111111
`
`1111111111111111111111111111111111111111111111111111111111111
`US007958024B2
`
`(12) United States Patent
`Chao et al.
`
`(10) Patent No.:
`(45) Date of Patent:
`
`US 7,958,024 8 2
`Jun. 7, 2011
`
`(54) METHOD AND APPARATUS J<OR
`PROCESSlNG SALES TRANSACTION DATA
`
`(75)
`
`Inventors: David Chao, Austin, TX (US); Urian
`Ulount, Austin. TX (US); Josh ua Toub,
`Aus!ln, TX (US): Shari Gharavy,
`Austin, TX (US): C heng Z h ou, Austin,
`TX (US); C harles Erickson. Cedar
`Park. TX (US)
`
`(73) Assignee: Versata Development Group, Inc.,
`Austin, TX (US)
`
`5,732,263 A
`5,790,677 A
`5,825,651 A
`5,832,268 A
`5,864,620 A
`5,878,400 A
`
`3/ 1998 Havens et al.
`8/1998 Fox et al. ................. ....... 705178
`10/1998 Gupta et al.
`11/1998 Anderson et al.
`111999 Pettit ............................... 705/54
`3/ 1999 Carter, Ill
`(Continued)
`
`EP
`
`FOREIGN PATENT DOCUMENTS
`0817017 A2
`1/ 1998
`(Continued)
`
`OTHER PUBLICATIONS
`
`( *) Notice:
`
`Subject to any disclaimer, the term of this
`patent is extended or adjusted under 35
`U.S.C. 154(b) by 1428 days.
`
`Sales misconduct may spark 'excessive' new regs Frederick schmitt.
`National Underwriter. (Life, health/financial services ed.). Erlanger:
`Mar. 24, 1997. vol. 101, Iss. 12; p. 29, l pgs.*
`
`(21) Appl. No.: 09/810,012
`
`(22) Filed:
`
`Mar. 15, 2001
`
`(65)
`
`Prior P ub lication Data
`
`US 2002/0188535 AI
`
`Dec. 12, 2002
`
`(51)
`
`Int. C l.
`(2006.01)
`G06Q 40100
`(52) U.S. Cl. . ......................... .................. 705/35; 705/40
`(58) Field of C lassification Search ............. ....... 705/35.
`705/39, 40. 38
`See application file for complete search history.
`
`(56)
`
`Refer ences Cited
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`(Continued)
`
`Primary Examiner- Lalita M Hamilton
`(74) Allorney, Agent, or Firm - Hamilton & Terrille. LLP:
`Kent B. Chambers
`
`(57)
`ABSTRACT
`A system provides a way to manage agreements that institu(cid:173)
`tions such as financial services companies have with distribu(cid:173)
`to rs who sell their products. Each distributor has a plurality of
`sales representatives that eam commissions for selling such
`products. The conm1issions earned ru1d any other constraints
`imposed on the sales representatives may be defined within a
`selling agreement. The system can generate each selling
`agreement utilizing a set of components representative of the
`type of agreement formed between the institutions and the
`distributor. The components of each selling agreement con(cid:173)
`tain an associated mle set that enables a configuration e ngine
`to generate an appropriate document. The system also con(cid:173)
`tains a set of regulatory conditions for each sale made by the
`sales representatives. The system may be utilized to process
`sales transaction data to ensure that selling agreement terms
`are followed and that regulations for each sale are satisfied.
`
`47 Claims, 8 Drawing Sheets
`
`Callidus Ex. 1001
`CBM2013-00053
`(Callidus v. Versata)
`
`(cid:40)(cid:91)(cid:17)(cid:3)(cid:20)(cid:19)(cid:19)(cid:20)(cid:3)(cid:19)(cid:20)(cid:18)(cid:21)(cid:25)
`
`

`

`US 7,958,024 B2
`Page 2
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`
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`htrnl>.
`
`Ex. 1001 02/26
`
`

`

`US 7,958,024 B2
`Page 3
`
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`* cited by examiner
`
`Ex. 1001 03/26
`
`

`

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`DiltZllrlules 132
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`
`Ex. 1001 04/26
`
`

