|
"System 7 Fundamentals" Posted to Website
System 7 has been a labor of love for the past 5
years, with invaluable support, guidance and encouragement from all of
Jaguar’s clients, however, most notably the NBA, Sesame
Workshop, Hallmark Entertainment and National
Geographic Society. The result is a software system that has the
potential to be a 100% contract rights management solution to a wide variety
of intellectual property segments. The possibilities are literally endless!
Jaguar has compiled a White Paper, System 7
Fundamentals, aimed at helping interested parties drill down to the next
level of detail concerning what makes such a system functional and what the
concrete benefits are for most companies that use them. The following Table
of Contents is intended to help present the major information categories
that are covered. System 7 Fundamentals will be available in either a
sectionalized format under
http://www.jaguartc.com/system7/ or as a downloadable document upon
request. As a sample, Section 2, “What is Contract Rights Management?”
follows in this newsletter.
1. Taking the Initiative with System
7
2. The Challenges of Finance
3. What is Contract Rights
Management?
4. System 7 Introduction
5. System 7 Module Highlights
A. System 7 Intranet
B. Contract Administration
C. Rights and Restrictions
D. Workflow Management
E. Revenue Accounting
F. Royalties Receivable
G. Participations Payable
6. Contract Intelligence Benefits
7. System 7 Advantages
8. Industry Specific Applications
A. Licensed Manufacturing
B. Entertainment Industry
C. Print Publishing
D. Music Publishing
E. Industrial Components
F. Miscellaneous
9. Company Profile
What is Contract Rights
Management?
Forms of Intellectual Property
Distribution Channels
Rights and Restrictions
Availabilities and Collisions
Royalties and Receivables
Communications and Workflow
Potential of Contract Intelligence
Forms of Intellectual Property
Every organization is built upon a foundation of legal
and intellectual properties. Proprietary rights to locations, trademarks,
trade secrets, employment agreements, confidentiality, customer franchises,
vendor exclusivities… the list goes on and on. For the purposes of Contract
Rights Management intellectual property is narrowly focused, although often
surprising in its variety and form. A definition of an Intellectual Property
Asset is any right that may be conveyed exclusively
for a definite term. Clearly, not all assets that are managed by
contract rights management systems are licensed in this manner, however,
without exception, they could be.
System 7’s fundamental design premise is that it is
possible to build sufficient flexibility into a contract rights management
system to enable that system to successfully handle the rights management,
royalties processing and financial reporting business requirements for any
form of intellectual asset. Jaguar’s previous generations incorporated
technology and design compromises that set definite boundaries and
limitations on their ability to efficiently support all possibilities.
System 7 was formulated using a clean sheet of paper and a “no limits”
philosophy. This painstaking approach ensures that System 7 represents both
a solid package software foundation that supports all standard Contract
Rights Management business practices and a software
engine able to be custom adapted to any conceivable requirement.
Section 8 of System 7 Fundamentals under
http://www.jaguartc.com/system7
details the application of System 7 in 20
specialized industry segments. They include Consumer Products,
Toys, Apparel, Film, Television, Networks, Live Events, Broadcasting,
Magazine Publishing, Book Publishing, Music Publishing, Bio-Technology,
Software, Research, Patents, Petrochemicals, Automotive, Food Manufacturing,
Advertising, and Franchises. There are many others.
Distribution Channels
Distribution Channels are traditionally considered to
be subrights used to refine the characterization of major rights categories
to fit unique situations. In traditional media and entertainment
applications this is commonly the case. However, when the demands of
Consumer Products, Apparel, Music Publishing and
Software licensing are considered, Distribution Channels become
a major dimension of grants within a contract.
Distribution Channels are best thought of in terms of
retail consumer delivery of the licensed product in question. Whenever the
licensor sees economic benefit in tracking, and possibly restricting, the
physical or electronic delivery of such products through various wholesale
distribution tiers, it becomes essential for Distribution Channels to be
properly identified and organized. They must be accurately described within
the executed agreement and simultaneously correlate with the manufacturer or
licensee’s internal billing and record keeping systems. For example, in a
retail distribution environment, the tiers could descend from Retail Chain
Type to Named Retailer to Retailer Division to Store Number to Store
Showcase. The possibilities are literally endless.
