EXHIBIT 1005
`
`EXHIBIT 1005
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`

`
`(19) United States
`(12) Patent Application Publication
`Brett
`
`(10) Pub. No.: US 2002/0023041 Al
`Feb. 21, 2002
`(43) Pub. Date:
`
`I lllll llllllll II llllll lllll lllll lllll lllll 1111111111111111111111111111111111
`US 2002002304 lAl
`
`(54) COMPUTER CONTROLLED PRIORITY
`RIGHT AUCTIONING SYSTEM
`
`(52) U.S. Cl. ................................................................ 705/37
`
`(75)
`
`Inventor: Kenton F. Brett, Indianapolis, IN (US)
`
`(57)
`
`ABSTRACT
`
`Correspondence Address:
`ICE MILLER DONADIO & RYAN
`Box 82001
`One American Square
`Indianapolis, IN 46282-0002 (US)
`
`(73) Assignee: ITA Investments, LLC,
`
`(21) Appl. No.:
`
`09/778,606
`
`(22) Filed:
`
`Feb.7,2001
`
`Related U.S. Application Data
`
`(63) Continuation-in-part of application No. 09/586,927,
`filed on Jun. 5, 2000, which is a continuation of
`application No. PCT/US00/03136, filed on Feb. 7,
`2000, which is a continuation-in-part of application
`No. 08/862,547, filed on May 23, 1997, now Pat. No.
`6,023,685, which is a non-provisional of provisional
`application No. 60/018,211, filed on May 23, 1996.
`
`Publication Classification
`
`(51)
`
`Int. Cl.7 ..................................................... G06F 17/60
`
`An automated priority right auctioning system receives and
`evaluates bid information records received from a plurality
`of remote terminals. The bid information records correspond
`to bids for one or more priority rights. The automated
`priority right auctioning system includes a memory storing
`a plurality of previously accepted bid information records,
`the previously accepted bid information records each includ(cid:173)
`ing identification information, section information, quantity
`information and bid price information. The system further
`includes a central controlling computer operably connected
`to the memory. The central controlling computer is operable
`to first receive a message including a received bid informa(cid:173)
`tion record from one of a plurality of remote terminals
`through a communication system. The received bid infor(cid:173)
`mation record includes received identification information,
`received section information, received quantity information,
`and received bid price information. The central controlling
`computer is further operable to determine a lowest minimum
`acceptable bid value corresponding to the received section
`information using the previously accepted bid information
`records stored in the memory, and store the received bid
`information record if a value represented by the received bid
`price information exceeds the lowest minimum acceptable
`bid value.
`
`10 i
`
`11
`
`Moster
`Computer
`
`Central
`Computer
`
`12
`
`Participant
`Database
`
`Terminal
`
`13
`
`Communication 1..£::......--1 Terminal
`System
`•
`•
`•
`•
`•
`Terminal
`
`Main Auction
`Database
`
`Pdor\~
`Data5ase
`
`15
`
`16
`
`17
`
`

`
`Patent Application Publication Feb. 21, 2002 Sheet 1 of 27
`
`US 2002/0023041 Al
`
`FIG. 1
`
`10
`
`l
`
`11
`
`Master
`Computer
`
`Central
`Computer
`
`12
`
`13
`
`Participant
`Database
`
`Main Auction
`Database
`
`Prior;~
`Datc6ase
`
`15
`
`16
`
`17
`
`•
`•
`•
`•
`•
`
`

`
`Patent Application Publication Feb. 21, 2002 Sheet 2 of 27
`
`US 2002/0023041 Al
`
`FIG. 2
`
`21
`
`Start
`System
`
`22
`
`Auction Site lnitiot:d _in
`advance of open bidding
`
`23
`
`24
`
`25
`
`26
`
`Rules and Registration
`site initiated and
`opened for registration.
`
`,
`
`Participant Registrations
`Received and stored.
`
`Auction Operation
`Executed
`
`Transactions
`Executed
`
`27
`
`End
`System
`
`

`
`Patent Application Publication Feb. 21, 2002 Sheet 3 of 27
`
`US 2002/0023041 Al
`
`28
`
`Participant
`Registration
`Be in
`
`Rules and Registration
`Site Accessed
`
`Registration Information
`Received by Central
`Computer
`
`29
`
`0
`
`FIG. 3
`
`32
`
`Send Message: Please
`Complete Registration.
`
`Yes
`Obtain Credit Card
`Information & Limit
`
`No
`
`Send Message: Card
`Information is incorrect
`or Limit would be exceeded.
`
`Place •Authorization Only• __..._____,,_6
`hold on Charge Card.
`
`35
`
`Send Message:
`•Registration Accepted.
`Bidding Authorized
`Upon Auction Opening."
`
`7
`
`Record registration in
`Participant Database.
`
`39
`
`Registration
`End
`
`

