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`
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`.. Glltlt~'~i
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`om PatentNo.:
`(45) D~te ()f Patent:
`
`US 7,904,326 B2
`Mar:. 8~ lOll
`
`.(54) ~\fll(),)),i\NlJ:,\:.PF:ARA'fUS FOR
`PE~l<))liMlNG(o'QLJ.,ECflVRVALIDATlON
`()F:(]l~DEN11AVlNliORM.ATION
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`{75} J~Yettt<~x:
`
`$1,•n'toilta:tav~" Atlsfil~;Tj( (US}
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`(73) A:$1~tee; Versata DtlY¢lopmciit Gr<~up, lll(h,
`Austin, TX {US)
`
`(
`
`Notice:.
`
`Subjcet to atiy dlsclah11ct; tncrcr!lll>flhh~·
`patent is extended or lf~j\lllted tlllder 3$
`U.S.C.l54{b) hy 120 ~s;
`
`(21) A.ppLNo.: 09!89li:,144
`
`(~l 'Filed!
`
`Jim. Z9, :2001
`
`!JdRUIGN.PATENT.OOCUMT~NTS
`1119!>$
`081'7017 A:2
`
`QTlUiR.PUBLlCA:l10NS.
`No,rmaa Walsh.; X~I, The &'tt~nstble Styll) I..;mj.!_itage f11nlit1e]. Web
`1~!q~t~.~s. Jan.J999 ftclti\h>lldmiF""b· H. 2.00l]; Retrievet,l fmm
`t!\e!!ltemet: <Uru •. : htip:!tv.rW>v,webt¢¢hniq~~¢s,eoilliawllivesil9W!
`Otiwnlshf>.
`
`Pritllt:!f)' E~dlf/iner Andrew Jo$1i!pl1 Rudy
`(74) Jfttar/Jf!J'f Agent, ot Firm - Hatnilton & 'lerrile., LLP;
`K<mt J~; t;;funnb"ers
`
`(51)
`An emb<Jdnnent ·Of th't{ invention compris~ .a t:netbod and
`ap~mttts for j?\lfllmtr!!lg ¢t~lll;letive Villidatl~i~ ofc~•.mlial
`~nfOttil%ltloo.)'bitin\(cntiO)l'bas.~pplicabilityiu•jn~usJdtll>.tlmt
`~>Quite:!l!ll~~~1~<1r·ti~~s~r~laJed.l9·i.l.u?.(lfstritmtion·of a
`~in Pl!;l<{nl}t tt} f1ef~<ieriJ1:llt71f (e:.g.,. li¥ifsed and/or
`4p,pt}inlti14:)\vh¢1lsel~in~~rtain~ttRl(WtJr(e.g:,,lifeinsttmnce;
`l.tt<i ••. : }> For exan;tple~ Iu order t!} sell sm:ne fi.llilll~ial il).Sfrtt~
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`· mtdlor fedeml
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`anyr~~~~tOcyc<ms$jms,pJ.l.~in.plarehy,goveJ!l.Uu.eut\'lr·~ny
`~tl~r organi:r.,ation. C(ln;tpi!t1ies lllll}'~. for j~?ta!lc;;t1 tttiHze
`einoodimcnts ofthll! ii1ventio111o ensure that.$illcs represen·
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`
`Refl.lrenccs Clt.cd
`
`A * U 1989 Shavit \."! ;1!. ... ...... ....... .... . ,,~:::>t "''"
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`4!1989 Knight, Jr. ,., .......... " ... ..
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`-A "' S!l9$4 f'atermaster ,_, .............. .
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`A
`8/1.9.95 Mlller.;tal.
`1!1996 HellifZenmn ct.nl, ......... 3ti4/4{)l
`A
`A
`5i!Q96 Lyn..:h ~at
`A
`tl/!997 Shir!oycrai.
`A
`.fi 1998 L}mch ct. al,
`A * 8!1998 P6x eta!. ........................ 10Stts
`A
`JGJllJ9S Gufjla ct. aL
`A * !!.199iJ Pel.t!tt .... , ..... , ........ ,,., ... ,".·'
`(Cnn.timwd)
`
`.