Supply Chain-oriented marketing and cross-promotion is
most feasible when performance information is available at both the macro
and micro levels. The wide spread acceptance of Pay Per View is transforming
royalty collection and reporting for Television Channels, Airline
Routes, Hotels and countless other emerging digital distribution
technologies. Rights Management from the Distribution Channel perspective
offers the owners of high value content the opportunity to precisely tune
consumer delivery of their asset. Through an expanded Contract Intelligence
they are able to proactively ensure that all
potential holes and weaknesses in their distribution strategy are recognized
and filled by the best available business partners.
Rights and Restrictions
The most fundamental aspect of the contractual
relationship is granting and restricting economic rights.
Contract Rights Management may be defined as the
integration of rights (and the associated restrictions) acquired through
Acquisition and Creative Agreements and granted through Sales, Agency and
Sub-Distribution Agreements. Any consideration of Intellectual
Property Rights must include Intellectual Assets, Geographic Territories,
Exploitation Method, Distribution Channel and License Term.
Typical Restrictions on those rights include Language, Exclusivity,
Contingencies, Promotions, Editing and Alteration authorizations.
All of these factors are taken into consideration,
either specifically or implicitly, every time a grant of rights is
contemplated. In true Contract Rights Management,
assumptions cannot be made that all rights are owned without limitation or
that all rights are consumed internally. Companies that operate
in such simplistic environments have a Rights Inventory Catalog, not
a multi-dimensional Rights Management Matrix that must be
managed with great care.
The business of operating an intellectual property
licensing operation requires that each of these dimensions be further
subdivided into groups and elements, frequently organized into seven or more
levels. At every level, each category can be a member of 10 or more
collective groupings, while simultaneously serving as the master for dozens
or hundreds of components. For example, a linear hierarchy for Geographic
Territories could be: World, Europe, France, Paris Region, Paris, Central
Paris, Hotel District. This example might be the standard way in which
analytical reports are presented within the company. Moreover, within this
example, France for certain purposes, could also be a member of the
French Language Group, Developed Nations Group, Western Europe Group, Wine
Producers Group, Canal Plus Satellite Group, and so on. This diversity
may or may not be the case at every level in the hierarchy in order to
adequately model real world business activities.
Availabilities and Collisions
Fundamentally, Rights Management focuses on two
issues, opportunities for expanded asset use and
avoidance of conflict among rights holders. Contract Rights
Management uses Availability Reports of various styles and formats to
examine present rights ownership details and potential exploitation
patterns. The result is precise identification of present or near term
possibilities for internal usage or external licensing. Much in the way that
an Accounts Receivable Aging examines Invoice Due Dates and
compares them to a specific Cut Off Date, Availability Reporting
analyzes each acquisition or grant of rights by date (estimated or final) to
identify pending expirations and virgin release windows.
Collision Testing takes the
same viewpoint in the converse. Rather than looking for holes, it
examines every contract in its latest incarnation and
alerts the company to redundant exclusive grants or
exclusive/non-exclusive rights conflicts. This ongoing
responsibility becomes critically important when the dynamic effect of
Contract Amendments on the adjustment of Release Windows is considered.
Shifting exploitation dates commonly cause conflicts to arise where none
were envisioned at the time of contract execution. These unexpected
consequences of changes in real world plans often represent the riskiest
legal exposure possible. The newly instated dates are frequently much more
finely tuned to the actual marketing plans of the companies involved than
the broadly projected dates that they replace.
Royalties and Receivables
Contract Rights Management does much more than
administer contracts and provide intelligence. It also supports the business
processes that turn promises into cash revenues and expenses. Rights
Management is fundamentally a multi-faceted integration of contractual
elements designed to irrefutably identify grant duplications and overlaps.
Rights Finance must reconcile these component break outs with the
added responsibility to communicate with the client in the language of the
original agreement. The licensee that acquired product rights for
Sub-Saharan Africa is not interested in the licensor’s view of Northern
Africa, South Africa, Nigeria or anything in between. Their justifiable
expectation is to receive scheduled invoices for advances and to be able to
report royalties due at the Sub-Saharan level,
without administrative interference from licensing arrangements that the
licensor may have in place with other licensees.