`
`Patent Application Publication Feb. 21, 2002 Sheet 4 of 27
`
`US 2002/0023041 Al
`
`Auction
`Start
`
`54
`
`55
`
`Match lost
`bids to
`last p-lorlTj
`.... \+.S.
`
`FIG. 4
`
`43
`
`Send Message:
`"">---11-t Please Register
`Before Bidding.
`
`5
`
`No
`
`Send Message:
`Bid is too low.
`
`No Send Message:
`~--.tBid total exceeds
`established max.
`
`Send Message: •Bid
`Accepted", oisplay
`-Standing bid amount.
`
`Record bid rank in
`Main Auction Database
`Indexed to referring
`databases.
`
`Sort bids OJlQ
`remove bid~s)
`becoming too low.
`
`:48
`
`:49
`
`52
`
`Update prio..;ti r:5Wr
`Yes
`~---~ display to reflect t----1~
`new standing bids
`
`

`
`Patent Application Publication Feb. 21, 2002 Sheet 5 of 27
`
`US 2002/0023041 Al
`
`FIG. 5a
`
`FIG. Sb
`
`Table· Main Auction Database
`•
`ABID RANK fRIGl:lTlb1LRIGHTID1 BIDDERID
`. 2
`I SXN 1ARIGHT:S ,~R\GHTS I
`3
`I
`I
`.
`2
`30
`1
`1
`6
`1
`2
`
`BIOID
`
`4
`~
`(Counter)
`
`a
`
`~
`
`2
`
`f
`
`2
`1
`
`24
`25
`
`4
`3
`
`8
`7
`
`9
`7
`
`4
`
`

`
`Patent Application Publication Feb. 21, 2002 Sheet 6 of 27
`
`US 2002/0023041 Al
`
`FIG. 6a
`
`~ Table: Seating Database
`D t T
`. f
`D
`Fi Id N
`I a a xee l escnQ ran
`ame
`1e
`--
`Counter:
`\ii P.fGHT..lt:>
`section
`SECllON
`Text
`SUBSEc"T lOt-l
`Text
`s11b,sec,1'lo !'I
`r-\~~+ number
`Number
`~\6tiT
`MINBID
`startmo minimum bid
`Number
`standrna bid for this seat
`Number
`STNDBID
`., 81010
`brd ID #
`Number
`
`-
`
`)
`~indexed
`text
`text
`inteaer
`mteaer
`int ea er
`mteaer
`
`FIG. 6b
`~ _Table: Prtoriij Rt3ht Data b.Qse
`svs-
`RIG Hi ID' s ECTJON
`1secr_10fJ! R\GtfTf
`a
`II
`.a
`?
`3·.
`·a
`a
`4
`a
`')
`a
`E
`a
`'
`a
`~
`a
`9
`a
`10
`a
`11
`a
`12
`- (
`)
`* Counter
`
`~
`
`•'
`'
`.
`•
`
`'}
`
`.i
`...
`
`'>
`..c
`..J
`
`,
`'J
`1..
`L
`...
`'
`...
`•
`
`J."
`J.
`J.
`
`r
`,,,_
`')
`' )
`•
`/
`1.
`J J.
`:>J.
`
`<
`15
`
`MINBID STNDBID BIDID
`I
`I
`...
`!::>
`..:
`!:)
`!::>
`!'.:l
`tl
`!::>
`!':>
`!::>
`5
`5
`!::>
`5
`
`' }
`
`•
`•
`
`• J
`
`~
`
`"L
`0
`..
`!::>
`'
`·~
`•
`....
`
`

`
`Patent Application Publication Feb. 21, 2002 Sheet 7 of 27
`
`US 2002/0023041 Al
`
`FIG. 7
`
`Oescri tion
`
`inde e
`
`r
`
`

`
`Patent Application Publication Feb. 21, 2002 Sheet 8 of 27
`
`US 2002/0023041 Al
`
`FIG. 8
`
`

`
`Patent Application Publication Feb. 21, 2002 Sheet 9 of 27
`
`US 2002/0023041 Al
`
`FIG. 9
`
`(sponsor1s name here) PRESENTS •
`(performer's name here)
`7pm Nov 12, AT THE ARENA
`
`I Bidding will begin @ 10 am, this Saturday! I
`II rules U
`
`A
`(40)
`
`8
`(30)
`
`STAGE
`
`.
`
`K (20)
`
`(numbers show minimum bid prices and locations)
`
`91
`
`