`I
`detemtinc remmisslonumonnbl. Tbe t;yste1lJis co1tfigcroo tu
`pet.tbrm suoh trmi.Sactlon .pmcesslng in all· efficient ll1anner
`that mifdtnl7#ifo the antO\Int of comm!t~tl!llU<\1 ~Purees
`~oiredtodetemtillewhlilh~r a sa!QS at~ni'f$ vaiidcreden·
`tial~t thQJ4U,eof a.particW!!tsaleandl~ tll~re~re entirted .ro
`COn1pCfiSation (e,$:, a COim:UisslOTI).fot tJii;Sale;
`
`Exhibit 1019 01/17
`
`Callidus Ex. 1 019
`CBM20 14-00118
`(Callidus v. Versata)
`
`

`
`US 7,904,326 B2
`Page2
`
`2002/0188535 A I
`2003/00 1848 1 AI
`2006/0206789 AI
`
`1212002 Chao et al.
`l/2003 Zhou et al.
`9/2006 Bakman et al.
`
`OTHER PUBLICATlONS
`
`........... 709/328
`
`U.S. PATENT DOCUMENTS
`5,878,400 A
`3/ 1999 Carter, Ill
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`1211999 Lynch et al.
`6,055,637 A *
`4/2000 Hudson et al. .... ...... ..... .. 726/20
`6,065,026 A
`5/2000 Cornelia etal. .............. 715/53 1
`6,105,00 1 A *
`8/2000 Masi et al. ...................... 705/ 14
`6,128,603 A *
`1012000 Dent el al. ........ .............. 705/40
`6,134,533 A
`I 012000 Shell .............................. . 705126
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`8/2001 Reinfelder et aJ .
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`212002 Clark
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`l 012002 Coakley
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`6,477,533 B2
`1112002 Schiffetal. ..................... 707/ 10
`6,5 10,5 13 Bl •
`112003 Danieli ......................... 713/ 156
`4/2003 Carter, Ul
`6,553.350 B2
`6,594,633 Bl
`7/2003 Broerman ......................... 705/ 1
`6,606,744 Bl •
`8/2003 Mikurak ....................... 717/1 74
`6,6 18,706 B I *
`9/2003 Rive et al. ....................... 705/30
`912003 Gupta et a!.
`6,629.153 B l
`6,636,852 B2 *
`10/2003 Gozdeck et al. .. ................ 707/9
`12/2003 Koppelman et al. ............ 705/ 14
`6,662,164 Bl"'
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`6,67 1,818 8 1 ..
`3/2004 Peters et al. ...................... 705/4
`6,7 14,9 14 Bl
`6/2004 Hastings ......................... 705110
`6,751 ,596 8 1
`6,772,204 Bl
`812004 Hansen .. .. ...... ...... ......... 709/220
`6,778,880 B2 *
`8/2004 Okamura ...................... 700/226
`6,782,369 Bl •
`8/2004 Carrott .............................. 70511
`l/ 2005 Solomon et al. ................ 705114
`6,847,935 Bl •
`3/2005 Martinet al. ..................... 705/4
`6,862.57 1 82*
`6,865,524 8 1
`312005 Shah et al.
`6,889,206 Bl •
`5/2005 Nuttall ............................ 705/52
`6.938,021 B2
`8/2005 Shear et al. ..................... 706/67
`6,986,038 BJ •
`112006 Leah et al. .................... 713/ 155
`6,999,946 B2 *
`2/2006 Nuttall .... .... ...... ...... .. .. .. .. 70 5/52
`2/2006 Constantino ct al.
`7.007.227 B l
`3/2006 Whitcsage
`7,016,859 82
`3/2006 Fisher ct al. .................... 705/35
`7,0 16,871 Bl
`7,043,407 B2
`512006 Lynch et al.
`7,069,235 Bl *
`6/2006 Postelnik et al .
`............... 705/26
`8/2006 Nuttall .............. ............ 709/229
`7,089,315 82 ..
`I 0/2006 Mikurak
`7,124,101 B l
`7,133,845 B l *
`1112006 Gi nter et al. .................... 705/51
`7.139,73 1 B l *
`1112006 Alvin .............................. 705/35
`7,155,409 B l
`12/2006 Stroh
`4/2007 Wheeler et al.
