The Patents Bill

September 6th, 2012 at 11:00 am by David Farrar

There’s been a fair bit of discussion in some quarters over a two word change to the Bill.

The intent of the bill has been that software not be patentable. This is the case in Europe, and there is a lot of evidence that software patents have been stifling innovation, not fostering it. Actual software code can be copyrighted, but under the proposed law change, software will not longer be patentable. This is welcome by most of the local ICT industry. It stops patent trolls and the like.

However some NZ companies such as Fisher & Paykel Appliances said that software embedded in an appliance should still be patentable. The select committee and the Government agreed to this.

The problem has been how to define it. The bill was going to refer to “embedded software” as being exempt but now the Government has said the definition will be:

A computer program is not an invention for the purposes of this Act … only to the extent that a patent or an application relates to a computer program as such.

I’ve not been able to get a clear feel as to how significant this change is, adding on the words “as such”. Several IP lawyers have said it is good, while the Open Source Society has said it is bad, and they have a petition against the change.

I tend to be in favour of clear law, and think that is what the Government wants. However lawyer and software developed Guy Burgess makes a good case that the new definition is less clear than referrring to embedded software. He blogs:

There is no definition of “embedded computer program” in the Bill, nor does the industry-supported amendment include one. So because it’s undefined in the Bill, that creates “uncertainty”, right?

Wrong. Guess what else is not defined in the Bill, nor by any other law in New Zealand, nor by any Court in New Zealand: “computer program”. So how can there be objection to the lack of a definition for “embedded computer program”, when “computer program” itself is not defined? There can’t – and the same applies to many other terms in the Patents Bill.

The fact is, it is perfectly normal for undefined or hard-to-define terms to be used in laws. 

So Burgess argues it is not a big issue to keep the term “embedded computer program”. He notes it is commonly used:

But it’s not just Fisher & Paykel Appliances who have no difficulty with the term embedded software. A quick search on Seek.co.nz shows there are currently 48 jobs using the phrase “embedded software”, including Embedded Software Engineers, Embedded Software Developers, and so on. So while lawyers, for example, may claim the term is uncertain, the evidence is that the software industry itself has no difficulties with it.

There are many other resources confirming the commonplace use of the term in the IT industry. For example, there are over 42,000 articles on Google Scholar discussing “embedded software”, including from authoritative bodies such as the IEEE andAssociation for Computing Machinery. And of course there have been numerous patentsinvolving “embedded software” already granted.

So how about the alternative proposed by the Government:

Any possible questions about the industry-accepted term “embedded software” pale into insignificance compared to the European-style “as such” exclusion recently introduced into the Bill (i.e. the clause 10A(2) that the petition seeks to replace). If you ever wanted an example of notoriously uncertain, problematic language, it is the European “as such” terminology.

But don’t take my word for it – here’s what the Institute of Patent & Trade Mark Attorneys of Australia said in their 2010 submission to the NZ Minister (and which was expressly endorsed by the Australian Federation of Intellectual Property Attorneys):

[The EPC approach] will still introduce uncertainty and confusion as to the patentability of computer related inventions… The approach in Europe has also led to considerable uncertainty and criticismamongst European industry, the European Patent Office and the Courts… the approach has been often criticised as being inconsistent andcontradictory to the EPC itself… In our view, adopting the EPC approach would create a significant degree of uncertainty as to how the section is to apply and which, in any event, is inherent in the EPO approach.

Burgess concludes:

The exclusion of patents for computer programs remains, but with an express carve-out to ensure patentabilty of inventions containing embedded software – not the embedded software itself. Consequently there is no need to determine whether software is embedded or not to determine whether it is patentable. No “uncertainty” arises: under the industry-supported amendment, no software would be patentable. It’s pretty simple. And it’s entirely consistent with the Select Committee’s unanimous recommendation.

On the other hand, the European-style exclusion (which as the Australian patent attorneys say is uncertain, confusing, inconsistent, contradictory, unpredictable, and costly) is entirely contrary to the Select Committee’s unanimous recommendation.

Burgess makes a good case. I’m not 100% convinced that the proposed change is as dramatic as some claim, and think having the European style exemption is still a big improvement on our current law. But neither am I convinced that the proposed change brings benefits, over the select committee wording, and may be detrimental to our local software industry.

I welcome any op eds from interested parties on this issue.

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29 Responses to “The Patents Bill”

  1. berend (1,709 comments) says:

    Yeah, so since Linux is embedded in my tv it’s now patentable?

    I would be surprised if Fisher & Paykel writes every piece of software. I wouldn’t be surprised they actually run Linux in their fridge.

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  2. guyburgess (3 comments) says:

    Berend: No. There is an important difference between attempting to patent software (ie Linux), and attempting to patent a device that happens to include software (e.g. your TV).

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  3. guyburgess (3 comments) says:

    I’ve not been able to get a clear feel as to how significant this change is, adding on the words “as such”.

    It is very significant, because those two seemingly harmless words have undermined the supposed “exclusion” of software patents in Europe. That’s why patents are now available in Europe for things like:
    – a pop-out-context-menu;
    – selling things online;
    – long filenames;
    – etc.

