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Royalty Definitions

System 7 Universal Rights Management has been painstakingly architected to encourage the addition of innovative concepts that expand its power and flexibility. One of the highlights of Version 1.4 represents a significant streamlining of royalty formula data entry in major agreements: Royalty Definitions. In situations where a single intellectual property asset has been given the same royalty rate and escalation structure across a variety of geographic territories, distribution channels or languages, the rate schedule is entered just one time and tagged for the asset for which it applies. Just as easily, if rate schedules are contracted by territory or by right, individual definitions with independent schedules can quickly be created and designated for the correct territories or rights, allowing the escalations to apply across those boundaries for every asset in the contract.

No matter how complex the rate schedule, any combination of assets, rights, channels, territories and languages can be applied to a royalty definition. Data entry creates a top-down designation of rates that is only as granular as is required to properly present the terms of the contract. No extraneous detail. Royalty definitions may be made hierarchical so that, during royalty processing, the closest-matching, lowest-level "child" definition will be applied. For example, a hierarchical approach could record a single contract-wide royalty definition which is then subject to more detailed definitions limited by asset, right, channel, territory or language for exceptions to the rule.

In some cases, the exceptions go beyond the contract components and apply to the product or SKU level. Royalty definitions handle these cases as well by allowing any royalty definition to be product-specific. Any royalties reported for SKU's of that product will be limited to royalty definitions for that product, allowing for a whole new level of contract complexity. Imagine a worldwide contract with an overall royalty rate with individual exceptions for the two most active territories. Add in a special, promotional product with its own escalations, including custom rates for the two large territories, and you have a seemingly impossible-to-handle royalty reporting situation. System 7 can handle this challenging situation with only six royalty definitions, each with their own set of royalty schedules.

Without royalty definitions, these special cases frequently force single agreements to be arbitrarily split into multiple system contracts. Artificially fragmenting a contract destroys invoicing consistency, meaningful analytical reporting and cross-collateralization opportunities. Royalty definitions allow a single contract summary, long form contract or deal memo to reflect royalty rate realities in a concise and comprehensible manner. Revisions to royalty rates during the contract life cycle (as market realities adjust expectations) become intuitive and practical.

Executive Information for International Operations

Multiple currencies, geographic separation, security issues and diverse product responsibilities within multinational corporate structures intensify the requirement for a strong Contract Rights Management system. Without a centralized contract database and financial processing capability a Tower of Babel can result that reduces meaningful analysis to a quarterly or annual basis as part of corporate financial reporting processes. Control, intelligence and productivity are sacrificed to “independence.”

Multi-currency capabilities are embedded into the essential fabric of System 7. All reports and queries containing financial information offer the option for presentation in primary (corporate or divisional) or local currency (currency of actual transaction) at the push of a button. Corporations, divisions, licensing contracts and royalty receivables may each have multiple different currencies at their respective levels within the financial reporting chain. Participations build upon this base to produce custom reporting tied to corporate, divisional, contract or designated (typically by territory) currencies.

System 7 is never taken off line to perform routine financial updating or contract revisions. All posting processes are designed to add transactions to the database, existing records are never touched. Referential integrity is continuously maintained by SQL Server. Transaction Server rolls back all data saves and posted transactions that fail to complete properly due to hardware, network or Internet failures. Windows Terminal Server is utilized to provide efficient dial-up access for home offices not served by broadband Internet connections.

Drilldown and Interlinking Executive Queries allow managers who may be unfamiliar with corporate data entry policies or actual system operation to dig deep into the database with minimal training. Web interfaces are used on all queries to ensure easy accessibility (with security clearance) from any computer anywhere in the world. No setup required. Workflow Management automatically generates emails to departments, responsible individuals and cc lists whenever critical approvals, payments, options or deliveries demand executive attention. My Jaguar provides a web-based personal notification desktop designed to provide constant updates on calendar events, contractual status changes, royalty reporting submissions, cash receipts, personal contacts and countless other variations configured to the specific needs of each individual viewer.

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