`
`Patent Application Publication
`
`Feb. 21, 2002 Sheet 10 of 27
`
`VS 2002/0023041 Al
`
`FIG. 10
`
`(sponsorts name here) PRESENTS
`(performerts name here)
`7pm Nov 12, AT THE ARENA
`fl rules If
`
`I Bidding in process !! I
`
`Your Standing Bids:
`Section A:
`2 seats @ $140
`Section G:
`3 seats @ $ 33
`Total bill: $379
`
`STAGE
`
`®
`220
`
`130
`
`@
`138
`120
`
`(numbers roughly show present bid price locations)
`
`(To place or cancel bid, click on desired section I
`
`101
`
`

`
`Patent Application Publication Feb. 21, 2002 Sheet 11 of 27
`
`US 2002/0023041 Al
`
`FIG. 11
`
`(sponsor•s name here) PRESENTS
`(performer•s name here)
`7pm Nov 12, AT THE ARENA
`
`f Bidding in process!!
`
`ll rules If
`
`f ISECTION elf
`SS
`85
`
`76
`
`95
`(high)
`
`73
`
`79
`
`... stage
`
`71
`84
`(numbers show present bid price locations)
`
`111
`
`You chose Section C.
`
`Card number or
`Password from
`Registration: -1 - - - - - ,
`
`Number of Seats: c:::J
`
`Bid per seat: c::::J
`(whole dollars only)
`
`ISubmitl
`
`!Clear Forml
`
`To cancel a bid you
`have sent, check this
`box and click on
`"submitD
`
`

`
`Patent Application Publication Feb. 21, 2002 Sheet 12 of 27
`
`US 2002/0023041 Al
`
`Start
`
`121
`
`Obtain highest
`bid in section
`
`128
`
`Obtain next
`bid in section.
`
`123
`
`Go to last-r:~h+ Yes
`procedure.
`
`FIG. 12
`
`No
`
`No
`
`No
`
`Yes
`
`126
`
`Move bid (" tsWts
`to next svb~-\i°".
`
`127
`
`Move up closest
`lower bid( s) to
`fill vacant sub50::Hot\.
`
`

`
`Patent Application Publication Feb. 21, 2002 Sheet 13 of 27
`
`US 2002/0023041 Al
`
`FIG. 13
`
`130
`
`Start
`
`No
`
`131
`
`132
`
`Yes
`
`~k bidder
`if cut-off is
`acceptable.
`
`135
`
`Yes
`
`Change bid
`to cut off
`number.
`
`End
`
`134
`
`Remove bid to
`market research
`database.
`
`

`
`Patent Application Publication
`
`Feb. 21, 2002 Sheet 14 of 27
`
`US 2002/0023041 Al
`
`FIG. 14
`
`200.
`
`208
`
`202
`
`Password:
`
`-
`
`Number of Seats:
`
`Present Bid:
`
`Lock in Premium:
`
`\if •nn
`
`Total Cost:
`
`Seating Options
`If rm bum.,..I &om s.dian B:
`a onc.i my hid 1or Full refund.
`e Sump,,,. b4clt lo wdian C.
`If I ca,., Q'll 11 from ,.,.. ...,,,
`0 C:on<el ....,. bid forfull ...cu..d.
`0 I do<i, -nf a lrOftl ,_ seat.
`epraf« flt>ni tQW butwill-11tot ......
`"""".- prrionmc•:
`o MolSI ._... t ... R ........ bclclt r.,, it.
`0 Will r10t <K=pt gisle ..... .
`0 l'nJer oisl• but .,.;q occapt Q1fwn.
`Q Do ""' pN(e.. am..
`•Don'lcmt.
`
`Lock in my wat .NOWI'
`0 If rou can't-itfor yoursct loccnion lo be~ by the ouctlon. you mcrt "Locfl·in'
`ria. Al tm If.,.. *"° "'9ftlium is 9%
`'l"'6 !ocoliort for o ,_..;.,..,.Over lime. this pNmium -Mii ~as IN ..-uR bG 1-Jo
`f'roxy my bidding
`Emff)'«lt p - bid rn the "<indow at-. """ <Mooo '""" the l'ollowina.
`0 ICaap .... in ......... ~,_ ..,.1o .. - Qf r="'-i pe;!Ubt. Of bump mo.
`0 Keep me in the....,,. JeCtion for up kt a co$f of ~ J>Wliclcet. Of bump mo.
`..,.,._ct-...loalh,.,...,. ..... '\oodf.;,,.•
`In IM llldding for up la a cast ol
`pe; llcbt. ar bump mo.
`0 K"8p -
`our July 3, 2002 • , • Anyplace Sladium • • • The M Band furewiill Toor
`
`204
`
`206
`
`

