Patent Publication Number: US-2021174348-A1

Title: Electronic escrow system

Description:
CROSS-REFERENCE TO RELATED APPLICATION 
     This application claims priority from U.S. Provisional Patent Application No. 62/943,497, filed Dec. 4, 2019, titled Electronic Escrow System which is hereby incorporated by reference herein for all purposes. 
    
    
     BACKGROUND OF THE INVENTION 
     1) Field of the Invention 
     The invention relates to dual party and multiparty escrow transactions, and, more particularly to an electronic method of completing and closing transactions that are dependent on closing escrow based on completion of specific terms of the agreement having been met. 
     2) Description of Related Art 
     An escrow is a financial arrangement where a third party holds and regulates payment of the funds required for two or more parties involved in a given transaction such as a home, automobile, or other high value transaction. It can make transactions more secure by keeping the payment in a secure escrow account which is only released when all of the terms of an agreement are met as overseen by the escrow company. 
     Escrows are very useful in the case of a transaction where a large amount money is involved and a certain number of obligations need to be fulfilled before a payment is released like in the case of milestone transactions such as buying a home, purchasing a business, vehicle, electronic systems, jewelry, or hiring technologist to build a software application where the buyer wants confirmation of the quality of work being done before making a full payment, and the seller doesn&#39;t want to do the work without any assurance that they will receive payment. Traditional escrow service is quite cumbersome and requires the services of banks and lawyers. While the payment is ‘In Escrow’ the transaction can be safely carried out without risk of losing money or merchandise due to fraud. This eliminates all legal perils and allows for secure transactions and confident buyers and sellers. 
     The industry currently operates on a paper or paper like system which requires that the escrow agent releases funds to the sellers only when the purchaser has verified that all the terms of the agreement have been met. 
     Because of the amount of manual content in an escrow transaction, a significant cost reduction in the escrow process could be achieved. 
     Therefore, what is needed in the art is a robust, simple, and full featured escrow system. 
     BRIEF SUMMARY OF THE INVENTION 
     The invention in one form is directed to an online escrow system which allows both two party and multiparty transactions to occur online and facilitate a secure transfer of money based on the completion of all the agreed upon terms. 
     An advantage of the present invention is the utilization of a wallet and one-time tokens which allow the buyer to deposit money in their wallet and the escrow system releases the money in the buyer&#39;s wallet upon the agreed to completion of all the terms of the sale using the one-time tokens as a token to provide a secure confirmation. 
    
    
     
       BRIEF DESCRIPTION OF THE DRAWINGS 
       A further understanding of the nature and advantages of particular embodiments may be realized by reference to the remaining portions of the specification and the drawings, in which like reference numerals are used to refer to similar components. When reference is made to a reference numeral without specification to an existing sub-label, it is intended to refer to all such multiple similar components. 
         FIG. 1  is a flowchart of a dual user escrow flowchart; and 
         FIG. 2  is a flowchart of a multi-party escrow. 
     
    
    