In addition, licensees
frequently report their sales performance to the licensor at a level of
detail that at first glance appears to be inconsistent with the original
grant of rights. France, Switzerland and Belgium become the
French Group. The United States becomes Los Angeles, San Francisco, Las
Vegas, etc. Sufficient rights intelligence must be available to
automatically understand these variations and flag them either as material
breeches of the contract or acceptable deviations from expected reporting
formats. This data consistency issue becomes particularly acute when
discrepancies in licensee reporting generate detailed Accounts Receivable
Statements designed to explain variances between the licensee’s and
licensor’s calculations of amounts due. Internal systems must be able
analyze the report using the terms defined within the agreement and then
communicate back to the licensee using specific information that corresponds
as closely as possible to the definitions used in the original royalty
report submission.
Communications and Workflow
Intradepartmental and external communications
concerning Contract Rights Management rarely operate at the detail level of
either the Rights Management or Rights Finance functions. Product Approvals
are grouped into classes of products or groups of SKU’s. Contract Approvals
focus on the aggregate or prime value grants of rights, not the details.
Event Management ties to critical rights, not every contractual component.
Email Notifications highlight major contractual events, with the minimum
possible reference to underlying rights.
Legal language used to hone descriptions of the
rights and responsibilities assumed by the contracting parties frequently
relies on structured information entered into specific data fields. Sales
staff summarizes pending deals in terms of packages of assets, territorial
regions, rights categories and major retail chains to deliver initial
information to the rest of the organization. Executives seek to
either roll up or drill down the raw rights information that they are given
to gain the understanding that they need for concrete action. Each of these
applications requires a distinctly different view of the same contractual
data.
Potential of Contract Intelligence
Contract Intelligence is the ability to ask any
question, no matter how grand or granular, about the thousands of contracts
that define the intellectual property enterprise. The questioner is entitled
to expect a concise and timely answer. In contrast, most intellectual
property executives rely on the 80/20 rule in an attempt to achieve
acceptable performance without the benefit of an adequate base of
information on the actual content and possible implications of their
contracts. They attempt to use semi-manual systems that are capable of
accurately representing a handful of key agreements. This information gap
leaves them ignorant of the vast majority of their corporate history.
Executives then delegate responsibility for this research and sales
execution to lower level, less qualified individuals who
lack the experience and drive to properly utilize
this information to maximize revenues.
Contract Intelligence supports Sales by
providing relevant historical analysis, valuable templates for future
agreements, rights availability analysis, current sales data, royalty
performance summaries, contract status reporting, marketing campaign
support, and granted rights clearances. Contract Intelligence strengthens
Legal through Option Ticklers, Collision Notification, Action Memos,
Flash Terms Summaries, Boilerplate Assembly, and Form Printing. Contract
Intelligence accelerates Finance through contract revisions posting,
revenue recognition export, multiple period transaction processing, audit
support, allocated cash receipt deductions, event-triggered invoicing,
royalty discrepancy notification, foreign currency consolidation, and
guarantee shortfall billing.
About
Jaguar News
Jaguar News is published periodically for the
purpose of maintaining communications with Jaguar’s clients, prospective
clients and other parties interested in the field of Intellectual Property
Contract Rights Management. Jaguar Consulting was founded in 1985
for the express purpose of designing, developing, installing and
supporting Intellectual Property Software
Solutions. Clients include Alliance-Atlantis Communications,
Cinar, DIC Entertainment, Explore International, Flextech Television,
Goodtimes Video, Hallmark Entertainment, Harmony Gold, HIT Entertainment,
Jim Henson Productions, Lions Gate Entertainment, Major League Baseball,
MGM, NBA, NBC, National Geographic Society, Nelvana, Sesame Workshop,
Southern Star, Warner Home Video and WNBA.
System 7 Universal Rights Management is
Jaguar’s seventh generation software product. It is an all-new design
created specifically to bring contract rights management technology to all
forms of intellectual property, including patents,
copyrights, trademarks, trade secrets and
permissions. This groundbreaking system features a
Universal Contract Database, Multi-Level Rights Inheritance and a
fully configurable Custom Rights Framework. System 7 is available in
the following software modules: Contract Administration, Rights and
Restrictions, Workflow Management, Revenue Accounting, Royalties Receivable
and Participations Payable. Further information is available at
www.jaguartc.com.
Jaguar Consulting Inc.
Pasadena,
California
Lincoln Center, New York
London, United Kingdom
For additional information: Visit http://www.jaguartc.com
Or contact
Marlene Willett 626/796-1955 x201
mwillett@jaguartc.com
If you wish to discontinue your receipt of Jaguar
News, simply reply to this email with “Unsubscribe” in the subject line.
If this email was forwarded to you from another email address, please
indicate the original address in the subject line as well.
| 
