Abstract:
A service is provided that verifies, repairs, and provides a resale mechanism for electronic merchandise over the Internet. A reseller sends in a request to sell electronic merchandise. The service provider may verify the authenticity of the merchandise. Next, depending on the reseller&#39;s requests, the service provider may verify the electronic merchandise and repair the electronic merchandise if the data is faulty. When the electronic merchandise is ready, the service provider may advertise the merchandise using a method specified by the reseller. Once there is a buyer, the service provider may notify the reseller, a transaction may occur, and the electronic merchandise and copyrights may be transferred from reseller to buyer.

Description:
CROSS REFERENCE TO RELATED INFORMATION 
     This application claims the benefit of U.S. provisional patent application No. 60/165,873, filed Nov. 16, 1999, entitled SYSTEMS AND METHODS FOR RESELLING ELECTRONIC MERCHANDISE by Stuart A. Fraser, Philip M. Ginsberg, Glenn D. Kirwin, and Howard W. Luthick, which is hereby incorporated by reference herein in its entirety. 
    
    
     BACKGROUND OF THE INVENTION 
     The present invention relates to systems and methods for reselling electronic merchandise such as software, music, video, images, etc. 
     With the recent explosion in electronic communication, consumers have begun purchasing and receiving merchandise, such as software, music, video, images, etc., electronically without ever receiving a tangible copy of that merchandise. For example, a consumer that desires to purchase a new song by a musical artist may purchase and download an MP3 format copy of that song using a suitable Internet connection to a World Wide Web site, rather than purchasing and receiving a corresponding compact disc. 
     Unlike merchandise distributed on traditional media, such as records, tapes (e.g., 8 track, cassette, and video), magnetic disks, compact discs, digital video discs, etc., electronic merchandise is extremely vulnerable to damage such as being corrupted, being partially overwritten, being partially erased, etc. Because of this, a purchaser of electronic merchandise may lose valuable property because of a computer “glitch”, virus, or crash. 
     Unlike merchandise distributed on traditional media, electronic merchandise is extremely easy to duplicate, and therefore difficult to verify as being the original and authorized copy of the merchandise, rather than a second, third, fourth, etc., generation and unauthorized copy of the merchandise. The difficulty in verifying authenticity is especially problematic when providing a resale mechanism for “used” electronic merchandise, or when purchasing “used” electronic merchandise, without running a risk of violating applicable copyright laws. 
     Accordingly, it is desirable to provide a service that verifies, repairs, and provides a resale mechanism for electronic merchandise. 
     SUMMARY OF THE INVENTION 
     It is therefore an object of the present invention to provide systems and methods for reselling electronic merchandise. 
     This and other objects of the invention are accomplished in accordance with the principles of the present invention by providing a service that verifies the integrity of electronic merchandise, repairs the electronic merchandise, and resells the electronic merchandise to consumers. 
     Initially, these systems and methods wait for a reseller to make a request to a service provider to resell electronic merchandise such as software, music, videos, images, etc. This request may be made via electronic mail, an on-line form, or any other suitable mechanism. Once the service provider receives a request to resell electronic merchandise, the service provider may ask the reseller to transfer the electronic merchandise to an Internet server and specify whether verification on the electronic merchandise should be performed and whether repair work should also be performed if the data is faulty. If a reseller does not specify whether to verify and repair electronic merchandise, the reseller&#39;s preferences from a previous transaction may be used. Once the data is received by the service provider, the data may be verified for authenticity and the content of the data may also be verified. If the content is damaged, repair work may be done using error correction methods. 
     Once verification and repair work are complete, the service provider may promote the error-free electronic merchandise in several ways. The service provider may advertise the merchandise on an advertising interface, auction the merchandise on a bidding interface, conduct a personal transaction to a person known to the reseller, or any other suitable form of promotion specified by a reseller. If no method of reselling is specified, the reseller&#39;s preferences from a previous transaction may be used. 
     When the service provider is notified of a buyer, the service provider may then notify the reseller of the transaction. The error-free data may then be transferred from the service provider to the buyer. Encryption techniques may be used to transfer the electronic merchandise to the buyer and to prevent the reseller from viewing the electronic merchandise once the transaction between a reseller and buyer is complete. 
     The reselling process ensures that complete and accurate data is transferred from the reseller to the buyer and that the copyright laws are maintained. 
     Further features of the invention, its nature and various advantages, will be more apparent from the accompanying drawings and the following detailed description of the preferred embodiments. 
    
    
     
       BRIEF DESCRIPTION OF THE DRAWINGS 
         FIG. 1  is a block diagram of one embodiment of hardware that may be used to implement the present invention. 
         FIG. 2  is a flow diagram of a process for transferring electronic merchandise from a reseller to a buyer in accordance with one embodiment of the present invention. 
