 
                 
                   27 
                   counter bid 
                 
                 
                   29 
                   proposal format 
                 
                 
                   30 
                   terms 
                 
                 
                   31 
                   quantity 
                 
                 
                   32 
                   delivery terms 
                 
                 
                   33 
                   payment terms 
                 
                 
                   35 
                   quality specification 
                 
                 
                   36 
                   offer indication 
                 
                 
                   37 
                   bid indication 
                 
                 
                   39 
                   price indication 
                 
                 
                   50 
                   scheduling 
                 
                 
                   51 
                   schedule dates 
                 
                 
                   52 
                   commencement 
                 
                 
                   53 
                   conclusion 
                 
                 
                   55 
                   sample dates 
                 
                 
                   56 
                   sample 
                 
                 
                   57 
                   model 
                 
                 
                   59 
                   test results 
                 
                 
                   60 
                   auction house 
                 
                 
                   61 
                   laboratory 
                 
                 
                   62 
                   commercial transport 
                 
                 
                   63 
                   registrant 
                 
                 
                   65 
                   internet 
                 
                 
                   66 
                   prospective seller 
                 
                 
                   67 
                   prospective buyer 
                 
                 
                   69 
                   server computer 
                 
                 
                   70 
                   web site 
                 
                 
                     
                 
               
            
           
         
       
     
    