`7,200,749 82
`5/2007 Kyojima et al.
`7,225.165 B l
`7,228,282 8 1 *
`6/2007 Philyawetal. ................. 705/10
`9/2007 Gharavy
`7,269,788 B2
`7,272.572 Bl
`9/2007 Pi.enkos
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`4/2008 Paasche et al.
`512008 Engin eta!.
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`7,8 18,423 B l *
`10/2010 Philyaw ............ ............ 7091225
`2001/0032094 AI
`10/2001 Ghosh et al ....................... 70511
`2001/0034682 AI *
`I 0/200 I Knight eta!. .. ................. 705/35
`2001/0037265 AI
`1112001 Kleinberg ....................... 705/27
`J L/200 I Black et al . ................... 707/ 102
`2001/0039547 A I *
`2001/0047299 AI*
`11/200 1 Brewer et al. ................... 705114
`200110049622 A I
`1212001 Gozdcck et al. .. .............. 705/ 11
`200 1/0051917 AI*
`12/2001 Bissonette et al. .............. 705/39
`2/2002 Antognini et al ............... 705/40
`2002/0023055 AI"
`2002/0023109 AI
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`2002/0055850 A I
`2002/00916 14 AI
`712002 Yehia et at.
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`http://finance.a.mericanexpress.com/siflcdalpage!
`<URL:
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`Exhibit 1019 02/17
`
`

`
`us 7,904,326 82
`
`Page 3
`
`Why ContractMakcr, And !low Does h Work?. Legal Contracts.
`Digital Contracts. Inc .. [online]. [retrieved on Aug. 8. 20011.
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`info \\hyhow.html>.
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`l·eb. 4, 2002. 1 he snapshot of this web page was downloaded to
`web.archive.org on Jun. 24. 1997: however. the page information
`states that the SC Commission web page was last modified on Mar.
`12, 1997.[.
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`Application lnlormruio n Retrieval system, as of Oct. 13, 2010.
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`Application Information Retrieva l system, asof Oct. 13,2010.
`* cited by examiner
`
`Exhibit 1019 03/17
`
`

`
`100
`
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`
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`
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`
`112
`
`114
`
`110
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`INDICATE
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`INVALID. STOP
`EXECUTION OF
`TRANSACTION
`
`104 \
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`I 116 .......
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`
`Figure 1
`
`126
`
`INDICATE
`APPOINTMENT
`IS INVALID&
`STOP
`EXI!CUTION OF
`TRANSACTION
`
`NO
`
`NO
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`I
`NO I
`
`106 \ ~_A_R_E.~ NO I
`
`108 \ ~ ··~ I
`
`YES
`
`I
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`I
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`I
`
`Exhibit 1019 04/17
`
`~ '
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`/-....._
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`I
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`NO
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`220 '1
`
`FSLicense
`
`r--<l
`0 .n
`
`-GID: GID
`-Jursidiction : long
`
`230
`
`f - -
`FSDistributorData
`000
`
`-GID: GID
`+lslicensed()
`+lsAppointed()
`
`1
`
`) .. n
`
`o .. n
`
`1 .. n
`
`1..n
`
`FSAppointment
`
`FSStatus
`
`1..n
`
`/
`
`2
`
`0
`
`-GID : GID
`-Jurisdicion : long
`-SubJurisdiction : long
`-Company : SCOrganization
`-Parent : FSDistributorData
`
`-GID : GID
`-StartDate : Date
`EndDate : Date
`-Object : GID
`-StatusCode : long
`
`Exhibit 1019 05/17
`
`Figure 2
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`
`U.S. Patent
`
`Mar.8,2011
`
`Sheet 3 ofS
`
`US 7,904,326 B2
`
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`Exhibit 1019 06/17
`
`

`
`410
`
`OBTAIN A SET OF
`TRANSACTIONS
`
`Figure 4
`
`420
`
`'--I DETERMINE A DISTRIBUTOR
`
`.., ASSOCIATED WITH THE SET OF 14 - - - - - - - - - ,
`TRANSACTIONS
`
`•
`
`430 '-1 DETERMINE A SET OF TESTS