         FIG. 3  is an illustrative display of an on-line form for a reseller to complete in accordance with one embodiment of the present invention. 
         FIG. 4  is a flow diagram of a process for creating a transaction between a reseller and a buyer in accordance with one embodiment of the present invention. 
     
    
    
     DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS 
     An illustrative system  10  for reselling electronic merchandise is shown in  FIG. 1 . As illustrated the service provided by the present invention may be implemented over an Internet server  14 . Internet server  14  may be any suitable device for receiving, storing, and transferring data. Connected to Internet server  14  may be a service provider  16 , which may be responsible for executing the transaction between a buyer  18  and a reseller  12  of electronic merchandise. Service provider  16  may be any suitable device for receiving, storing, and processing electronic merchandise. Reseller  12  and buyer  18  may be home personal computers (PCs) or any other suitable devices. There may be more than one reseller  12  and more than one buyer  18  connected to Internet server  14 , although only one of each has been shown to avoid over-complicating the system. 
     Reseller  12 , buyer  18 , and service provider  16  may each be connected to Internet server  14  by separate communication links  5  or the same communication link  5 . Communication link  5  may be any suitable, bi-directional communication path such as an Internet or network connection. Reseller  12 , buyer  18 , and service provider  16  may be connected by a local area network (LAN), a metropolitan area network (MAN), or a wide area network (WAN). Reseller  12 , buyer  18 , and service provider  16  may be part of separate networks (e.g., LAN, MAN, or WAN), but connected by an internetwork such as the Internet. Reseller  12 , buyer  18 , and service provider  16  may connect to Internet server  14  using a telephone modem, a cable modem, an Ethernet card, an Integrated Services Digital Network (ISDN) adapter, a wireless LAN adapter, a broadband modem, or any other suitable connection device. Communication path  5  may be a copper twisted pair (e.g., CAT 5, 10BASE-T, etc.) a coaxial cable (e.g., 10BASE-2, 10BASE-5, etc.), a fiber optic cable (e.g. 10BASE-F, single mode fiber, multimode fiber, etc.), an antenna and base station, or any other suitable communication path. Depending on the medium through which data is sent, the data may be sent as analog data, digital data, electromagnetic waves, or a combination of the same. The device that bridges reseller  12 , buyer  18  and service provider  16  to communication path  5  may be responsible for converting the data into a form suitable for transmission over the selected communication medium. Data that is sent over Internet server  14  using communication path  5  may employ various technologies for transmitting data such as a T1 carrier, an ISDN connection, a Digital Subscriber Line (DSL), or any other suitable technology for conveying digital data along copper wires (e.g., twisted pair, coaxial cable, etc.) 
     An embodiment of a process  20  for transferring electronic merchandise from reseller  12  to buyer  18  via service provider  16  over Internet server  14  is illustrated in  FIG. 2 . As shown, once process  20  has begun at step  22 , service provider  16  receives a request from reseller  12  to resell electronic merchandise at step  24 . Reseller  12  may request to resell merchandise by sending electronic mail to service provider  16 , by submitting an on-line form on a web page of service provider  16 , or by any other suitable method. 
     For example, in response to a request to resell, service provider  16  may have reseller  12  fill out an on-line form  50  as shown in  FIG. 3 . Reseller  12  may be asked for information such as whether reseller  12  is a new or old customer  52 , the reseller&#39;s biographical information  54 , the type of electronic merchandise to resell  56 , a brief description of the merchandise  58 , the method of reselling  60 , the minimum reselling price  62 , whether the electronic merchandise should be verified or not  64 , whether to repair the electronic merchandise if the data is invalid  66 , the location of the electronic merchandise  68  on reseller  12 , or any other relevant information that pertains to the sale of the electronic merchandise. “Type of Merchandise”  56  may have a pull-down bar in which reseller  12  may select “software”, “music”, “video”, “images”, or “other”. If “other” is selected, reseller  12  may proceed to type in a new category of electronic merchandise not currently listed in the pull-down menu. “Brief Description”  58  may allow reseller  12  to enter in information about the electronic merchandise such as the name of the merchandise, a brief description of the features of the merchandise, and any other relevant information. This information may be displayed during promotion of the electronic merchandise to a potential buyer  18 . “Method of Selling”  60  may also have a pull-down bar in which reseller  12  may select “advertisements”, “auction”, “personal transaction”, or “other”. If “other” is selected, reseller may type in a new method of selling not currently listed in the pull-down menu. “Perform Verification”  64  and “Repair”  66  may have a pull-down bar with an option to select either “Yes” or “No”. “Attach File”  68  may allow reseller  12  to browse for the file location of the electronic merchandise so that the data may be transferred electronically over Internet server  14  to service provider  16  and eventually to buyer  18 . 