`
`Patent Application Publication Feb. 21, 2002 Sheet 15 of 27
`
`US 2002/0023041 Al
`
`FIG. 15
`
`Number cf Seats:
`
`Presetrt Bid:
`
`See!ion:
`
`Tolsl Cost:
`
`Ftnal Stage of BMding
`!Ottlr ___ ,..._lttfinol&.t
`
`*
`*
`(< ChaiiG• OI' °"'"' 8ld
`(( lfJd fix AdDJtkmll/ Seat:r »
`
`))
`
`XfZ Band Farewell Tour July 3, 2002 ••• AtlyplaceStadiu~ • .• fhe x:rz Bond Farewell foui"
`
`302
`
`

`
`Patent Application Publication Feb. 21, 2002 Sheet 16 of 27
`
`VS 2002/0023041 Al
`
`FIG. 16
`
`Nwnbef cf Seats
`
`Present Bid:
`
`Section:
`
`• Total Co.st
`
`~C/o~d
`
`»
`
`Auction Closed
`
`1nal Seat lnformatbn
`
`X'fZ Bond Farewell Tour )uly 3, 2002 ••• Anyplace Stadium • ••
`
`The M Band farewell Tour
`
`302
`
`

`
`Patent Application Publication Feb. 21, 2002 Sheet 17 of 27
`
`US 2002/0023041 Al
`
`""'\llha!eYer sea! you scroll to the red :tar jndicator moves
`
`A1
`A2
`A3
`
`A5
`A6
`A7
`AO
`
`280
`280
`265
`265
`265
`265
`250
`250
`250
`245
`245
`
`FIG. 17
`
`

`
`Patent Application Publication Feb. 21, 2002 Sheet 18 of 27
`
`US 2002/0023041 Al
`
`~
`"'-All seats are shown in the venue mao fas with Sections A & B below].
`
`\rlhatever seat and bid you iicroR to that seat becDD1ell highlighted in
`the venue map to show the bid't seat position..
`
`A1
`A2
`A3
`M
`A5
`A6
`l!.l
`AB
`A9
`
`i.6 Ffl'~,,_~
`
`400
`400
`375
`375
`375
`320
`32!!
`
`-~:.on
`
`2115
`
`A11
`A12
`
`All au
`
`A15
`Al&
`A17
`A18
`Bl
`B2
`BJ
`84
`!15
`!!6
`07
`
`BB , ..
`
`n1n
`1!11
`IR12
`lll3
`IR14
`015
`BlZ
`
`28!!
`280
`280
`Z!l!J
`261!
`-,,. ..
`265
`""" 250
`250
`250
`l45
`245
`2;m
`??s;
`225
`775
`
`_,_,, ..
`
`H~-
`
`225
`210
`210
`210
`200 -
`
`FIG. 18
`
`

`
`Patent Application Publication Feb. 21, 2002 Sheet 19 of 27
`
`US 2002/0023041 Al
`
`Sort Bids
`
`Proceed to
`step 51.
`
`Activate the next
`alternative bid.
`
`FIG. 19
`
`Send Message:
`"Bid is too low."
`
`No
`
`Send Message:
`"Bid total exceeds
`established maximum."
`
`No
`
`Yes
`
`No
`
`Send Message: "Bid
`Accepted", display
`standing bid amount.
`
`4'"2."2.
`
`Record bid rank in
`Main Auction Database
`~1---i indexed to referring
`databases.
`
`

`
`Patent Application Publication Feb. 21, 2002 Sheet 20 of 27
`
`US 2002/0023041 Al
`
`Assign priority right to
`highest bid amo~g all
`priority right sections.
`
`Determine
`bumped bids.
`
`No
`
`Exit sorting
`algorithm.
`
`Yes
`
`Yes
`
`Assign priority right to next
`higheset bid among all
`priority right sections.
`
`438
`
`FIG. 20
`
`

`
`Patent Application Publication Feb. 21, 2002 Sheet 21 of 27
`
`US 2002/0023041 Al
`
`Bids Received (in dollars)
`
`8:00a.m.
`44Z _. 1'°'--300
`250.,._44B
`220
`190
`440 ~ 180
`170
`145
`125
`105
`100
`90
`80
`
`8:30 a.m.
`
`9:00 a.m.
`
`9:30 a.m.
`
`260'"'-~
`230
`210
`205
`185
`160
`150
`140
`115
`95
`80
`70
`
`215
`205
`190
`180
`175
`155
`140
`125
`90
`65
`
`200
`165
`145
`130
`115
`110
`100
`90
`75
`55
`
`44t
`
`Tee Times
`
`Winning Bid
`
`8:00
`8:05
`8:10
`8:15
`8:20
`8:25
`8:30
`8:35
`8:40
`8:45
`8:50
`8:55
`9:00
`9:05
`9:10
`9:15
`9:20
`9:25
`9:30
`9:35
`9:40
`9:45
`9:50
`9:55
`10:00
`10:05
`10:10
`
`300
`250
`220
`190
`180
`210
`260
`230
`205
`185
`170
`205
`215
`190
`180
`175
`160
`155
`200
`165
`150
`145
`145
`140
`140
`130
`125
`
`FIG. 21
`
`

