Patent-pending technology is designed to cause royalty-payment entitlements to follow Intellectual Property Securities automatically when they are sold, transferred, gifted or otherwise reassigned
NEW YORK — September 10, 2026 — Intellectual Property Securities Corporation (“IPSE”) today announced the filing of a United States patent application covering its Royalty Entitlement Cheque, a persistent, reusable and transfer-aware entitlement mechanism designed to direct royalties and other intellectual-property-derived revenues to the persons entitled to receive them at the time each distribution becomes payable.
The Royalty Entitlement Cheque addresses a fundamental problem that arises when intellectual property interests are transformed into transferable financial instruments: how to ensure that recurring royalties continue to reach the correct beneficiary after the underlying Intellectual Property Securities have changed ownership.
Unlike a conventional cheque, which is issued, deposited and extinguished after a single payment, the Royalty Entitlement Cheque is designed to remain associated with an Intellectual Property Security for as long as the security exists. At every royalty-distribution event, it identifies—or enables the relevant systems to identify—the person or account presently entitled to receive the payment.
When an Intellectual Property Security is sold or otherwise transferred, the Royalty Entitlement Cheque follows the transferred security. It thereby redirects future royalties from the former holder to the new holder, subject to the governing contracts, applicable law, settlement finality, record-date rules and the official ownership records maintained by the appropriate registrar, transfer agent, custodian or other authorized recordkeeper.
The Royalty Entitlement Cheque is intended to become the missing operational link between a transferable intellectual property interest and the recurring income generated by that interest,” said Marc Deschenaux, President of Intellectual Property Securities Corporation. “Intellectual property can produce revenues for decades and may change hands many times. The entitlement to those revenues must therefore be capable of moving with the security accurately, proportionally and transparently.
What Is the Royalty Entitlement Cheque?
The Royalty Entitlement Cheque is not merely an instruction to make one payment. It is a persistent representation of a recurring economic entitlement associated with one or more units of an Intellectual Property Security.
In practical terms, it functions as a continuing payment-direction mechanism. As long as an eligible Intellectual Property Security remains credited to a holder’s securities account—or is otherwise registered in the holder’s name—the corresponding Royalty Entitlement Cheque causes, authorizes or facilitates the allocation of applicable royalty distributions to that holder.
The mechanism can be represented electronically through a centralized database, transfer-agent record, book-entry system, distributed ledger, tokenized record or another authorized technological architecture. It is not dependent upon cryptocurrency, blockchain technology or any particular settlement network.
The word “Cheque” describes its payment-directing function. The invention is not necessarily a conventional bank cheque, negotiable instrument or cryptocurrency token. Its principal purpose is to maintain a reliable connection among:
- the intellectual property asset;
- the security or participation unit associated with that asset;
- the current holder of the security;
- the royalties or other revenues attributable to the security;
- the account authorized to receive the corresponding payment; and
- the records evidencing how the entitlement was created, transferred, divided, suspended, modified or extinguished.
A Reusable Cheque That Is Not Consumed by Payment
A conventional cheque ordinarily performs one transaction. Once paid, it has completed its purpose.
The Royalty Entitlement Cheque is fundamentally different. It is designed to remain active through successive payment cycles. It may direct monthly, quarterly, semiannual, annual or event-driven royalty payments without being cancelled merely because one distribution has been completed.
For example, a movie may generate theatrical receipts, streaming revenues, television licensing payments, international distribution income, merchandising proceeds and other contractual revenues over many years. A musical composition may generate performance, mechanical, synchronization, digital-platform and neighboring-rights royalties. A patent may generate recurring licensing fees, milestone payments or usage-based royalties.
The Royalty Entitlement Cheque can remain associated with the relevant Intellectual Property Securities throughout these recurring revenue events, permitting each distribution to be allocated to the holder entitled to receive it at the applicable time.
How the Royalty Entitlement Cheque Works
The contemplated process begins when intellectual property rights or defined revenue interests are associated with a series or class of Intellectual Property Securities.
Each Royalty Entitlement Cheque may contain, reference or interact with information such as:
- the identity of the intellectual property asset;
- the security class, series or identification number;
- the number of units represented;
- the category of royalty or revenue covered;
- the contractual basis of the entitlement;
- the applicable royalty percentage or allocation formula;
- the holder’s registered account or securities-account identifier;
- record-date and payment-date information;
- payment instructions or a verified payment destination;
- tax-withholding and reporting information;
- transfer restrictions, liens, pledges or legal holds;
- prior distributions and adjustments;
- the chain of title and transfer history; and
- an auditable record of calculations, approvals and payments.