`

`u.s. Patent
`
`Jun. 7, 2011
`
`Sheet 2 of8
`
`US 7,958,024 B2
`
`200
`
`PRODUCT or SERVICE
`\IANUFACTURER or SUPPL,ER
`
`PRODUCT 200a
`
`SERVICE 200b
`
`PRODUCT 200n
`
`202
`
`AGREEMENT A f----j
`
`203
`
`206 7
`
`AGREE},1ENT C r----...,
`
`212
`
`Figure 2
`
`SALES REP 213
`
`SALES REP 214
`
`SALES REP 215
`
`SALES REP 216
`
`SALES REP 217
`
`SALES REP 2< 3
`
`SALES REP 219
`
`SALES MEP 220
`
`SALES REP 221
`
`SALES REP 222
`
`SALES REP 223
`
`SALES REP 22.1
`
`SALES REP 225
`
`SALES RE? 225
`
`SALES REP 227
`
`SALES REP 223
`
`SALES REP 229
`
`Ex. 1001 05/26
`
`

`

`u.s. Patent
`
`Jun. 7, 2011
`
`Sheet 3 of8
`
`US 7,958,024 B2
`
`300
`
`CREATE AND
`DEFINE PARTIES
`
`302
`
`ENTER PARTY
`MEMBERS
`
`304
`
`SETUP SELLING
`AGREEMENT
`COMPONENTS
`
`306
`
`GENERATE
`SELLING
`AGREEMENT
`
`308
`
`OBTAIN
`LICENSE I
`APPOINTMENT
`INFORMATION
`
`310
`
`RECEIVE
`TRANSACTION
`DATA
`
`Figure 3
`
`SKIP
`TRANSACTION
`ASSOCIATED
`WITH INVALID
`CREDENTIALS
`\ 317
`
`RESOLVE
`TRANSACTtON
`ASSOCIATIONS
`
`314
`
`YES
`
`PERFORM
`COMMISSION
`PROCESSING
`
`318
`
`NET
`PAY
`
`320
`
`312 -
`
`CONVERT
`TRANSACTION
`DATA
`
`DEBT
`MANAGEMENT
`
`322
`
`DISTRIBUTE
`PAYMENTS
`
`324
`
`Ex. 1001 06/26
`
`

`

`u.s. Patent
`
`Jun. 7, 2011
`
`Sheet 4 of8
`
`US 7,958,024 B2
`
`Figure 4
`
`400
`
`ENTER PARTY
`INFORMATION
`
`402
`
`DETERMINE
`WHO PARTY CAN
`SUPERVISE
`
`404
`
`DETERMINE
`WHO CAN
`SUPERVISE
`PARTY
`
`406
`
`408
`
`IDENTIFY
`LICENSE
`REQUIREMENTS
`FORA
`PARTICULAR
`ROLE
`
`IDENTIFY
`CUSTOMER
`SPECIFIC
`RULES
`
`410
`
`ASSOCIATE
`PARTY WITH
`ROLE(S)
`
`ROLE MODELING
`
`DOES PARTY I ROLE
`HAVE ANY
`RELATIONSHIPS?
`
`YES
`
`DEFINE
`RELATIONSHIPS
`
`414
`
`END
`
`Ex. 1001 07/26
`
`

`

`u.s. Patent
`
`Jun. 7, 2011
`
`Sheet 5 of8
`
`US 7,958,024 B2
`
`Figure 5
`
`yES .......
`
`SET STATE
`TO RETIRED
`
`-514
`
`yES ....
`
`SET STATE
`TO RETIRED
`
`-518
`
`NO
`
`NO t
`
`to 306
`
`500
`
`OBTAIN
`DOCUMENT
`COMPONENTS
`
`502
`
`OBTAIN
`COMPENSATION
`COMPONENTS
`
`504
`
`GROUP
`COMPONENTS
`TOGETHER TO
`FORM CONTRACT
`KIT
`
`YES
`
`NO
`
`510
`
`SUBMIT
`CONTRACT KIT
`FOR APPROVAL
`
`Ex. 1001 08/26
`
`

`

`u.s. Patent
`
`Jun. 7, 2011
`
`Sheet 6 of8
`
`US 7,958,024 B2
`
`Figure 6
`
`YES
`
`YES
`
`620
`
`KEEP
`APPROVED
`STATE
`
`606
`
`POPULATE
`COMPONENTS
`OF AGREEMENT
`WITH DATA
`
`608
`
`SUBMIT
`SELLING
`AGREEMENT
`FOR APPROVAL
`
`Ex. 1001 09/26
`
`