`
`Patent Application Publication Feb. 21, 2002 Sheet 22 of 27
`
`US 2002/0023041 Al
`
`$25m
`
`Gro.ss
`Revenue,
`
`$11m - - _'2.r.~a!s-~v~n--' -
`
`~
`- -'- - - - ___ f
`
`10:03
`s1art
`
`10:23
`commercial
`J:ireo~
`
`10:30
`end
`
`FIG. 22
`
`

`
`Patent Application Publication Feb. 21, 2002 Sheet 23 of 27
`
`US 2002/0023041 Al
`
`FIG. 23
`
`$25m
`
`Gross
`Revenue
`
`$11m
`
`-
`
`,.. _q"1_a!s-f!V~n'- - - - ..,. - __ ,.. __
`
`[
`
`f
`
`I
`I
`
`/ ...
`
`f,
`[
`r
`
`commercials
`end
`
`(
`
`~\\
`i .
`
`1 commercial
`i break
`
`I
`r
`
`r
`I
`vrdeo, pJayS''f Jntel'YieW -~
`
`. -~isµui~.
`·concerts video
`
`'.i
`
`'I
`
`video pfays
`
`Tl/'\£
`
`

`
`Patent Application Publication Feb. 21, 2002 Sheet 24 of 27
`
`US 2002/0023041 Al
`
`$25m
`
`FIG. 24
`
`Gross
`Revenue
`
`S11m - - _·11.~a!s~v~n- - - -·-·-
`
`I
`I:
`t
`f.
`
`/': I
`
`commercials
`end
`
`I
`
`I.
`1·.
`
`1
`I
`I
`·1
`
`.J
`l
`Video plays _i
`
`Change in
`revenu~:
`increase
`permi~ute
`
`I
`I
`J
`·1
`
`·'
`
`)
`. . . ,
`lnter11iew 1
`
`I
`
`r
`
`hiStorical
`concerts'.video
`
`j
`r
`
`Virleo plays
`
`Tl.M.E
`
`

`
`Patent Application Publication Feb. 21, 2002 Sheet 25 of 27
`
`US 2002/0023041 Al
`
`FIG. 25
`
`.Gros$
`Revenue
`
`l
`
`200·';· '
`
`\00
`
`prerriiur:il'
`l!;IWl
`
`1o0:%: ·
`
`so-r. ·
`
`25':4
`1o~L· -------------------0
`Tlf\E·
`
`

`
`Patent Application Publication Feb. 21, 2002 Sheet 26 of 27
`
`US 2002/0023041 Al
`
`F\G. 26
`
`no.lino
`
`Avg Price· Forecasts and
`Corres onding.Premiums
`
`ovg price
`per seat
`
`.$1000"
`
`500
`
`250-
`
`$1"00
`
`Actual·
`
`l.
`
`Pro(ected-
`
`5% confidence level
`price = ;$1 ~.000.
`remium required=1SOO%
`
`I
`i.
`"t
`.
`.
`.
`i
`. -50% CL S:4200. p=740%
`
`i
`i"
`.
`'. '
`95% CL $1950: p= 160%
`-
`r" S.% c~ naso. p= 300%
`
`I
`[
`i
`.
`I
`· .. -50% ~L $1050 p=12~%
`t
`:-·95% CL_S650 p=:.t0%
`I
`
`.
`'
`auctii:Jn closed
`
`I
`l
`r
`I ..
`1.·
`
`·/
`
`

`
`Patent Application Publication Feb. 21, 2002 Sheet 27 of 27
`
`US 2002/0023041 Al
`
`FIG. 27
`
`