When royalties are received or become distributable, the system can determine the amount attributable to the relevant intellectual property, apply the governing distribution rules and identify the eligible holders as of the applicable record date.
The Royalty Entitlement Cheque then enables the distributable amount to be allocated among those holders according to the number and class of Intellectual Property Securities held by each of them.
The Royalty Entitlement Cheque may work in conjunction with IPSE’s broader royalty-administration infrastructure, including the contemplated Royalty Collecter, as well as transfer agents, registrars, custodians, paying agents, banks, broker-dealers, collecting societies, distributors, licensees and other authorized participants.
What Happens When the Security Is Transferred?
The central innovation of the Royalty Entitlement Cheque is its ability to respond to a change in ownership.
When an Intellectual Property Security is sold, donated, inherited, assigned or otherwise transferred, the official ownership records are updated through the applicable transfer and settlement process. Upon confirmation of the transfer, the royalty entitlement associated with the transferred units can be redirected from the former holder’s account to the new holder’s account.
The former holder remains entitled to distributions established under the applicable record-date rules before the transfer. The new holder becomes entitled to subsequent distributions according to the governing terms of the security and the timing of the completed transfer.
The mechanism is therefore designed to distinguish among:
- the trade date;
- the settlement date;
- the record date;
- the date on which the royalty was earned;
- the date on which the royalty was received;
- the declaration or determination date; and
- the payment date.
These distinctions are important because a royalty may be economically generated during one period, reported during another and paid at a later date. The Royalty Entitlement Cheque can apply the predetermined contractual rules governing which holder is entitled to each distribution.
Partial Transfers and Proportional Division
The Royalty Entitlement Cheque is also designed to accommodate partial transfers.
Consider a holder who owns 100 units of an Intellectual Property Security associated with a motion picture. If the holder sells 40 units and retains 60, the recurring royalty entitlement can be divided proportionally.
Following completion of the transfer:
- the seller’s Royalty Entitlement Cheque continues to represent the royalty entitlement associated with the remaining 60 units; and
- the purchaser receives the royalty entitlement associated with the acquired 40 units.
Future distributions can then be allocated 60% to the continuing holder and 40% to the new holder, assuming all units have equal economic rights and no different contractual allocation applies.
The same mechanism can support multiple successive transfers, transfers among numerous holders, fractional interests, different security classes and differing distribution priorities.
Designed to Prevent Misrouted and Duplicate Payments
Without a transfer-aware royalty mechanism, an issuer or royalty administrator may continue paying a former owner after the related economic interest has been transferred. Alternatively, payments may be suspended while ownership records are manually reconciled, or both the transferor and transferee may assert entitlement to the same royalty.
The Royalty Entitlement Cheque is intended to reduce these risks by providing a controlled link among the security position, the official holder record and the payment destination.
Depending on its implementation, the mechanism may include
- validation of the holder’s identity and account;
- confirmation that a transfer has settled;
- prevention of duplicate payment instructions;
- reconciliation against transfer-agent and registrar records;
- exception handling for disputed ownership;
- suspension during legal holds, sanctions screening or incomplete documentation;
- confirmation that the security remains outstanding and eligible;
- proportional allocation following partial transfers;
- generation of payment and tax-reporting records; and
- maintenance of a complete audit trail.
These controls are intended to improve the accuracy, transparency and administrative efficiency of royalty distributions. They do not eliminate the need for legally authoritative books and records, proper custody, regulatory compliance or human review when an exception or dispute arises.
The Entitlement Follows the Security
The Royalty Entitlement Cheque embodies a simple principle:
The right to receive future distributions should follow the ownership of the Intellectual Property Security to which those distributions are attached.
This principle is easy to express but operationally complex. Intellectual property revenues may originate from many different sources, including:
- motion-picture exhibitors and distributors;
- streaming platforms;
- television networks;
- music publishers;
- performing-rights organizations;
- mechanical-rights organizations;
- record labels;
- patent licensees;
- franchisees;
- merchandising partners;
- advertising platforms;
- collective-management organizations; and
- foreign royalty-collection societies.
Payments may be received in different currencies, jurisdictions and accounting periods. They may be subject to contractual deductions, reserves, recoupment provisions, taxes, collection fees and distribution priorities.
At the same time, the securities associated with those revenues may be transferred through separate financial-market infrastructure.