`
`' - - -
`
`THAT APPLY TO EACH
`TRANSACTION/ALLOCATION
`
`435'-...._---
`
`EXECUTE TESTS IN BATCH
`
`440
`
`460
`
`450
`
`NO
`
`DO NOT COMPUTE
`COMPENSATION
`
`YES
`
`COMPUTE DISTRIBUTOR'S
`COMPENSATION
`
`Exhibit 1019 07/17
`
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`
`DENORMALIZE TABLES
`
`v 51 0
`
`1
`
`I '
`,
`
`OBTAIN DITRIBUTORS AND
`LICENSE INFORMATION
`
`/520
`I
`l-/"
`
`--
`/ 530
`1
`OBTAIN INPUT FROM
`TRANSACTION INFORMATION l-/"
`
`OBTAIN TEST INFORMATION
`FROM RULES FILES
`
`/ 540
`I
`l..-/"
`
`l
`
`Figure 5
`
`+
`
`VALIDATE DISTRIBUTORS'
`INFORMATION
`
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`/560
`DATA WITH DENORMALIZED 1_/
`DATA
`f
`
`EXECUTE COMMISSION
`COMPUTATION
`
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`
`Exhibit 1019 08/17
`
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`
`US 7,904,326 B2
`
`1
`METHOD AND APPARATUS FOR
`PERFORMING COLLECTfVE VALIDATION
`OF CREDENTlAL fNFORMATION
`
`FIELD Of' THE INVENTION
`
`This invention relates to the field of computer technology.
`More specifically, the invention relates to a method and sys(cid:173)
`tem for perfonuing collective validation of credential infor(cid:173)
`mation (e.g .. license and/or appointment data).
`Portions of the disclosure of this patent document contain
`material thai is su~jectto copyright protection. Tbe copyright
`owner has no objectiou to the facsimile reproduction by any(cid:173)
`one of the patent document or the patent d isclosure as it
`appears in the Patent and Trademark Office file or records, but
`otherwise reserves all copyrights whatsoever.
`
`BACKGROUND
`
`2
`One aspect oftbe invention provides a method for validat(cid:173)
`ing sales agents' credentials while processing the sales trans(cid:173)
`action data to detennine commission amotmts. TI1e system is
`configured to perform such transaction processing in an effi-
`5 cient manner that minimizes the amount of computational
`resources required to detenuine whether a sales agent bas
`valid credential at the time of a particular sale and is therefore
`entitled to compensation (e.g., a commission) for the sale.
`The system may process one or more transactions at a time
`tO and may perform lf311saction processing collectively if such
`processing is desirable.
`In an embodiment of tbe invention, the compensation
`engine or some other software component determines the
`grouping of input such that validation can be performed col-
`tS Jectively (e.g .. in batch). For instance. the compensation
`engine may perform an initialization process where it obtains
`credential information that relates to the sales agents and
`assembles the credential information into a denormalized
`table. The system may obtain credentia l information (e.g.,
`licensing and/or appointment data) from several tables of a
`database and put the credential information into a single
`denonnalized table. The system may also load mle informa(cid:173)
`tion that can be utilized to process the credential information.
`Tllis m le infonnation may be provided to the system in any
`stntctured form (e.g., text, XML. etc ... ) and the mle data
`may comprise a set of tests for determining if a particular
`transaction was valid. lu one embodiment of the invention,
`the system instantiates an instance of an object oriented class
`referred to as the RuleSet class. The RuleSet class and a set of
`associated object reachable from that class (e.g., precondi(cid:173)
`tions, test, etc ... ) provide the fUllctionality referred to as the
`rule engine. Thus, the rule engine may comprise a collection
`of objects working together. However. the invention also con(cid:173)
`templates other software or bardwaremecha11isms configured
`to provide ntle engine functionality. The objected oriented
`examples provided herein arefor illustrative purposes and the
`reader should note that other non-objected oriented programs
`may be configured to provide the ftmctio nality described
`herein.
