US 5,790,677 · Granted 1998-08-04

Microsoft's 1998 Blueprint for Secure Online Shopping

Imagine passing a sealed envelope through a chain of people, where each person can only open the part meant for them, then passes the rest along unopened. That's what this patent does for online payments and orders — it lets multiple parties (buyer, seller, bank) exchange sensitive financial documents safely, even though they don't fully trust each other.

Curated and verified by the IsItPatented Editorial team

The plain-English version

What it protects

The claim covers a multi-party electronic commerce system where a trusted central authority (the credential binding server) issues unique digital credentials to participants during a registration phase. What's protected is the specific method of securing commerce documents and payment instruments by having an originating party encrypt them so only intended recipients can decrypt their portion, then passing the encrypted chain along to subsequent parties who decrypt and verify only their section before forwarding the rest. The protection extends to the entire workflow: credential verification, selective encryption, sequential decryption, and verification across multiple participants in a transaction.

Why it matters

Filed in 1995 and granted in 1998, this patent captures the foundational architecture for multi-party electronic commerce at the moment the web was becoming commercial. Microsoft was securing the core concept of how strangers could safely exchange money and goods online without exposing sensitive data to everyone in the chain. This kind of selective encryption and credential-based trust became essential infrastructure for e-commerce, though the specific technical approach evolved as internet security standards matured.

Real-world use

When you buy something online today and your credit card info is encrypted so the merchant sees the charge but not your full card number, or when a payment processor verifies your identity without exposing your details to the seller, you're using descendant logic from this architectural blueprint.

Original USPTO abstract

An electronic commerce system facilitates secure electronic commerce transactions among multiple participants. Each electronic commerce transaction involves at least one commerce document defining the transaction and at least one commerce instrument defining a payment for the transaction. The electronic commerce system has a credential binding server at a trusted credential authority, multiple computing units at associated participants, and a communication system interconnecting the credential binding server and the multiple computing units. The electronic commerce system operates in two phases: a registration phase and a transaction phase. During the registration phase, each of the computing units generate and send a registration packet over the communication system to the credential binding server. Unique credentials are produced by the credential binding server based upon the registration packets sent back to the computing units. During the transaction phase, an originating computing unit initially requests, receives, and verifies the credentials of expected recipient computing units to ensure communication between authenticate participants. Thereafter, the originating computing unit signs and encrypts the commerce document(s) and the commerce instrument(s) in a manner which ensures that only the intended recipients can decrypt them. The originating computing unit then sends both the commerce document(s) and instrument(s) over the communication system to a first recipient computing unit. The first recipient computing unit decrypts and verifies the commerce document(s) and/or instruments intended for it. The first recipient computing unit then passes the balance of the encrypted commerce document(s) and/or instrument(s) over the communication system to a second recipient computing unit, which decrypts and verifies the commerce document(s) and/or instrument(s) intended for it. This process is continued until all commerce documents and commerce instruments are distributed, decrypted, and verified by their intended recipients.

Patent details

Publication number: US 5,790,677
Filing date: 1995-06-29
Grant date: 1998-08-04
Assignee: Microsoft Corporation
Inventor(s): FOX; BARBARA L., WATERS; LESTER L., SPELMAN; JEFFREY F., SEIDENSTICKER; ROBERT B., THOMLINSON; MATTHEW W.
CPC class: G06Q20/3829

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