     Corresponding reference characters indicate corresponding parts throughout the several views. The exemplifications set out herein illustrate embodiments of the invention and such exemplifications are not to be construed as limiting the scope of the invention in any manner. 
     DETAILED DESCRIPTION 
     Electronic payment systems have been used The prior art has numerous payment systems including U.S. Pat. No. 10,629,026 issued on Apr. 21, 2020 to Arnone, et al., U.S. Pat. No. 10,521,798 issued on Dec. 31, 2019 to Song, et al., U.S. Pat. No. 10,496,979 issued on Dec. 3, 2019 to Taveau , et al., U.S. Pat. No. 9,390,410 issued on Jul. 12, 2016 to Casares et al, U.S. Pat. No. 9,858,576 issued on Jan. 2, 2018 to Song, et al., which are hereby incorporated by reference herein for all purposes. 
     The terms password and passcode are used interchangeably within this specification. 
     The invention can be used to create an escrow-based payment that can be between either two parties or multiple parties to sell and purchase goods or services or online downloads. The term escrow is intended to mean a bond, deed, product, work product or other document kept in the custody of a third party and the transaction taking effect when a specified condition has been fulfilled. The invention may reduce the risk of fraud by acting as a trusted third-party that collects, holds and disburses funds when buyers and sellers are satisfied. The buyer and/or seller may agree to the terms of the transaction, and the invention may then act as the gate keeper to ensure that all terms of the transaction are met prior to allowing transfer of funds from the buyer or seller when applicable one-time tokens have been exchanged. 
     The buyer can submit a payment by an approved payment method to the buyer wallet, and the system verifies the payment. The seller may then be notified that funds have been secured in the buyer&#39;s wallet and the system moves the monies from the buyer&#39;s wallet into the system wallet. This places a control on the transaction and reduces and/or eliminates the possibility of the buyer removing the monies from the buyer wallet. 
     Seller completes the terms of the agreement and, upon verification that the buyer has deposited the correct amount of the funds into the buyer&#39;s wallet, the system authorizes the seller to complete their side of the agreement and submit verification of completion of terms of the transaction. Once the seller&#39;s terms have been verified, and the buyer terms have been verified, the property is released, and the money transferred to the seller&#39;s wallet from the master holding wallet. The invention uses the one-time token to verify the completion of the transaction and initiate final payment. 
     The escrow system can be between two parties or multiple parties to sell and purchase goods or services or online downloads. One embodiment of the invention utilizes secure one-time tokens to verify if parties have completed the terms of the contract. 
     Within the system the following terms are used: 
     Sender meaning buyer (sender of monies) 
     Receiver meaning seller (receiver of monies) 
     Sender pays/receiver pays—asking user that is initiating escrow deal who is responsible to pay for the fees to utilize the system. 
     User/client can be a sender or receiver and is an individual who is using the invention. 
     The system allows a user/client to set up an account were the personal information is stored, as well as payment information. The system allows the user/client to enter name, email, and/or phone number, address and payment methods. The system also facilitates international, individual and merchant transactions by providing a safe electronic payment system. 
     Escrow Days are the timeframe appointed by buyer to complete the deal and retrieve funds. For example, if doing international shipping, the system may force 14 days or more. If the deal is set to a specific length of time, for example 8 days, and is not completed within the 8 days, the escrow funds may become the system property. 
     The system may use any form of payment, including but not limited to, credit card, debit card payments, cash and other forms of electronic delivery such as wire transfer or PayPal and Venmo. 
     The system may be configured to use a code. The code may be alphanumeric, symbols or some combination of alphanumeric and symbols. The code may be of any length, preferably between 2-10 characters and more preferably 4 characters. The code is a single use, i.e., One Time Password (OTT), and may be sent by any acceptable way, including to a mobile number registered to the account, SMS text message (Short Message Service), Multimedia Messaging (MMS), email notification and messenger notifications such as Facebook messenger. 
     A tangible product may include any type of thing, such as commodities, devices, buildings, software, and equipment. Services may use a smart contract and may include something intangible such as management, customer service, maintenance and experiences. The system may be structured to allow for the payment of anything, including products or services. 
     A service may be work done by another person for another individual. For instance, a person will visit a restaurant to have the desired services performed by other people while they relax by their tables. Legal advice is another good example of a service rendered to another person by professional lawyers. 
     When the system refers to accept proof of delivery it may be defined by the buyer and what is acceptable to the buyer, e.g., tracking number, product/software, number or inspection. Sellers may allow buyers to retrieve documents, files, or software programs, including computer games, as a digital download. Users access a specific internet link, e.g., sent in “Remarks” field or by email, allowing them to download the document/file/program. 
     When the system allows a trial version, the trial version may refer to software which buyers can try before they buy. Trial versions of software usually contain all the functionality of the regular version but are typically used for a limited time. 
     When the system refers to a license issued/software license, it is referring to a document, physical or electronic, that provides legally binding guidelines for the use and distribution of software. Software licenses typically provide end users with the right to one or more copies of the software. 
     When the system refers to proof of delivery, that proof may be determined by the buyer and may include what is acceptable to the buyer, e.g., tracking number, product/software number. 
     The system can accommodate any number of users and/or parties to a transaction through use of One-time tokens (OTTs) assigned to each user and/or party. 