`

`u.s. Patent
`
`Jun. 7, 2011
`
`Sheet 7 of8
`
`US 7,958,024 B2
`
`700,,--
`
`"
`
`:S LICENSE
`APPROPRIATE
`LICENSE FOR SALES
`TRANSACTION
`?
`
`YES
`
`702
`
`ARE EDUCATION
`REQUIREMENTS ASSOCIATED
`WITH LICENSE SATISFIED
`?
`
`YES
`
`ARE RENEWAL
`REQUIREMENTS ASSOCIATED
`WITH LICENSE SATISFIED
`?
`
`YES
`
`706~
`
`ARE RESIDENCY RULES
`ASSOCIATED
`WITH LICENSE SATISFIED
`
`INDICATE
`LICENSE IS
`r-----,--~ INVALID. STOP
`EXECUTION OF
`TRANSACTION
`
`" 710
`
`Figure 7a
`
`NO
`
`NO
`
`NO
`
`NO
`
`, . . - - - - - . - t0710
`
`IS LICENSE
`EXPIRED
`?
`
`YES
`
`NO
`
`Ex. 1001 10/26
`
`

`

`u.s. Patent
`
`Jun. 7, 2011
`
`Sheet 8 of8
`
`US 7,958,024 B2
`
`from 708 ----------~
`
`FIgure 7b
`
`712 "
`
`IS LICENSE
`ASSOCIATED
`WITH PROPER APPOINTMENT
`?
`
`NO
`
`INDICATE
`APPOINTMENT
`IS INVALID &
`STOP
`EXECUTION OF
`TRANSACTION
`
`726
`
`IS
`E & 0
`COVERAGE VALID
`
`"
`
`716"
`
`IS
`RENEWAL CRITERIA
`FOR APPOINTMENT
`SATISFIED
`"
`
`718 ",
`
`ARE
`RESIDENCY RULES
`FOR APPOINTMENT
`SATISFIED
`?
`
`720
`
`IS
`APPOINTMENT
`EXPIRED
`?
`
`NO
`
`NO
`
`NO
`
`YES
`
`NO
`
`FLAG
`TRANSACTION
`AS VALID
`
`722
`
`to 318
`
`Ex. 1001 11/26
`
`