`Once the ntle information is loaded, au embodiment of the
`invention utilizes the rule infonnation to deiennine if the
`distributor (e.g., sales agent) specified in the transaction was
`properly credited. Thus, the system obtains a set of transac(cid:173)
`tions (e.g .. a batch) associated with one or more sales agents
`and utilizes the transaction data to determine if a commission
`amount associated with each transaction may be credited to
`one or more of the sales agent's accounts. Compensation is
`distributed when the constraints placed on the sales tral1Sac(cid:173)
`tion are satisfied. For example, a sales representative that
`so made a sale tmder an invalid credential (e.g .. a license or
`appointment) will not be compensated for the sales. Thus.
`part of the compensation process involves determining the
`validity of the sales agent's credentials (e.g., license and/or
`appointment data).
`Jn one embodiment oft be invention, the process associated
`with determining whether the credential data is val id involves
`converting each transaction to input usable by the ntle engine.
`A coUective set of mle engine input may then be provided to
`the system to perform val ida I ion. The process 0 f detenuining
`60 whether the transaction input is valid may involve determin(cid:173)
`ing the set ofnlles that apply to the input by filtering thentles
`using a set of preconditions. TI1e set of tests may then be
`partitioned by test type and each test type is associated with
`the transaction input. Once the association occurs a candidate
`65 for each test type is selected and a collective group of the tests
`of a particular type is fonuulated. The group of tests is then
`input to U1e system for processing. The reader should note,
`Exhibit 1019 09/17
`
`·n1ere are many complexities to the financial services busi- 20
`ness. At any given time large amounts of sales transaction data
`must be organized a11d processed. St1ch data may relate to
`many types of sales transactions and much of it is necessary to
`keep the business nullling smoothly. Some of the more sig(cid:173)
`nificant classifications of sales transaction data stem from the 25
`J'ilct that in tbe financial services business there are multiple
`distribution channels each with multiple distributors a nd
`many different incentive plans for employees. In most
`instances, these incentive plans are constantly modified and
`changed. This is particularly true in the financial services 30
`sector where distributors an d sales representatives may
`require certain licenses and appointments in order to legally
`sell certain financia l instruments . The status of the license or
`appointment data changes continuously and must therefore
`be updated on a regular basis. Furthenuore, the volume of 35
`sales transactions is large, and for each transaction a number
`of tests must carried out to validate the sales agents' creden(cid:173)
`tia ls and compute the compensation amotmts associated with
`the sales transactions.
`Updating such a large amount of records is a cumbersome 40
`process thai can require significant system resources. Thus,
`systems must be configured to efficiently validate sales tmns(cid:173)
`actions in view of the licenses and/or appointments necessary
`to legally complete the transaction. Existing systems do not
`currently have a mechanism for processing such data in a way 45
`that minimizes the time required to process license and
`appointment data and validate a sales agent's credentials
`before distributing compensation to the sales agent for the
`transaction. Therefore there is a need for an improved mecha(cid:173)
`nism for processing sales transaction data.
`
`SUMMARY OF TilE INVENTION
`
`An embodiment of the invention comprises a method and
`apparaltiS for perfonuing collective validation of credential 55
`information. The invention has applicability in industries that
`require sales agents or those related to the distribution of a
`certain product to be credentialed (e.g., licensed and/or
`appoin ted) when selling certain products (e.g., life insurance,
`etc ... ). For example, in order to sell some fin<mc ial instm(cid:173)
`ments sales representatives must meet state and/or federal
`licensing requirements. Embodiments of the i1wention pro(cid:173)
`vide a way to ensure that sales representatives operate within
`any regulatory constraints put in place by government or any
`other organization. Companies may, for instance, utilize
`embodiments of the invention to ensure that sales represen(cid:173)
`tatives operate within a set of defined constraints.
`
`

`
`US 7,904,326 B2
`
`DESCRIPTION OF THE DRAWINGS
`
`FIG. 1 shows a flowchart of the steps in an example that
`jlJustrates the validity checks of credentials accordillg to au
`embodiment of the invention.
`FIG. 2 shows a class diagram and relationships represent(cid:173)
`ing object models for licenses (e.g., credentials) in an
`embodiment of the invention.
