Appeal 2007-2742
Application 09/764,618
1 settings; otherwise, the user is prompted to specify payment and
2 shipping information (Bogosian, col. 13, l. 64 – col. 14, l. 3).
3 Hambrecht
4 22. Hambrecht is directed towards an underwriting process. By re-
5 thinking accepted underwriting practices, it levels the playing field for
6 pricing and allocating equity securities. Unlike the traditional method of
7 allowing entities such as investment bankers to negotiate the offering
8 price, Hambrecht employs a mathematical model that lets the market set
9 a share price that is optimal for both the company and the purchasers of
10 shares of stock in the company. The result is a price that eliminates
11 traditional fixed discounts and better reflects what the market is truly
12 willing to pay for the stock (Hambrecht, col. 1, ll. 17-29).
13 23. One embodiment of Hambrecht has an underwriter set an initial price
14 range for the shares, then, any investor (whether institutional or retail)
15 who is interested in the offering can place a bid in an auction through an
16 internet website. Once the auction is closed, the auction system
17 calculates a fair market clearing priced (Hambrecht, col. 1, ll. 32-39).
18 24. Hambrecht allows nonqualified individual investors to enter bids
19 through a broker. The broker gains a reallowance on the trade and
20 ensures there is sufficient funding in the brokerage account to cover the
21 transaction. Some professional investors may wish to route bids through
22 their brokerage accounts via telephone or dedicated terminals while
23 others may wish to enter bids directly over the Internet and settle
24 transactions through an existing account. For direct bidders,
25 Hambrecht’s system may require a mechanism to ensure that there are
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Last modified: September 9, 2013