`
`US 2002/0023041 Al
`
`Feb.21,2002
`
`1
`
`COMPUTER CONTROLLED PRIORITY RIGHT
`AUCTIONING SYSTEM
`
`CROSS REFERENCE TO RELATED
`APPLICATIONS
`
`[0001] This application is a continuation-in-part of U.S
`application Ser. No. 09/586,927, filed Jun. 5, 2000, which is
`a continuation of PCT application Ser. No. PCT/USOO/
`03136, filed Feb. 7, 2000, which is a continuation-in-part of
`U.S. application Ser. No. 08/862,547, filed May 23, 1997,
`now U.S. Pat. No. 6,023,685, which claims the priority of
`provisional patent application No. 60/018,211, filed May 23,
`1996.
`
`BACKGROUND
`
`[0002] 1. Field of the Invention
`
`[0003] The present invention relates to the field of auc(cid:173)
`tions and, in particular, networked systems for conducting
`specialty auctions using computers.
`
`[0004] 2. Background of the Invention
`
`[0005] An important goal of anyone attempting to sell the
`right to attend an event, to own a product, or to perform an
`activity is to receive in return for that right the true market
`value of the right. For some rights, the market values of
`similar rights are all equal. For example, under normal
`conditions, the fair market value of two identical radios,
`both of the same brand and model, is the same. Thus, if a
`consumer were given the opportunity to purchase the right
`to obtain one of the radios instead of the other, there would
`typically be no incentive for the consumer to pay for that
`right. Therefore, the market value of the rights to obtain the
`radios are equal. However, the relative market values of
`some rights to similar products, services, or events are not
`the same, but are dependent upon a difference in some
`characteristic of the rights. For example, when purchasing
`tickets to a concert, although each of two tickets may allow
`the holder to see the same performer, on the same night, in
`the same venue, the market values of those tickets differ
`depending upon the location of the ticket within the venue.
`Therefore, the market value of the right to sit in a particular
`seat at a concert depends at least in part upon the charac(cid:173)
`teristic of the proximity of the seat to center stage.
`
`[0006] The right to perform an activity, or obtain a prod(cid:173)
`uct, or attend an event wherein the difference between the
`market value of the right and the market value of another
`similar right is dependent upon the difference in some
`characteristic of the rights shall be referred to herein as a
`"priority right". Too often, the established methods of selling
`priority rights do not result in prices for these rights that are
`equal to their true market value. Therefore, these established
`methods are incapable of maximizing the revenue of those
`selling priority rights.
`
`[0007] For some priority rights, the manner in which
`differences in the pertinent characteristic affect the market
`value of the right are apparent. For instance, for most sports
`or concert performances, the market value of the ticket
`rights, i.e., the right to sit in a particular seat at a particular
`event, is greater if the seat is closer to the stage. Thus, it may
`be relatively easy for a seller to rank the ticket rights prior
`to any sale of the rights. However, for other priority rights,
`although the characteristic that affects the market value of
`
`the right may itself be obvious, the manner in which
`variance in the characteristic affects the market value is not
`apparent. For example, when an individual wishes to pur(cid:173)
`chase the right to play a round of golf at a particular course,
`the time that the round begins will likely affect the amount
`that the individual is willing to pay. The golfer may wish to
`be the first to tee off and would be willing to pay more for
`such a time than for any other. On the other hand, the golfer
`may have another commitment in the morning and be
`interested only in tee times in the afternoon. Therefore, the
`amount the individual would be willing to pay for a time in
`the afternoon varies greatly from the amount for a time in the
`morning. Due to this variability in consumer preference, any
`ranking of the rights to play a round of golf at particular
`times on a particular day by the owner of the golf course may
`not result in sales prices for these rights that are equal to their
`true market values. Therefore, a system is needed whereby
`the true market values of all priority rights can be achieved,
`including both those rights with relative values that can be
`easily pre-ranked and those rights with relative market
`values dependent upon consumer preferences that are diffi(cid:173)
`cult to discern prior to the commencement of sales.
`
`[0008] Types of Priority Rights
`
`[0009] As discussed above, the right to sit in a particular
`seat for a particular event is a priority right wherein the
`market value of similar rights can be ranked prior to the sale
`of the rights, by ordering the seats in large part according to
`their proximity to center stage. The current manner of selling
`the right to sit in a particular seat for a particular event
`involves selling tickets to the event. However, the estab(cid:173)
`lished method of selling tickets to sporting and entertain(cid:173)
`ment events involves pre-setting inflexible prices and then
`releasing the tickets for sale at a box office or by phone. This
`method has a number of shortcomings. Typically, each sale
`involves employees
`taking
`time-consuming
`individual
`orders and trying to describe the prices and seat locations to
`customers. Another shortcoming with this method is that it
`can be highly inconvenient and sometimes impossible for
`the purchaser to access the sale due to demand. This is
`especially true for premium or "high demand" events. More(cid:173)
`over, for practical reasons, prices are assigned to tickets in
`large blocks, while, in reality, purchasers often consider
`tickets within a block to have a wide ranging continuum of
`values; and these market values can be very hard to estimate
`before the tickets are sold. Largely because of these short(cid:173)
`comings, many premium tickets are sold for substantially
`less than their market value. Generally, these shortcomings
`exist even with new automated methods involving phone or
`Internet sales since the number of tickets is limited and the
`selling system is still fundamentally the same; with "first(cid:173)
`come-first-served" orders taken for pre-priced tickets.
`
`[0010] Another priority right with a relative market value
`that can be fairly easily determined prior to sale is the right
`to obtain a product for which the market demand far exceeds
`the supply. Occasionally, a manufacturer underestimates the
`demand for its product and thus creates too few units for the
`product's initial market release. Examples of this occurrence
`in the recent past include the Cabbage Patch Kids® doll, the
`Tickle-Me Elmo™ doll, and the Sony PlayStation 2™ video
`game system. When such a situation exists, the manufacturer
`generally maintains a fixed selling price and offers the
`products on a "first-come-first-served" basis. The manufac(cid:173)
`turer not only loses revenue from the sales it could have
`
`