`FIG. 3 shows a block diagram illustrating data communi(cid:173)
`cation during credential validatio n process in an embodiment
`of the iuventiou.
`FIG. 4 shows a flowchart illustrating the steps involved in
`validating distributors credentials in au embodiment of the
`invention.
`FIG. 5 shows a tlowchart illustrating the steps involved in
`validating credential using an alternative approach to creden(cid:173)
`tia l validation in an embodiment of the invention.
`
`3
`however, that the invention does not require that such test data
`be input collectively (e.g., in batch). The test data (e.g .. tests
`of a particular type) may also be input individually or in any
`other categorical methodology that provides the test data to
`U1e system. The results can be stored in cache for later use by 5
`tbe system.
`For each mle associated with each input, the system deter(cid:173)
`mines if the test conditions are met. If the test conditions are
`met. the transaction data with respect to that test type is
`considered valid. The system may use the cached results to
`determine if the test conditions are met. The results indicate
`which of the trausactious are va lid and can therefore be uti(cid:173)
`lized to determine which sales agents to compensation for a
`particular transaction.
`In an embodiment of the invention, the functionality is t5
`accomplished through the use of a set of software and/or
`hardware components configured to determjne whether a
`sales transaction should result in a credit to the sales agent
`associated with the transaction.ll1e system may perform thjs
`by utilizing a compensation engine configured to communi(cid:173)
`catewith the nlleengine. In one e mbodiment oflhe invention,
`the mle engille comprises a collection of software interrelated
`components.
`
`4
`processing collectively if such processing is desirable. The
`specifics of the improved system for processing such trans(cid:173)
`action data will be described in further detai l below.
`The inventjon may be integrated into an extensible system
`fo r managing relationships between insti111tious (e.g., suppli(cid:173)
`ers/mauufacturers) of a product or service and !be distributors
`(e.g., sales representatives) of their product. Systems
`embodying the invention have applicability in industries that
`require sales agents or those related to the d istribution of a
`10 certain product or service to be credentialed (e.g .. licensed or
`appointed) in order to sell the product. For example, in order
`to sell a certain financ ial instmment a sales representative
`might be required to have a state and/or federal license to sell
`that type of financial instrtm1ent.
`Companies or organizations may utilize the invention to
`enforce agreements the company has with distributors who
`sell their products. Thus, the system may enforce an agree(cid:173)
`ment stating that all sales transactions are to be performed by
`sales representatives or distributors who bave valid credeu-
`20 tials. This provides organizations such as life insurances com(cid:173)
`panies a way to manage the sal e and distribution of life
`insurance plans in a way that coincides with the reg11latory
`constraints of govenm1ent organizatious. Whether a particu(cid:173)
`lar distributor or sales representative is appropriately creden-
`25 tialed can be viewed as a regulatory constrajnt. The system
`ensures that such regulatory constraints are not violated when
`a transaction is executed. Although. licenses and/or appoint(cid:173)
`ments are utilized as examples of the types of credentials that
`may be validated by embodinlents of the invention. the term
`30 credentials as it utilized encompasses any set of constraints or
`requirements associated with a sales transaction. For
`instance, company policies or individual constraints that vary
`on a product by product basis, or any other set of definable
`constraints can also be eulorced by the system by irnplement-
`35 iug such items as "credentials" that may be required for a
`sales representative to be compensated. Transactions that do
`not conform to the government regulations are not typically
`executed and may not therefore result in any compensation to
`the sales representative(s) ordjstributor(s) associated with the
`40 transaction. 1 n accordance with one embodiment of the inveu(cid:173)
`tion. credential checks are collectively submitted to the sys(cid:173)
`tem for processing. Thls decreases the time and resources
`required to process the credential information.
`The invention may use multiple techniques for processing
`'fi1e invention provides a method and apparatus Jor per(cid:173)
`45 the sales transaction data in orderto determine whether a sales
`agent has val id credential at the time of a particular sale and is
`forming collective validation of credential information. In the
`following description, numerous specific details are set forth
`therefore entitled to compensation (e.g., a commission) for
`the sale. l n an embodiment of the invention, a compensation
`in order to provide a more thorough tmderstanding of the
`invention. It will be