     For example, in a two-party escrow, there are two parties. One party is the seller and the other party is the buyer. At least one of the parties should have a system wallet. The invention refers to the system wallet as the wallet, Lock Trust wallet or LT wallet. The wallet or LT wallet allows a user to manage their money with complete accounting at one place. The LT wallet acts like a holding account for all the transactions. The wallet can have 10 or even 100 bank accounts linked to the wallet and the user/client can make payments using the LT wallet. The LT wallet allows the user/client to enter cash transactions and view monthly overview showing a complete view of all transactions. The buyer, i.e., sender, will then search for the specific seller, i.e., receiver, using the receiver&#39;s wallet ID, email or phone number. The system then verifies whose account it is, by showing the receiver&#39;s name, email, and/or phone number. The system may then assign to the sender and/or the buyer, a one-time token to the transaction. This creates a secure one-time token for the escrow transaction for each of the two parties. The one-time tokens (OTTs) for the parties are different and may be used to channel payment or change the terms of the escrow. The next action taken by the sender includes specifying funds or amount for escrow. This amount is then locked from the sender&#39;s wallet balance and transferred to the system wallet or holding account. If the sender&#39;s balance is less than what is needed, the system notifies the buyer/sender. The system may then allow the party to add money from any source, such as a credit card, automated clearing house (ACH), or wire transfer. The system may then permit the release of funds on demand if the buyer/sender is using a credit card and the balance is sufficient to cover the charge. 
     In some cases, the system release of the escrowed item may be delayed if the source used to add money, delays the deposit. For instance, typical ACH and wire transfers can take up to 24 to 96 hours, depending on banking time frame. Once the balance is equal to or greater than the escrow account, then the fees are also transferred to the system. The party that is paying the fees may be set by the sender, and can either be shared or paid in full by one of the parties. 
     Once the escrow basic terms are met, the sender will receive a secure one-time token (OTTs). After successful verification, the sender may have the ability to implement additional terms to escrow, such as an accepted proof of delivery. 
     The escrow is visible to the sender and the receiver once the escrow is setup and the funds are moved from sender&#39;s account to the secured master account on the system. 
     The buyer may then provide a one-time token to the seller once they have received the goods or services which are being transferred. 
     If the transaction is not completed within a specified time, the transaction may be halted, and the monies are retained by the system until the appropriate process occurs to release the money. The process for releasing the funds is defined at the initiation of the transaction by the seller or buyer and includes the following successful completion of the transaction, transaction canceled by the seller, transaction cancelled by the buyer, transaction cancelled due to inadequate funds, transaction canceled due to non-delivery of product or service, etc. The specified time may be any length of time and may be a system requirement, legal or contractual obligation, or a time agreed to by the buyer and seller. 
     The first one-time passcode is linked to the sending account and the escrow transaction, such that the link contains the authorization to access and send funds to the holding account, and the holding account uses the first one-time passcode to credit the funds to the escrow transaction. 
     The second one-time passcode linked to the receiving account and the escrow transaction such that the link contains the authorization to access the received funds from the holding account, and the holding account uses the second one-time passcode to credit the funds to the receiving account wallet from the holding account, and thereby completing the escrow transaction. 
     Referring now to the drawings, and more particularly to  FIG. 1 , there is shown a dual user escrow transaction. The system is initiated when a customer provides an email address, and creates a password, or logs in using an account such as Facebook or google and the customer fills out personal information. Personal information may include uploading proof of address and photo ID thereby providing the system with verification that the customer is the rightful owner of the account. Referring to the escrow structure of the instant invention  103 . The customer can be the buyer  1  or the seller  2 . The invention  1000  for dual user escrow transaction has the buyer  1  with an LT Wallet  100  and the system  1000  has LT Wallet  5  with internal functions  101  and the seller  2  has LT Wallet  102 . The buyer  1  having a LT Wallet  100  creates the escrow deal  10  within the LT wallet system. The buyer  1  then adds seller  2  from his wallet using email, wallet ID or telephone number. In step  11 , the buyer  1  adds Seller from his Wallet using email, wallet ID or Phone. In step  12  the buyer  1  enters the fees and escrow monies information and the Buyer verifies seller&#39;s details: name, email, and telephone number. Escrow deal Step  10  also provides information to Step  13  which has sub steps  13 A,  14  and  15 . Step  13 A includes fees assessed/assigned to either party by buyer  1 , and then notifies step  21  . In step  14 , buyer  1  is notified to add funds if appropriate funds are not available. In step  15  buyer  1  receives a secure code to submit the deal. In step  16 , the system determines if the funds have been added to escrow. If the funds have been moved, then step  16  transfers control to step  51 , monies for escrow: locked from wallet available balance. If funds have not been added, then the system ends the session step  17 . If funds have been added, the system notifies the seller  2 , via Step  13 A, and assesses fees to seller  2  in step  21 , via Step  13 A. If the deal structure is accepted, then the monies for escrow in step  51  are made available to both Users in step  30 . If not accepted, the session is ended step  22 . In step  51 , the system transfers control to the second phase which is the completed deal phase. 
     Referring to the complete escrow and deal section of the instant invention  104 . In step  30 , Escrow Deal available to both Users. The system notifies the seller  2  to deliver the goods and/or services step  31  and moves funds from the buyer&#39;s wallet to the secured master wallet, Step  33 . The buyer then receives the secure one-time token in step  32 . When the buyer receives Goods/Services in step  34 , they send the one-time token to the seller step  35 . Step  51  Monies for Escrow are available, and the monies are locked from wallet available balance. 