`
`US 2002/0023041 Al
`
`Feb.21,2002
`
`2
`
`made if it had produced more units, but it also loses revenue
`by selling the units it did produce at a price below their true
`market value. This difference between the original sales
`price and the market value is typically realized by an entity
`other than the manufacturer, e.g. one who buys the product
`and then resells it at a higher price. The pertinent charac(cid:173)
`teristic that determines the market value of such highly
`desired products is the time of availability of the product to
`the consumer. In other words, a consumer would pay more
`to have the first product off the assembly line than to have
`the five-hundredth. Therefore, a system is needed so that
`when a manufacturer realizes that it has produced too few of
`a highly desired product, the manufacturer may maximize its
`revenue on those products by selling them at their true
`market value.
`
`[0011] Other priority rights with market values that can be
`ranked prior to their sale are rights to obtain services
`wherein the value of those rights are dependent upon the
`order in which the services are received. For example, many
`consumers hire companies or individuals to remove snow
`from their property after an accumulation of snow. However,
`the value of this service is dependent upon the time at which
`the service is performed and, therefore, is dependent upon
`the order in which the properties are serviced. For instance,
`a consumer would likely be willing to pay more to be the
`first serviced after the accumulation of snow has stopped
`than to be the twentieth to receive the same service. There(cid:173)
`fore, a system is needed wherein this discrepancy in market
`value may be realized by the provider of the service.
`
`[0012] Another example of a service with a market value
`dependent upon the order of its performance is admittance
`through a toll booth. Currently, the administrator of a toll
`booth receives a set price for each vehicle that passes
`through the toll booth. That price is often dependent upon
`the type of vehicle, but the price does not reflect the true
`market value of the right to pass through the booth. The true
`market value depends upon how quickly the consumer is
`able to pass through the booth, i.e., the consumer's order in
`the line at the toll booth. Therefore, a system is required
`whereby the price of the right to pass through a toll booth is
`dependent upon the order in which the consumer is allowed
`to pass through the toll area.
`
`[0013] Another right for which the current sales system
`does not return the true market value of the right is the right
`to obtain a certain numbered product of a limited edition
`series of products. For example, a popular artist may sell
`only 100 prints of one of her paintings. The current estab(cid:173)
`lished method for such sales is offering all of the prints for
`sale at a set, inflexible price on a "first-come-first-served"
`basis. However, this sales approach may not achieve the full
`market value for all of the prints. Many consumers may be
`willing to pay more for the first numbered print than for the
`fiftieth. Therefore, because only one price is set for all of the
`prints, many of the prints are likely being sold at a price
`below their true market value. Also, by basing the availabil(cid:173)
`ity of the prints upon "first-come-first-served," the addi(cid:173)
`tional profit that could be gained by selling a print to one
`who comes later but is willing to pay more is lost. Because
`the lower the number on the limited edition item, the higher
`its value, the relative market values of the rights to obtain
`items with different numbers can be determined prior to any
`
`sales activity. A system is needed whereby the true market
`value of limited edition items may be realized by the seller
`of the items.
`
`[0014] Other markets in which the priority rights that are
`sold are often purchased for less than their market value are
`those markets containing products whose true market value
`depends on the product's location. For example, the rights to
`stay in cabins on cruise ships or hotel rooms or bungalows
`in vacation resorts are often assigned a sales price based on
`the amenities available in the room. However, among rooms
`containing the same amenities, the true market value of the
`right to stay in each room may differ depending upon the
`distance from the room to some desired location, such as a
`pool, beach, or lounge. The established method for deter(cid:173)
`mining the price of the right to stay in such rooms is to
`simply set a fixed price and make the rooms available on a
`"first-come-first-served" basis. A system is needed whereby
`the market values of these priority rights, which can be
`ranked according to the distance from some desired attrac(cid:173)
`tion or attractions, can be fully realized.
`
`[0015] Another characteristic which determines the value
`of some priority rights is the time of entry into some venue.
`The established methods for selling these priority rights are
`not capable of garnering the full market value of the rights.
`For example, theme parks, such as Disneyland® and Busch
`Gardens® , sell tickets at an inflexable price for a day's
`admission to the park. However, the actual time of admis(cid:173)
`sion to the park on any particular day is generally deter(cid:173)
`mined by how early the patron is willing to arrive at the park
`to stand in line. An earlier time of admission is desired by
`many patrons because the most popular attractions at theme
`parks often fill up quickly and maintain long lines for the
`entire day. The desirability of early admission is evidenced
`by the current practice of some theme parks, such as Walt
`Disney World® in Orlando, Fla., which allow customers
`who stay at resorts affiliated with the theme park to enter the
`park earlier than customers who do not. However, this
`practice consists of allowing all patrons of the affiliated
`resort to enter the park at a set time, such as one hour prior
`to the admittance of the general public. This practice does
`not maximize the profit that may be obtained by the selling
`of these rights. Some of those customers who stay at the
`affiliated resorts may be willing to pay more to enter the park
`before other affiliated resort patrons. Further, this system
`does not account for the profit that could be gained by
`allowing members of the general public to purchase the right
`to enter the park at a time prior to other members of the
`general public. The relative value of these rights can be
`easily ranked, with earlier times of admittance having higher
`market values.
`
`[0016] Another priority right with a market value depen(cid:173)
`dent upon location, but for which pre-ranking of the relative
`market values may not gamer the true market value of the
`rights, is the right to sit at a particular table in a restaurant.
`A patron is likely to pay more to obtain a table closer to a
`window, for example, and is likely to pay less for a table
`close to the kitchen. However, individual patrons may prefer
`one window view to another or may desire to sit at a table
`in a corner for more privacy. Therefore, a complete, objec(cid:173)
`tive ranking of such rights to sit at a particular table may not
`be entirely accurate. There is a need for a system which
`would enable the seller of these rights to obtain their full
`market value.
`
`