     If reseller  12  is new to the service, reseller  12  may be required to fill in new information in all the blanks on form  50 . Upon submission of the form, the new information will then be stored in a database in service provider  16 . However, if reseller  12  has previously used the service, reseller&#39;s information may already be stored in a database in service provider  16 . Reseller  12  may only be required to fill in the blanks marked by an asterisk  70 , which may include “New Customer”  52 , “Name”  54 , “Type of Merchandise”  56 , “Brief Description”  58 , “Method of Selling”  60 , “Perform Verification”  64 , “Attach File”  68 , and any other relevant information. However, if reseller  12  wishes to change his previous settings, reseller  12  may enter in new information, which may replace the information previously stored in the database. Upon completion of the form, reseller  12  may press “Submit” button  72  to send the information to service provider  16 . Or reseller  12  may press “Cancel” button  74  to cancel the current order. 
     There may be several ways to transfer the electronic merchandise data from reseller  12  to service provider  16 . Reseller  12  may use electronic mail to send the file as an attachment. Service provider  16  may access particular electronic merchandise files on Internet server  14  that were placed by reseller  12  using File Transfer Protocol (FTP) server, Hypertext Transfer Protocol (HTTP), or any other suitable method. Service provider  16  may also remotely login to reseller  12  using a user identifier and password to access the files on reseller  12 . During the transfer of files, the data may be encrypted to prevent wire tapping and other methods of obtaining an unauthorized copy of the electronic merchandise. This may be implemented using Data Encryption Standard (DES) or any other suitable encryption technique. 
     Turning back to  FIG. 2 , once service provider  16  has received a request to sell along with an on-line form and a copy of the electronic merchandise at step  24 , process  20  may verify the merchandise. 
     Verification may involve verifying the copyright of the merchandise as well as verifying the content of the merchandise. 
     Copyright verification may take place at step  26 . The different forms of verifying the authenticity of copyrights may include digital watermarking, digital signatures, the International Standard Recording Code (ISRC), or any other method of copyright verification. Digital watermarks may include an identifying code that conveys information that may identify the originator of the merchandise or may identify the recipient of the merchandise. A watermark key or password may be required to extract such watermarks. In addition, watermarks may contain instructions that permit or limit the use of copying, which would be detected by recording devices. Digital fingerprinting is a type of watermark that uses a serial number to identify the owner of the merchandise as well as the recipient. A digital signature may be used in public key cryptosystems (PKCS). The original owner of merchandise uses a private key to generate a unique signature that verifies the authenticity of the merchandise. ISRC is a digitally encrypted code that conveys copyright information relevant to the electronic merchandise. 
     With unique identifying codes, there may be a universal database that maintains a record of all current and prior owners of all electronic merchandise. When service provider  16  receives the merchandise, service provider  16  may extract the code from the watermark, fingerprint, or digital signature and look up the code on the universal database. If the owner of the merchandise listed on the database is not reseller  12 , then service provider  16  may determine that reseller  12  does not have a valid copy of the merchandise and may not permit a transaction to occur. However, if the information indicates that reseller  12  has an authentic copy of the merchandise, a transaction may be permitted to occur and the universal database may update its records to reflect buyer  18  as owning the copyright title to the particular merchandise. 
     At step  28 , the validity of the copyright verification may be checked. If the merchandise is authentic, process  20  may then go to step  30 . However, if the merchandise is a second, third, fourth, etc. generation copy of the merchandise or if reseller  12  still has possession of a copy of the merchandise that was previously sold, process  20  may go to step  42  and no further transaction may occur. 
     Process  20  may next inquire whether to perform a verification function on the merchandise at step  30 . This determination may be based on a specific inquiry made to reseller  12  in response to receiving the request, or based upon information previously provided by reseller  12  to service provider  16 . If reseller  12  has added new information or made changes to the on-line form, service provider  16  may update its database to add the preferences of a new customer or to reflect the new preferences of an existing customer. 
     If the merchandise is to be verified, process  20  may verify the electronic merchandise at step  32 . This function may be performed by service provider  16  using any suitable method known in the art, for example, by comparing the merchandise to known-good merchandise, performing a checksum algorithm, using the cyclic redundancy check (CRC), or any other suitable error-detection method. In comparing the received merchandise with known-good merchandise, the data stream of both may be compared bit by bit. Data errors occurring prior to transmission and during transmission may be detected. Once an incorrect bit has been detected, an error flag may be set and process  20  may move to step  34 . The data may also be compared using a checksum algorithm to compare the total number of bits or using the CRC to check for a remainder. If the number of bits do not agree or there is a remainder, an error flag may be set and process  20  may move to step  34 . However, checksum and CRC algorithms may not always detect errors, and thus alternate and/or additional methods of verifying the content of electronic merchandise may be implemented. 