    
     DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENT 
     With reference to  FIGS. 1 &amp; 6  it is first considered that the user of a system in accordance with the present invention may visit a web site  70  maintained by an auction house  60  facilitating online auction of commodities possessing a web page  10  possessing registration access means  11  for registration with the system and further providing directory access means  12  to a directory  20 , as depicted in  FIG. 2 , of commodities encompassed by the system which may be restricted in access to registrants or not as desired and which provides access to individual listings  13 , as depicted in  FIGS. 7-11  &amp;  13  comprised of open offers  16  and open bids  17  for a specified lot of a particular commodity. 
     The business method presented herein is intended to operate at a profit and it is recommended that fees be charged for registration and subscription. In addition or alternatively, however, it is suggested that fees be charged of either the prospective seller  66  and or prospective buyer  67  only in consequence of a sale in which case the fee may readily be assessed as a percentage thereof and no registration or subscription fees are necessary. Registration, moreover, may be required only of prospective sellers  66  in which case access to the listings  13  is preferably gained directly through the directory  20  by selecting a particular commodity category  21  which is inclusive of at least one specific commodity. It is also preferred that listings  13  pertaining to a particular area of interest including selection of at least one particular specific commodity category  21 , as seen in  FIG. 2 , be directly sent via e-mail to subscribers for this service which preferably requires registration and payment. 
     Subscription access means  15  are hence preferably available, as depicted in  FIG. 1 , on a web page  10  of the web site  70 , represented in  FIG. 6 , maintained by the auction house facilitating online flexible terms commodity auctions in accordance with the principles relating to the present invention. Listings  13  and/or other data other are preferably accessible only to registrants  63  or subscribers which are, for purposes of simplicity, encompassed by registrants  63  in the representation of the system or business arrangement represented in  FIG. 6 . 
     Someone interested in placing an open offer  16  for a lot of copper ore, for example, in order to complete a proposal  23  as depicted in  FIG. 4 , might first go to the web page  10  represented in  FIG. 1  and select the directory access means  12  leading to a directory  20  such as that depicted in  FIG. 2  which might either have copper or ore as a commodity category  21  which might further lead to a subdirectory  22 , such as the one entitled ‘COPPER-ORES’ further seen in  FIG. 2 , which contains the specific commodity category  21  ‘CHALCOPYRITE’ as seen therein which selection yields access to the listings  13  current for this exemplary specific commodity category  21  and which additionally might provide access to the execution of a proposal  23  such as those depicted in  FIGS. 4 &amp; 5  for the entrance of an open offer  16  or open bid  17  for a lot of copper ore which is preferably first compared by the system with any listing  13  containing outstanding open bids  17  or offers  16  in order to identify matches meeting or near matches nearly meeting the terms  30  set forth prior to creation of a new listing  13 . 
     Alternatively to going through the directory  20  and identifying a particular specific commodity category  21  as a means of gaining access to the execution of a proposal  23  this access may be provided directly by selecting proposal access means  19  as depicted in  FIG. 1  which would yield a proposal format  29 , as seen in  FIG. 3 , for completion in entrance of a proposal  23 . In this case the specific commodity category  21  must be entered while this would preferably be automatically entered by the system in the case described above wherein the proposal access means  19  includes the directory  20 . Other entry fields  25  in the proposal format  29  may also be automatically entered by the system dependent upon previously entered information. 
     The entry field  25  for bid/offer, for example, could be previously determined by splitting the proposal access means  19  into two: bid or offer, i.e. buy or sell. And most of the other entry fields  25  represented including those for currency, location, and other delivery terms  32  and payment terms  33 , might be default selections which are automatically entered by the system upon recognition of a registrant&#39;s identity, if desired. Entry fields  25  for quantity  31 , final use, origin, type of auction, and most particularly, price  39 , are generally expected to require entry of information in completion of the proposal  23  as necessary for entrance of the same resulting in a new listing  13 . But not every entry field  25  seen in the proposals  23  or proposal format  29  depicted in  FIGS. 3 ,  4 ,  5  &amp;  12  is necessary nor, moreover, are the fields seen therein considered to be complete with regard to all the entry fields  25  which might be useful in the definition of a new listing  13 . The proposals  23  and the proposal format  29  depicted are exemplary with regard to the approach of a preferred embodiment of the principles relating to the present invention wherein flexibility with regard to all aspects of commodity trading online is facilitated. Many of the entry fields  25  depicted consist of multiple options which define a flexible but disciplined platform for the conduct of online commodity auction. 
     The proposal format  29  depicted in  FIG. 3  is less detailed than the proposals  23  depicted in  FIGS. 4 ,  5  &amp;  12  and is representative of a generic proposal format  29  which, with specification of the specific commodity category  21 , is preferably expansible to include other, or modify existing, entry fields  25 . The proposal format  29  depicted has only one entry field  25  for quality specification  35  other than origin while both the completed proposals  23  reflect use of multiple entry fields  25  for quality specification  35 : percentage Cu, Au &amp; Ag as well as hardness and density variation in the case depicted for chalcopyrite, which is the most widely traded type of copper ore, and fiber fineness, percentage vegetal matter, and fiber length distribution for scoured wool fleeces, which is the most commonly traded type of wool. The origin is considered a basic general indicator of quality useful for virtually any commodity. 
     Quality is considered to be comprised of different characteristics dependent upon the specific commodity category  21  concerned. Copper ore and wool are merely chosen as examples which emphasize this observation. One might suppose that quantity  31 , price  39 , and identification of the specific commodity category  21  would be sufficient but quality remains, in contrast to identification, a largely subjective determination for which reason it is considered desirable in many cases to provide the prospective buyer  67  with a sample  56 , as schematically represented in  FIG. 6 , preferably obtained from a prospective seller  66  via the online auction house  60  as depicted therein but which optionally might be directly provided by a prospective seller  66  to prospective buyer  67 . Testing by an independent laboratory  61  will enable posting of test results  59 , i.e. quantitative data regarding quality, which can supplant sample  56  provision. Qualitative data can also be provided in the form of photographs or other graphic attachments accessible from the listing  13  or in the samples  56  provided to a prospective buyer. 
     In addition to the various options provided for ascertainment of quality the ability to select the type of auction itself is considered. It is first noted in connection with this aspect that either a prospective seller  66  or a prospective buyer  67  may initiate the auction of a specified lot with a new listing  13  presenting an open offer  16  or open bid  17  beginning with the same proposal format  29  in which offer or bid must be specified. As a matter of practice the type of auction available is related to this fundamental. Theoretically any auction is governed by several readily defined parameters: (a) direction, either upward or downward; (b) amount, open or incremental; and (c) duration, open or constrained, which present eight different cases which may further be viewed as sixteen different cases depending upon whether the initiator is a prospective seller  66  making an open offer  16  or a prospective buyer  67  making an open bid  17 . 
     In practice it makes little sense for bidding on an open offer  16  to be downward and open with respect to amount and duration though incremental decrease in pricing constrained by a minimum acceptable bid is considered a practical case. In corollary, it makes little sense for offering on an open bid  17  to be upward and open with respect to amount and duration though incremental increase in pricing constrained by a maximum acceptable offer is considered a practical case. Upward, constrained bidding and downward, constrained offering are also considered nonsensical which leaves six practical options as summarized in Table 1 below: 
     