`

`US 7,958,024 B2
`
`1
`METHOD AND APPARATUS FOR
`PROCESSING SALES TRANSACTION DATA
`
`FIELD OF THE INVENTION
`
`This invention relates to the field of computer technology.
`More specifically, the invention relates to a method and appa(cid:173)
`ratus for performing processing sales transaction data.
`Portions of the disclosure of this patent document contain
`material that is subject to copyright protection. The copyright
`owner has no objection to the facsimile reproduction by any(cid:173)
`one of the patent document or the patent disclosure as it
`appears in the Patent and Trademark Office file or records, but
`otherwise reserves all copyrights whatsoever.
`
`BACKGROUND
`
`Managing sales and distribution channels has become a
`difficult task in today's business enviroument where it is
`necessary to quickly and fairly administer incentives for 20
`salespeople and distribution channel partners while coping
`with regulatory issues. To keep revenues growing and keep up
`with customer demands, financial services providers have to
`move quickly even when regulation, competition and new
`sales distribution channels inhibit growth. Management is 25
`expected to provide new opportunities for improved revenues
`and margins, while providing customers with better, faster
`information and services.
`The distribution channel model within the financial ser(cid:173)
`vices industry is very complex. Products are sold across mul(cid:173)
`tiple distribution channels and the workforce is very fluid,
`with individual distributors working for multiple companies
`and engaging in multiple agreements with service providers.
`There are regulatory constraints on the sales force in that all
`distributors who sell products must be licensed and
`appointed, or authorized, to sell those products. Financial
`services companies must track all of this information about
`their sales force, maintain a history of all of this information,
`provide incentive based compensation to their sales force, and
`calculate their compensation based upon numerous variables.
`Consequently, any plan for distribution channel management
`must consider the number of channels, the number of dis(cid:173)
`tributors, compensation complexity, regulatory and licensing
`requirements and the number and types of products that will
`be sold.
`Financial service companies are being driven by increased
`competition to consider the use of independent agents in
`place of captive sales staff. Firms may wish to enhance and
`reward cross distribution channel interactions. They must be
`able to enhance distributor reporting and communication and
`effectively manage independent brokers and captive sales
`staff. They must reduce the time required to market new
`products and implement new compensation plans and differ(cid:173)
`entiate themselves based on services offered to customers. In
`addition, they must be able to rapidly integrate new distribu(cid:173)
`tion channel acquisitions and grow distribution capabilities,
`while reducing administration costs.
`Cost avoidance is essential as mergers and acquisitions
`have led to many disparate systems, some of which are anti(cid:173)
`quated. Firms must reduce implementation time for new 60
`products and compensation plans on these antiquated systems
`and reduce the potential for overpayment. The goal must be a
`reduction in the overall cost of administration. Accordingly,
`these companies must interact with the producers (of sales)
`using preferred methods and quickly model new and creative 65
`compensation plans, while consolidating compensation
`administration systems.
`
`2
`In order to provide sales representatives with an incentive
`to sell as much as possible, or to sell more of a desired product
`or products at certain prices, sales organizations create incen(cid:173)
`tive plans where commissions are provided or offered to the
`sales representatives when specific sales goals or targets are
`achieved during particular period of time. In addition, an
`incentive plan may apportion credit to everyone on a sales
`representative's sales team, to the representative's manager,
`or someone other than the sales representative himself. Sales
`10 representatives typically receive compensation based on a
`salary, the hours worked, and/or on the goods or services sold.
`When basing compensation on transactions, specifically on
`the goods or services sold, sales representatives receive a
`commission that can be based on profits, net sales, the number
`15 of products sold, or some other variable. Other primary com(cid:173)
`pensationincludes gross dealer concessions. Secondary com(cid:173)
`pensation includes expense allowances, persistency bonuses
`and overrides that can be allocated among sales teams and
`accumulated over time if desired.
`Sales compensation for direct and indirect channels can be
`one of the most effective levers for aligning sales perfor(cid:173)
`mance with business goals. Unfortunately, designing and
`administering effective incentive programs is a difficult man(cid:173)
`agement challenge. The management of a business can spend
`a great deal of time and money in developing incentive plans.
`In the prior art, the creation and distribution of incentive plans
`is a slow process that is prone to error. It can take months to
`implement a new compensation plan, and dependencies on
`computer software can frustrate sales managers who want to
`30 make even simple changes. Moreover, a lack of measurement
`tools can make it impossible to develop a "closed loop",
`continuous improvement process. Businesses must be able to
`design, process, and communicate sophisticated incentive
`programs that drive revenue growth across all sales channels.
`35 Businesses need to streamline the administration of quotas,
`territories, and commissions, and also require tools to mea(cid:173)
`sure and improve the effectiveness of incentive programs.
`This would greatly simplify the management challenge of
`aligning tactical business performance with strategic objec-
`40 tives, making it possible to react more quickly and effectively
`to changes in market and competitive conditions.
`Quotas are a necessary component of most sales compen(cid:173)
`sation plans, yet they are notoriously difficult to administer,
`especially when they involve multiple hierarchies. Not only is
`45 it easy to introduce problems like double counting and under(cid:173)
`or over-payment, but also changes typically require long turn(cid:173)
`around times while they are implemented by changes in com(cid:173)
`puter software. The management of sales quotas is difficult
`and there is a need to be able to manage them easily and
`50 accurately, allowing business users to assign quotas by terri(cid:173)
`tory or position and across multiple hierarchies. Managers
`also require a capability to accurately track sales results and
`forecast future performance. Needed elements include the
`ability to tie quotas between positions and sales teams or
`55 positions and territories, make sales projections, a provision
`for quick and easy quota setting and editing, and a simple
`interface for use from the field.
`Managing sales territories involves analyzing past results,
`assigning territories, and forecasting future sales perfor(cid:173)
`mance. For most organizations, it is a difficult and time(cid:173)
`consuming process with the result that it is commonly only
`undertaken once a year. Unfortunately, market conditions
`change continuously, making it practically impossible to keep
`sales territories aligned with business needs for more than a
`short period of time. A more automated process for territory
`management is needed to allow large sales organizations to
`keep up with the market.
`
`Ex. 1001 12/26
`
`