     When the seller is notified that the escrow deal is available in step  30  then the seller can deliver the goods or services step  31 . The buyer  1  then sends their one-time token to the seller in step  35  and the buyer&#39;s one-time token is received by the seller  2  in step  37  so that the seller  2  can claim the funds using the seller&#39;s one-time token in step  36 . Step  33  provides the funds for step  36  from the secured master wallet. When the funds have been received by the seller  2 , the system closes the escrow in the funds received in step  38 . 
     Referring to the cancel escrow and deal section of the instant invention  105 . Phase 2: Cancel Deal, begins with the step  40 . The escrow deal is available to the users. The buyer  1  receives a secure one-time token step  41  and the seller decides to cancel step  42 . The buyer will receive the notification and the one-time token to cancel the transaction from the system step  44  and the buyer agrees to cancel and sends the one-time token to the seller  2  step  43 . Step  43  transfers control to step  45  and the seller  2  submits the buyer&#39;s one-time token to release the monies in the secure master wallet step  45 . The buyer then claims funds using the one-time tokens from the seller step  46  and the buyer  1  receives the funds step  47 . The one-time tokens allow the buyer and/or the seller to confirm that a transaction is agreed to by the parties. 
     Referring now to  FIG. 2 , there is shown a multi-party escrow process. If the process is a multi-party escrow, the buyers initiates a multi-party escrow process step  2000 . The buyer  2001 , multi-party  2005  and the seller  2002 . Step  2100  the buyer  2001  initiates the escrow deal within the wallet. Step  2101 , the buyer  2001  provides multi-parties  2005  email address(es) and phone number(s) for the one-time tokens. Step  2102 , the buyer  2001  assigns a task and verification process. Step  2103 , the buyer assigns the fees and fee split if any. For example, the buyers can assign a percentage of the fee to either the buyer or seller as long as the percentage adds up to 100%. An example is the seller  2002  pays 60% of the fees and the buyer  2001  pays 40% of the fees. Fee percentage may be split in any percentage but should generally equal 100% when added together. The system then transfers the fees and escrow funds from the available wallet to the secure master wallet step  2104 . When the deal is approved in step  2105 , the system sends the one-time token to the seller step  2106  and the seller uses the buyer&#39;s one-time token step  2306  to retrieve the funds and the deal is complete step  3000 . If the deal is not approved in step  2105  the system transfers control to step  3000  and the deal is complete. 
     Step  2102  can also transfer control to step  2201  where the product is verified that it meets the specification. This allows the uploading of the relevant files step  2202  and the appraising of goods pricing which is optional step  2203 . Step  2201  also submits the one-time tokens to step  2206  which feeds them to step  2304  and step  2105 . Step  2105  also sends a notification that the fees remitted to the third party  2005 , which was assigned the task to validate the product. In step  2207 , the system sends a notification that the fees have been remitted and completes the third-party assignment step  2208 . 
     Referring to Phase 1 step  2003 , steps  2102  and  2103  provide input for step  2301  which is the processing of the fees. The fees are assigned and if the fees are processed and agreed to successfully, the product is made available step  2302  to the third party  2005 . This provides the notification to step  2201  and the system notifies and withdraws the fees from the available wallet step  2303  and the deal is approved in step  2304 . If the fees are declined, then at step  2301 , control is transferred to deal complete step  3000 . 
     Step  2102  can also send information to step  2201  such as the verify product certification. Step  2201  is the product verification which certifies that the product meets specification Step  2102  also provides product certification to step  2302 . 
     Step  2201  is the product verification and it assembles the certification that the product meets the agreed to specifications. Step  2201  can upload relevant files step  2202 , which can provide the buyer an optional appraisal of goods pricing step  2203 . Step  2201  can also notify buyer and seller of the specification certification step  2204  and notify the buyer and seller of decreased escrow amount  2205 . If the product meets specifications, step  2201  transfers control to step  2206  and the system submits the one-time token to the seller. Referring to Phase 2 step  2004 . A unique aspect of the invention is that step  2206  can transmit the notification that the inspection has been approved to steps  2304  approve deal and step  2105  approve deal. If the deal is not approved, then step  2105  will transfer control to step  3000  deal complete. Referring to Phase 3 step  2005 , if the deal is approved step  2105  sends the one-time token to the seller step  2106  and remits the fees to the third-party step  2207  which then completes the third-party activity step  2208 . 
     Step  2016  also receives input from step  2305  which is the initiation to ship the goods which receives it&#39;s input to ship goods from step  2304 , which is the deal is approved. However, if the deal is not approved, step  2304  transfers control to deal complete step  3000 . Step  2305  also provides input so that the seller can use the one-time token to retrieve funds step  2306 . Which triggers the deal complete step  3000 . 
     It should be understood that while the description generally discusses a single seller and a single buyer, the system may include any number of interested parties. The interested parties may include any individual and/or any entity with an interest in the contract. Furthermore, it is to be understood that regardless of the number of parties, the system is configured to issue one-time tokens to each party as needed to complete the transaction. 
     While this invention has been described with respect to at least one embodiment, the present invention can be further modified within the spirit and scope of this disclosure. This application is therefore intended to cover any variations, uses, or adaptations of the invention using its general principles. Further, this application is intended to cover such departures from the present disclosure as come within known or customary practice in the art to which this invention pertains and which fall within the limits of the appended claims.