       
         
               
             
               
               
               
             
           
               
                 TABLE 1 
               
             
             
               
                   
               
               
                 Basic Auction Types 
               
             
          
           
               
                   
                 Open Offer 
                 Open Bid 
               
               
                   
                   
               
               
                   
                 Upward, Open,  
                 Downward, Open,  
               
               
                   
                 Unconstrained Bidding 
                 Unconstrained Offering 
               
               
                   
                 Upward, Incremental,  
                 Downward, Incremental,  
               
               
                   
                 Unconstrained Bidding 
                 Unconstrained Offering 
               
               
                   
                 Downward, Incremental,  
                 Upward, Incremental,  
               
               
                   
                 Constrained Bidding 
                 Constrained Offering 
               
               
                   
                   
               
             
          
         
       
     
     This discussion recognizes variation of only one parameter: price  39  with respect to time. The price  39  may go up or down, the amount by which it proceeds may be open or incremental, and a minimum or maximum price  39  imposed or not. It is assumed that all other parameters are constant. In a preferred embodiment in accordance with the principles relating to the present invention other auction parameters may also be varied including: quantity  31  or size of the lot; delivery terms  32 ; payment terms  33 ; and quality specification  35 . The type of auction conducted is considered to be either basic, i.e. uniparameter, or complex, i.e. multiparameter, depending upon whether price  39  with respect to time is the only parameter which is variable or not. As demonstrated below in discussion of an example represented in  FIGS. 7-11  a complex or multiparameter auction not only enables more than one auction parameter, i.e. price  39 , to be varied but also enables price  39  as a function of time to vary upward or downward. Negotiation is further facilitated by offer and bid indications  36 ,  37  which essentially comprise secondary choices with regard to the primary position for each parameter, i.e. group of terms  30  that is variable. 
     In general, at least two options are recognized for each of the auction parameters which may be varied. The delivery date can be advanced or retarded, the quantity  31  decreased or increased, and delivery terms  32  may be varied with respect to how and where. Payment terms  33  can include: (a) letter of credit; (b) payment×days after invoice; (c) payment×days after delivery; (d) cash upon delivery; (e) cash against documents, i.e. title; and letter of credit×days after delivery. And quality specification  35  may be varied with respect to what is desired and how it is ascertained which is facilitated by the optional use of samples  56  and its converse, models  57 , which are examples provided by the initiator of an open bid  17 . Parties making an open offer  16  or counter offer  26  may provide a sample  56 . In the case that the auction of given lot is initiated by an open offer  16  no models  57  are anticipated. If, however, the auction is initiated by an open bid  17  models  57  may be provided and/or samples  56  requested. 
     It is further considered necessary that an auction house  60  facilitating flexible term online trading of commodities receive all samples  56 , evaluate the same, and/or forward actual samples  56  to the prospective buyers  67 . A sample  56  provided by the prospective seller  66  may simply be evaluated, preferably by an independent laboratory  61 , and the test results  59  provided as data by the auction house  60  online to the prospective buyers  67  and other registrants  63 . If, alternatively, samples  56  are to be provided to the prospective buyers  67  it is considered that the auction house  60  has two options regarding distribution. Either one sample  56  provided by the prospective seller  66  is divided up, proportionally, between the prospective buyers  67  or a discrete number of samples  56  is provided to the auction house  60  and distributed to prospective buyers  67  after being ‘esteemed’ i.e. evaluated as possessing substantially uniform quality. Esteemed or proportional distribution of the samples  56  to the prospective buyers  67  by the auction house  60  provides a warranty regarding authenticity further supported or supplanted by test results  59  from an independent laboratory  61 . The provision of samples  56  or models  57  between parties is preferably conducted by utilization of conventional, commercial transport  62  as depicted in  FIG. 6 . 
     In consideration of the options available, two basic cases are recognized, open offer  16  or open bid  17 . The first does not admit of models  57  and is hence simpler. Either a sample  56  is provided or not. If so it may be for testing only. Or it may be made available to prospective buyers  67  in which case the sample  56  provided by the prospective seller  66  is either esteemed or proportionally distributed. In either case testing may also be provided by the auction house with results posted in the listing  13  and/or provided to registrants. Table 2 below summarizes the six different options in this case as read along the bottom line. 
     