The Royalty Entitlement Cheque is intended to connect these two environments: the intellectual property revenue chain and the securities ownership chain.
It Does Not Create a Royalty Where None Exists
The Royalty Entitlement Cheque does not independently create an economic entitlement. The entitlement must arise from the applicable contracts, intellectual property rights, security terms or other legally enforceable arrangements.
The mechanism is designed to identify, administer and route an existing entitlement. Its function is not to enlarge the rights granted to a holder beyond those established in the governing legal documents.
Accordingly, a Royalty Entitlement Cheque may be configured to reflect:
- ownership-based participation;
- licensing revenues;
- assigned royalty interests;
- revenue-sharing arrangements;
- contractual payment priorities;
- minimum guarantees;
- recoupment waterfalls;
- reserves and holdbacks;
- territorial limitations;
- duration limits; and
- termination or reversion events.
If the underlying right expires, is terminated, is invalidated or ceases to generate distributable income, the corresponding Royalty Entitlement Cheque can be suspended, modified or extinguished in accordance with the governing terms.
Not Necessarily a Cryptocurrency or NFT
The Royalty Entitlement Cheque may be implemented using tokenized technology, but tokenization is not essential to the invention.
It may operate through conventional book-entry records maintained by a transfer agent or registrar. It may also be represented through a controlled digital token, distributed ledger entry, smart-contract instruction or interoperable database record.
Regardless of the technical implementation, the authoritative entitlement must remain subject to the applicable contractual, corporate, securities, payment, tax, privacy and intellectual property laws.
The Royalty Entitlement Cheque is therefore designed as an infrastructure concept rather than as a speculative digital asset.
Application Across Intellectual Property Categories
Although the mechanism is particularly relevant to film and music royalties, the Royalty Entitlement Cheque is intended to be adaptable to numerous categories of intellectual property and intangible assets, including:
- motion pictures and television productions;
- musical compositions and sound recordings;
- patents and patent licenses;
- trademarks and branded merchandise;
- literary works and publishing rights;
- software and technology licenses;
- video games and interactive media;
- image, personality and publicity rights;
- franchises and format rights; and
- other contractual revenue interests derived from intellectual property.
The mechanism may also support different types of Intellectual Property Securities, including securities representing ownership interests, licensing interests, assignments of royalty streams or other defined economic participations.
Benefits for Intellectual Property Owners and Investors
For intellectual property owners, the Royalty Entitlement Cheque is intended to facilitate access to investment capital without requiring the permanent sale of the entire intellectual property asset. An owner may structure and distribute a defined portion of ownership, licensing income or royalty revenues while retaining other rights.
For investors, the mechanism is intended to provide a clearer operational connection between the acquired security and the recurring income associated with it.
For issuers, transfer agents and royalty administrators, the invention may reduce the need to recreate or manually revise payment instructions every time a security changes ownership.
For collecting societies, distributors and licensees, the system may provide a structured destination for payments while permitting downstream allocation to be administered through authorized securities and payment infrastructure.
For auditors and regulators, the mechanism is intended to produce a traceable record connecting each distribution to the applicable intellectual property asset, contractual entitlement, security position, holder and payment.
Part of IPSE’s Intellectual Property Market Infrastructure
The Royalty Entitlement Cheque is being developed as part of IPSE’s broader objective of creating market infrastructure for Intellectual Property Securities, a proposed category of financial instruments through which defined interests in intellectual property and intellectual-property-derived revenues may be structured, administered and transferred.
IPSE’s model is intended to support direct and transparent connections among intellectual property rights, securities ownership and recurring distributions. The Royalty Entitlement Cheque is expected to play an important role in maintaining that connection after issuance, particularly when securities are traded or otherwise transferred among investors.
Issuing an Intellectual Property Security is only the beginning,” Deschenaux added. “A functioning intellectual property market also requires dependable post-issuance administration. The Royalty Entitlement Cheque is designed to ensure that the economic benefit remains connected to the rightful holder throughout the life of the security.
Financing acknowledgment
The development, preparation and/or prosecution of the invention was financed by Mr. Darren Mark Horvath & Ms. Stephanie Ernst.
Such financial support does not constitute inventorship and, except as may be separately established by written assignment or agreement, does not confer any ownership interest in the invention or resulting patent rights.
Media Contact
Intellectual Property Securities Corporation
Attn: Corporate Communications
Contact Person: Skender Djendoubi
Email: Skender@IPSEcorp.com
Telephone: +1 (646) 246-5157
Website: IPSEcorp.com