     Once the merchandise has been verified, process  20  may inquire whether the merchandise is intact at step  34 . If the merchandise is not intact, as may be indicated by an indicator such as a flag generated in step  32 , process  20  may determine whether to repair the merchandise at step  36 . Similar to determining whether to perform verification or not, this determination may be based on information currently requested or previously received from reseller  12 . If a repair is to be made, then the repair may be performed at step  38 . 
     Repairing may be done using any suitable method known in the art, for example, by replacing the faulty portion of the merchandise from a known-good copy, by reconstructing the faulty portion, or by any other suitable error-correction technique. Using the known-good copy, the data stream bits for the entire merchandise may be compared bit by bit using logic operations. Upon finding an incorrect bit, that bit may be inverted (e.g. a “1” bit is inverted to a “0” bit, and a “0” bit is inverted to a “1” bit) and the process continues until all bits have been compared. Another similar method of correcting the data is by comparing packets of data instead of comparing one bit at a time. If the packets do not match, the corresponding packet of bits from the known-good copy replaces the faulty packet of the reseller&#39;s data. Data errors occurring prior to transmission and during transmission may be corrected. 
     Lastly, at step  40 , process  20  may resell the merchandise to buyer  18 .  FIG. 4  shows a process  100  for creating a transaction between reseller  12  and buyer  18 . As shown, once process  100  has begun at step  104 , reseller  12  may select the sale to be performed in any method known in the art, for example, by displaying advertisements on various web sites, by hosting an auction, through a personal transaction, or any other suitable method. If another method is desired, the seller may proceed to type in a new method of selling not currently listed in the menu. 
     Process  100  may retrieve information on the selected selling method at step  106  and may inquire which selling method to implement at step  108 . If the selected form of selling is advertising, process  100  may proceed to step  110  to post an advertisement indicating the name of the electronic merchandise, a brief description of the merchandise, the asking price, contact information, and any other relevant information. The advertisement may be posted on a web page on the service provider&#39;s site, on a general electronic merchandise postings web site, on a banner or pop-up window, or any other suitable advertising medium. Once potential buyer  18  has contacted service provider  16  about the electronic merchandise, process  100  moves to step  112  where service provider  16  notifies reseller  12  of interested buyer  18 . Upon acceptance of the sale, the electronic merchandise may then be transferred from service provider  16  to buyer  18  at step  120  and the transaction process completed at step  122 . 
     If the selected form of selling is through an auction, process  100  may proceed to step  114  to post on a bidding site the merchandise name, a brief description of the merchandise, a minimum bid, contact information, and any other relevant information. A bidding site may be a web page on the service provider&#39;s site, on a general auction web site, or any other suitable bidding medium. At step  116 , the merchandise may be posted for a certain time period, after which time the highest bidder will have the opportunity to purchase the electronic merchandise. Upon receipt of the highest bid, service provider  16  may notify the highest bidder and process  100  may move to step  118  where service provider  16  notifies reseller  12  of interested buyer  18 . Upon acceptance of the sale, the electronic merchandise may be transferred from service provider  16  to buyer  18  at step  120  and the transaction process completed at step  122 . 
     If the selected form of selling is through a personal transaction, process  100  may proceed directly to step  120 , transfer the electronic merchandise from service provider  16  to buyer  18  at step  120 , and complete process  100  at step  122 . 
     After service provider  16  transfers the merchandise to buyer  18 , reseller  12  has lost all rights to the electronic merchandise. In order to prevent reseller  12  from violating copyright laws after delivering merchandise to buyer  18 , encryption techniques may be used at step  120  to insure that once the electronic merchandise is transferred from reseller  12  to buyer  18 , reseller  12  no longer has access to the electronic merchandise. There may be several options for service provider  16  to implement this copyright protection. Encryption software may be utilized to encrypt reseller&#39;s electronic merchandise so that reseller  12  is unable to view or hear the merchandise after reselling it. This encryption may be in the form of inserting extra data or noise to prevent a clear image or sound, placing a password block on the data, scrambling the data so that the data is no longer readable, or any other suitable method. Even if reseller  12  is able to maintain a copy of the merchandise previously sold, reseller  12  may be prevented from trying to resell the same merchandise because of a special identifier code in a watermark or digital signature that is maintained in a universal database. 
     Once the merchandise has been delivered to buyer  18 , and reseller  12  no longer has access to the electronic merchandise, process  20  may complete at step  42 . 
     As can be seen, systems and methods for reselling electronic merchandise are provided. It will be understood that the foregoing is only illustrative principles of the invention and that various modifications can be made by those skilled in the art without departing from the scope and spirit of the invention, which is limited only by the claims that follow.