       
         
               
             
               
               
               
               
               
             
               
               
               
               
             
               
               
               
               
               
             
               
               
               
               
               
               
               
             
           
               
                 TABLE 2 
               
               
                   
               
               
                 Sample Options in an Open Offer 
               
               
                   
               
             
             
               
                   
               
             
          
           
               
                 Sample? 
                   
                 Yes 
                   
                 No 
               
             
          
           
               
                 Available? 
                 Yes 
                 No, Testing  
                   
               
               
                   
                   
                 Only 
                   
               
             
          
           
               
                 Distribution? 
                 Esteemed 
                 Proportional 
                   
                   
               
             
          
           
               
                 Testing Also? 
                 Yes  
                 No 
                 Yes 
                 No 
                 Testing  
                 No  
               
               
                   
                   
                   
                   
                   
                 Only 
                 Sample 
               
               
                   
               
             
          
         
       
     
     In the case of an open bid  17  wherein a model  57  may also be provided the number of options, increases to nine as seen in Table 3 below. The model  57  provided is handled in a similar manner as the sample  56  as it may be esteemed or proportionally distributed but testing of a model  57  is not considered useful. Testing of samples  57  may be provided if required or the samples  56  forwarded to the bidder, i.e. a prospective buyer  67 , which leaves three final options independently of the options regarding a model  57 . 
                                                                                                                                 TABLE 3               Model &amp; Sample Options in an Open Bid                                Model?   Yes   No            Distribution?   Esteemed   Proportional       None            Sample?   Yes   No   Yes   No   Yes   No            To Bidder?   Yes   Test    No   Yes    Test    No   Yes   Test    No               Only           Only           Only                        
In combination of the two basic options, bid  16  or offer  17 , a total of fifteen options are recognized:
     1. Open Offer; Sample Provided; Sample Available; Esteemed Distribution, With Testing.   2. Open Offer; Sample Provided; Sample Available; Esteemed Distribution, No Testing.   3. Open Offer; Sample Provided; Sample Available; Proportional Distribution, No Testing.   4. Open Offer; Sample Provided; Sample Available; Proportional Distribution, With Testing.   5. Open Offer; Sample Provided for Testing Only.   6. Open Offer; No Sample.   7. Open Bid; Model Provided; Esteemed Distribution; Sample Required, Sample Provided to Bidder.   8. Open Bid; Model Provided; Esteemed Distribution; Sample Required, Sample Tested.   9. Open Bid; Model Provided; Esteemed Distribution; Sample Not Required.   10. Open Bid; Model Provided; Proportional Distribution; Sample Required, Sample Provided to Bidder.   11. Open Bid; Model Provided; Proportional Distribution; Sample Required, Sample Tested.   12. Open Bid; Model Provided; Proportional Distribution; Sample Not Required.   13. Open Bid; No Model Provided; Sample Required; Sample Provided to Bidder.   14. Open Bid; No Model Provided; Sample Required; Sample Tested.   15. Open Bid; No Model Provided; Sample Not Required.   
     A major portion of the significance of this exercise in delineating the various options available regarding the provision of samples  56  and/or models  57  with or without testing is its basis for the development of scheduling  50  which is effected with the use of schedule dates  51  including commencement  52 , conclusion  53  and model and sample dates  55 , as depicted in  FIG. 7 , for the actions which will govern the auction. Simply put, the more actions included, the more complex becomes the scheduling  50 . The most complex scheduling  50  will be for an open bid  17  in which a model  57  is provided, samples  56  are required, and testing by an independent laboratory  61  for the posting of test results  59  is further utilized. A delay must be recognized for:
     (a) provision of the model  57  by the prospective buyer  67  to the auction house  60 ;   (b) provision of the model  57  by the auction house  60  to the prospective sellers  66 ;   (c) provision of a sample  56  by the prospective sellers  66  to the auction house  60 ;   (d) provision of the samples  56  by the auction house  60  to the prospective buyer  67  and/or to a laboratory  61  for testing.
 