`
`US 2002/0023041 Al
`
`Feb.21,2002
`
`3
`
`[0017] As discussed above, the right to begin a round of
`golf at a particular time is a priority right for which the
`relative market values of related rights are difficult to
`determine prior to the sale of the rights. The tee time itself
`is the pertinent characteristic that determines the relative
`values of the rights to begin rounds of golf throughout a
`particular day. However, it is unclear prior to the sale of the
`rights which times are most desired by individuals wishing
`to play golf that day. The established method for determin(cid:173)
`ing tee times at a golf course is to set an inflexible price for
`playing a certain number of holes and then offering tee times
`on a "first come first served" basis. At premier golf courses,
`the system may be slightly different, requiring consumers to
`stay at a particular resort or be a member of an association
`in order to purchase a round of golf. However, even within
`these premier systems, the tee times are generally offered on
`a "first-come-first-served" basis. These systems fail to gar(cid:173)
`ner the most profit for the golf course owners because
`individuals who attempt to reserve tee times after all the
`times have been reserved may be willing to pay more than
`the owner has currently received for a particular time. Also,
`some individuals may prefer to tee off at certain times of the
`day and, therefore, would be willing to pay more for the
`right to tee off at those times. For example, a golfer may
`wish to be the first person to tee off on a particular day, or
`a golfer may wish to tee off later in the afternoon to avoid
`the heat of the day and to view the sunset on the golf course.
`Therefore, the current system for selling golf tee times is
`sub-optimal because it does not account for individuals who
`would pay more to play at a particular time or for individuals
`who attempt to make reservations after all tee times have
`been reserved.
`
`[0018] Another priority right with a relative value depen(cid:173)
`dent upon individual consumer preference and, therefore,
`difficult to rank prior to a sale is the right to sit in a particular
`seat to view a movie in a theater. When viewing a movie,
`many individuals prefer to sit in the exact middle of the
`theater. However, others, such as those with small children,
`may wish to sit on an aisle, and others may prefer seats in
`the back of the theater. Therefore, the market value of the
`right to sit in a particular seat is not determined by some easy
`calculation, such as the distance from the center of the
`screen, but is dependent upon each potential movie-goer's
`personal preferences. The current system of selling tickets to
`the movie and then allowing admission on a "first-come(cid:173)
`first-served" basis does not garner the full market value of
`the right to view the movie in a particular seat. Therefore, a
`system is needed whereby the full market value of the right
`to sit in a particular seat to see a particular movie at a
`particular time can be recognized by the theater owner.
`
`[0019] Some priority rights are unique in that it may be
`relatively easy in one situation to determine the relative
`market value of related rights prior to their sale while in
`another situation it is very difficult. One example of such a
`priority right is the right to view an art exhibit. For highly