`

`US 7,958,024 B2
`
`3
`Another need of finns in financial services is an ability to
`manage sales producer payment accounts by defining mul(cid:173)
`tiple accounts per representative, setting up payment rules for
`each account and procedures for adjustments. Loan issuance
`against customer accounts must also be managed. Loan and
`repayment schedules, and appropriate records, must be main(cid:173)
`tained. As a part of this activity, it is necessary to track eligible
`compensation against parameters established for the loan and
`to be able to track collection of the loan and initiate charge(cid:173)
`back and from the producer if appropriate.
`In the area of distributor administration, finns also would
`like to manage a shared repository for all producer infonna(cid:173)
`tion, including personal infonnation, professional infonna(cid:173)
`tion and preferences. There is a need to provide a view of the
`roles played by individuals with an organization, and active 15
`selling agreements and reporting relationships. Finns would
`like a centralized distributor repository in order to be able to
`view, report and compensate producer relationships individu(cid:173)
`ally and holistically. In addition, they must reduce errors or
`miscalculations leading to overpayment. At the same time, 20
`these firms must assist new agent distribution chaunels in
`learning how to sell new types of products and create new
`distribution capabilities for existing products.
`Credential management is a critical issue for many finns.
`They must
`track professional accreditation
`including 25
`licenses, appointments, National Association of Securities
`Dealers (NASD) registration and continuing education
`requirements for the maintenance of these professional
`accreditations to ensure that they are represented by appro(cid:173)
`priately credentialed representatives. This need is made more 30
`acute by constantly changing government rules and regula(cid:173)
`tions, as well as by different regulations imposed by the
`different jurisdictions in which a firm operates. Finns must
`determine when renewal processing is required and manage
`new and renewal application processes to ensure regulatory 35
`compliance in every jurisdiction. A further problem is pre(cid:173)
`sented by representatives who may move from jurisdiction to
`jurisdiction in the course of their representation of a firm.
`Further, there is substantial turnover in representation result(cid:173)
`ing in a continuing need to ascertain the credentials of new 40
`representatives as well as to maintain contact with fonner
`representatives in the event that issues arise from their fonner
`representation.
`In order to appropriately manage their representatives,
`finns must also be able to create customized contracts and 45
`selling agreements by combining reusable compensation
`components and personalizing agreement templates to fit
`individual producers. A selling contract defines a hierarchy of
`sales people that can sell products under that contract and it
`defines what products can be sold under that agreement. The 50
`selling contract also specifies commission schedules and
`identifies which sales people participate under a particular
`commission schedule. As multiple versions of such agree(cid:173)
`ments may come into use over time, a procedure is needed to
`allow multiple users to maintain agreements through version- 55
`ing, or version control, and a method must be provided to
`manage the approval process for agreement components and
`templates.
`Any distribution management channel solution, in order to
`be useful, must have a capability for error correction, includ- 60
`ing manually inputting and adjusting all transaction infonna(cid:173)
`tion, making retroactive adjustments and viewing and man(cid:173)
`aging ledger items. Other features that are desirable include
`the ability to cancel and rerun transactions.
`Many financial services firms would like to be able to 65
`communicate distribution channel management infonnation
`over the Internet so that producers can view the state of their
`
`4
`relationship with a firm, including profile information,
`licenses, appointments, product information, contract and
`compensation infonnation. Finns would also like to be able to
`perfonn modeling and "what if' analysis and have the ability
`to capture historical data to make strategic decisions about the
`effectiveness of future plans. A set of Web-based incentive
`management products that can be deployed to practically any
`sales or distribution channel would be useful. Such tools
`could greatly simplify the burden of designing, forecasting,
`10 launching, measuring, and refining incentives programs.
`Computer software is necessary to implement the solution
`to these problems and fulfill the perceived needs just
`described. Such software commonly utilizes multiple related
`functions and data structures. To encapsulate these related
`functions and data structures, the software often utilizes a
`standard object oriented progranuning (OOP) language
`approach. in conclusion, there is a need for a solution, imple(cid:173)
`mented on a computer in an object oriented programming
`environment, that manages the contracts between t