The simplest scheduling  50  is for an open offer  16  in which no sample  56  is provided or an open bid  17  in which no model  57  is provided and no sample  56  is requested. All the other cases are of intermediate complexity with regard to scheduling  50 .
   

     The system, i.e. business method or arrangement, facilitating online auction preferably determines scheduling  50  based upon the options chosen by the initiator of the open offer  16  or open bid  17  and the number of respondents to the same whereby scheduling  50  becomes dynamic. If an open offer  16  or open bid  17  is met with zero response within a given time frame the auction might simply be cancelled as the number of respondents failed to meet a predetermined number required for proceeding. Alternatively, in an incremental price  39  auction the progressive increase in bidding, or the progressive decrease in offering price  39  might be accelerated by skipping one or more scheduled increments. If an open offer  16  provides samples  56  available to prospective buyers  67  but none are interested in receiving the same the auction might be cancelled. Similarly, if an open bid  17  provides a model  57  but no prospective sellers  66  express an interest in receiving the same within a given time frame the auction could be cancelled in consequence. A schedule date  51  is set for the conclusion of each step and pursuit of the next step is preferably dependent upon completion of the prior step, as determined by either a predetermined time or threshold response level. 
     Similarly, these deadlines or scheduling dates  51  may be advanced in consequence to prompt response from a sufficient number of prospective buyers  67  or sellers  66 . In other words, rather than scheduling  50  in accordance with chronological thresholds dynamic scheduling  50  based upon strength of response is considered practical. It is hence suggested that threshold numbers reflecting the minimum or maximum response considered appropriate for commencing the next stage of the auction be set and used to trigger conclusion of one step and commencement of the next. It is also suggested that the provision of models  57  and/or samples  56 , if utilized, be associated with these threshold numbers which may further be utilized as triggers for schedule dates  51  when met. A prospective buyer  67  can provide a model  57  in a fixed number of pieces and set a maximum period during which the models  57  are available. After receiving the fixed number of pieces of the model  57  the auction house  60  can put a listing  13  up offering the models  57  for the maximum period set along with the proviso that a fixed number of model  57  pieces are available and that the offer is terminated with exhaustion of those. Samples  56  being offered may be similarly handled as well as requests for samples  56 . 
     Other auction parameters are also variable as discussed briefly above and in relation to detailed examples described below. In brief, however, any given proposal  23  must first be completed, including specification of all required parameters governing the scheduling  50  of the auction, and submitted to the auction house  60  facilitating flexible term online auctions of commodities preferably as discussed above: either by e-mail or other form of notification or in a visit to the web site  70  maintained by the auction house  60 . From the submission of this proposal  23  to the conclusion of the auction of the specified lot it is preferred that the online auction house  60  control, through software maintaining the website  70  on a server computer  69  accessible through the interne  65 , all information exchange between parties involved in a given online auction. And it is preferred that provision, through conventional means including service personnel and commercial transport  62 , of all the models  57  and samples  56  involved be made by that auction house  60 . 
     A listing  13  for a multiparameter auction of a specified lot is seen in  FIG. 7  for an open bid  17  resulting from the completed proposal  23  depicted in  FIG. 5 , depicted as it might appear on the web site  70  represented in  FIG. 6 , or in e-mail notification of subscribers and/or registrants  63  preferably consisting of prospective sellers  66 . The auction type is multiparameter, the specific commodity category  21  is scoured wool fleeces, and scheduling  50  inclusive of sample dates  55  for receiving and sending out samples  56 , along with posting testing results  59 , commencement  52  and conclusion  53  of the auction are all seen in an upper portion of the listing  13 . In the lower portion of the listing  13  the quantity  31  desired is seen to be 14,000 kg, a quality specification  35  is given by a desired origin in Australia, a fineness of 22 microns, no more than 0.3 percent vegetal matter and a fiber length distribution as represented in an attachment which conveys graphic material. Delivery terms  32  are seen to specify free port, a delivery date, and location while desired payment terms  33  are seen to be 90 days from invoice at a price  39  of 3.2 Euros per kilogram. A last update time is further given toward the bottom and the current time may also be added. It is further suggested that time be expressed in Greenwich Mean Time (GMT) for sake of simplicity in international commerce. 
     In  FIG. 8  this open bid  17  is seen to have been responded to by two counter offers  26  which vary from the desired terms  30  in a plurality of areas: the quality specification  35 , the payment terms  33  and the quantity  31 . A second counter offer  26  is offering a greater quantity  31 , 20,000 kg, which is of a lesser quality specification  35  in being coarser and having more vegetal matter than desired by the open bid  17 , at a lower price  39 , i.e. 3.1 euros/kg but requesting letter of credit in the payment terms  33 . A first counter offer  26  is seen to match more closely the terms  30  desired as the quantity  31  is the same and the quality specification  35  is met but the payment terms  33  specify a price  39  of 3.4 euros/kg due 30 days from invoice instead of 3.2 euros/kg and 90 days specified by the open bid  17 . 
     In  FIG. 9  the prospective buyer is seen to have responded to the two counter offers  26  with a bid indication  37  regarding payment terms  33 . 3.35 euros/kg is indicated as acceptable rather than the 3.4 euros/kg of the first counter offer  26  while a counter bid  27  of 2.95 euros/kg is indicated as acceptable rather than the 3.1 euros/kg of the second counter offer  26 . Furthermore, rather than a letter of credit proposed by the second counter offer  26  cash on delivery is indicated as acceptable and 60 days from invoice date is indicated as acceptable rather than the 30 days requested by the first counter offer  26 . 
     It is noted that in the case of an open offer  16  counter bids  27  are made in response and offer indications  36  can be made by the prospective seller  36 . Whether initially made, or made in response to the initial offer or bid, or made in response to that response, an offer is an offer and a bid is a bid. An initial bid is known herein as an open bid  17  as an initial offer is known as an open offer  16 . Similarly the responses made by prospective sellers  66  or prospective buyers  67 , respectively, in offering and bidding on the open bid  17  or the open offer  16  are known herein as counter offers  26  and counter bids  27 . And responses to these counter offers  26  and counter bids  27  by the party initiating the auction with a listing  13  are known as bid indications  37  and offer indications  36 . 
     These bid indications  37  are seen in  FIG. 10  to have been responded to with modification of the payment terms  33  contained in the second counter offer  26  with a decrease from 3.1 to 3 euros/kg while the first counter offer  26  has remained static but the bid indication  37  represents a compromise in payment terms  33  by indicating that 45 days from invoice date would be acceptable rather than the 60 days previously requested. 
     Selection of the first counter bid  26 , and agreement to the terms  30  depicted therein by underlining is seen in  FIG. 11  which signifies the conclusion of this online auction of the specified lot of 14,000 kg of scoured wool fleeces having the quality specification  35  initially desired at a price  39  of 3.35 euros/kg due 30 days from the invoice date, compared with the 45 days indicated previously, which constitute the payment terms  33  negotiated online by use of counter offers  26  and bid indications  37 . 
     Most significantly perhaps, with regard to a preferred embodiment of the principles relating to the present invention, the example detailed above with reference to  FIGS. 7-11  illustrates the flexibility in terms  30  enabled. Payment terms  33  including price  39  and due date were negotiated in selecting a winning offer while quantity  31  and quality  35  as well as payment terms  33  were negotiated in the second counter offer  26 . Delivery terms  32  were not negotiated as both counter bids  26  tacitly accepted free port delivery in London by the date requested. 
     The price  39  negotiated, moreover, reflected use of both upward and downward offering in response to the initial open bid  17 . By allowing variation in other auction parameters including quality specification  35 , payment terms  33 , and quantity  31  the fundamental nature of the auction is considered to have been affected as both directions of price  39  as a function of time are enabled. The fundamental auction types discussed above in relation to Table 1 are hence seen to be broadened in an unexpected manner. And while each fundamental auction type described therein is considered applicable, if desired, in defining a uniparameter type auction a multiparameter auction in accordance with a preferred embodiment of the principles relating to the present invention is considered to be inherently unrestricted by these fundamental auction types. 
     An example of a uniparameter online auction in accordance with the principles relating to the present invention is represented in  FIG. 13  wherein a listing  13  resulting from the proposal  23  depicted in  FIG. 12 , by a prospective seller  66  for a lot of a quantity  31  specified as 14,000 kg of a specified commodity category  21  of scoured wool fleeces is offered in a uniparameter progressive decrease auction with an initial offer price  39  of 3.6 euros/kg. A quality specification  35  of 0.3% vegetal matter, 22 micron fineness, origin Australia, is given along with delivery terms  32  specifying delivery in London as a free port on Nov. 30, 2001 and in addition to the price  39 , which as a function of time is the only variable in the auction, the payment terms  33  being specified as cash on delivery. It is further seen that requests for samples  56  must be received by Nov. 10, 2001 which will be available along with test results  59  from an independent laboratory  61  on Nov. 15, 2001, and that, in addition to these schedule dates  51  scheduling  50  further includes a commencement date  52  of Nov. 20, 2001, 13:00 GMT and a completion date of Nov. 20, 2001, exact time unspecified as is the minimum acceptable price  39 . 
     It is understood that in a progressive decrease open offer  16  must be a minimum acceptable price  39 , for the same reason there is a maximum acceptable price  39  for a progressive increase open bid  17 , as discussed earlier in relation to the fundamental auction types of Table 1. A maximum price  39  on a progressive or open increase open offer  16  and a minimum price  39  on a open bid  17  have similarly been considered to be nonsensical and the six fundamental types of auction set forth in Table 1 above are considered to comprise the most practical for a uniparameter auction in which price  39  as a function of time is the only variable. In a progressive decrease open offer  16  or a progressive increase open bid  17  the minimum and maximum prices  39  are preferable undisclosed in the listing  13  but this need not be the case and, while not depicted in the figures attached hereto, it may be considered desirable to make these constraints known to the participants. 
     It is noted in connection with the open offer  16  depicted in  FIG. 13  that an auction resulting therefrom is considered exemplary of the constraints imposed by selection of a uniparameter auction which may be any of the six fundamental types defined above in relation to Table 1. To with, both samples  56  and models  57  are available options as is the posting of test results  59 . The scheduling  50  is, as discussed earlier, determined by the inclusion of these options along with other information provided by the initiator of the listing  13  including the delivery date which provides an outer boundary to the completion date  53 . The commencement date  52  is bounded on the inside by the availability of samples  56 , if available or required, and/or the posting date of the test results  59 . The availability date of models may also constrict the commencement date  52  which is otherwise limited by the submission date of the proposal  23  at minimum. 
     Finally, with regard to the scheduling  50  of the auction of the lot of scoured wool fleeces depicted in  FIG. 13 , it is noted that a progressive decrease auction, or a progressive increase auction, utilizes incremental decrease or increase in price  39  as a function, preferably of time and further preferably as a linear function of time though dynamic scheduling  50  as previously discussed above is also considered suitable. In the preferred uniparameter auction resulting a progressive incremental decrease in price  39  as a linear function of time of, for example, 0.005 euros/kg every five minutes might be specified beginning from the initial price  39  of 3.600 euros/kg. The auction is concluded by a prospective buyer  66  placing a bid upon the lot at any time or reaching the minimum acceptable price  39 , posted or not, before a bid is placed. If, after fifty minutes, no bid has been placed the price  39  will be 3.35 euros/kg. After another fifty minutes, if no bid has been placed, the price  39  will be 3.1 euros/kg. which is approximately what might be anticipated as a minimum acceptable price  39  for the lot  15 .