    And that is the last minute change that the Government has introduced here.

    Perhaps the best evidence is the press release issued by NZICT (representing sofware patent holders) following the “as such” words being added, that describes the exclusion as a thing of the past:

    Importantly, Clause 15(3A) would have excluded computer programs from patentability…

    Yes, it would have, but now not so much.

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  4. Lance (2,655 comments) says:

    @berend
    We have developed a method of managing hot water that has taken us 3 years to perfect and a shit load of R+D money. Microprocessors (and other programmable logic blocks) have largely over taken from discrete hardware so instead of describing or drawing the hardware that makes a certain function possible, the latest method is to describe the algorithm and protect that.
    The issue Fisher and Paykel will be highlighting is more firmware/algorithms like this.

    I agree general software routines should never be patented, there are a world of money grabbing trolls but there are also hard working people who need to protect their specific hard work. Otherwise why bother with R+D?

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  5. Redbaiter (8,823 comments) says:

    All completely futile legislative rubbish.

    All attempts to write law relating to the nebulous concept of “intellectual property rights ” must be abandoned on the grounds that trying to legislate to protect this concept is too difficult.

    The attempts to define any breaches are far too wide ranging, and impinge on basic freedoms to an extent that is not tolerable in a supposedly civilized and enlightened society.

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  6. davidp (3,581 comments) says:

    Lance>We have developed a method of managing hot water that has taken us 3 years to perfect

    Is there a case for patenting an algorithm, rather than the software implementation of that algorithm?

    And should Apple still be able to patent the idea of gadgets having rounded corners?

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  7. guyburgess (3 comments) says:

    DPF, you may have gotten the wrong end of the stick on a couple of points:

    The intent of the bill has been that software not be patentable. This is the case in Europe…

    It is not really the case in Europe, because the “as such” wording has undermined the exclusion.

    I tend to be in favour of clear law, and think that is what the Government wants.

    The original exclusion (ie the unanimous Select Committee wording) was clear. Unfortunately, the last-minute “as such” change by Craig Foss has made it very unclear, as evidenced by the problems it has caused in Europe. The petition proposes a way of fixing the Bill that retains the clear exclusion of sofware patents, but also expressly preserving the ability of Fisher & Paykel to patent inventions that happen to contain embedded software.

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  8. Monique Watson (1,062 comments) says:

    I was just going to say, where are Redbaiter and calender Girl. They should be all over this like white on rice.
    Do we really want to be more like Europe. And of course none of the local ICT industry which is basically the open source community want software to be patentable. they’re s bunch of copycats and that is what stifles innovation. That and the fact they can’t utilize useful software without paying license fees. but it should be free, right? It’s just software.

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  9. lightweight (13 comments) says:

    As someone whose been fairly heavily involved in this process I’d like to address Lance and Berend’s mistaken impression. The Patents Bill IS NOT making “embedded software” patentable. It doing something subtly (but importantly) different: it is saying that inventions which *include embedded software* are STILL patentable. But, crucially, the SOFTWARE part of the invention is not patentable.

    As for the assertion that investment in R&D must be protected, I state that such protection is not a right. It’s a government granted monopoly under *certain* conditions. Those conditions are meant to be spelled out in the Patents Bill as unambiguously as possible. At the moment, I strongly believe the Minister’s wording, particularly borrowing the European Patent Convention term “as such” is *not* the best way to achieve their goal, which is clearly to make software un-patentable.

    The wording proposed by the http://softwarepatents.org.nz petition is better, from a legal precedent and from an industry support point of view. It is also *no less safe* for NZ with regard to international treaty obligations than the proposed SOP “as such” wording. We now need to help the Minister to recognise that.

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  10. peterwn (3,271 comments) says:

    The patent law amendment should spell out the purpose of the amendment and possibly (as Singapore legislators do) give examples of what would be patentable and not patentable. See:
    http://www.legislation.govt.nz/act/public/1999/0085/latest/DLM31469.html – Interpretation Act 1999 s5, particularly:
    “The meaning of an enactment must be ascertained from its text and in the light of its purpose” (but read all s5).

    Spelling out the purpose would greatly reduce the chance of a court applying a gloss to the Act which was not intended by Parliament. Aids to discerning the purpose include the Minister’s introductory speech, the Select Committee report and Hansard records of the debate, etc, etc. But a ‘purpose’ stated in the legislation whether it be the ‘preamble’ to older legislation or a ‘purpose’ section in modern legislation would be more persuasive than these ‘external’ sources.

    As recent high profile tax avoidance cases (Aussie banks, Trinity forest and Cristchurch surgeons) have shown, interpretating tax avoidance legislation in a purposeful way instead of traditional ‘black letter’ interpretation has really helped IRD crack down on abusive avoidance. It has caught tax lawyers and accountants by surprise despite a warning in NBR (I think) 20+ years ago that the tide was starting to turn on ‘black letter’ interpretation.

    Interestingly it would have been a breach of Parliamentary privilege for lawyers or a court to refer to Parliamentary sources without the Speaker’s permission, but some years back the UK Speaker could see no problem with this in general and NZ Parliament quickly followed suit.

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  11. lightweight (13 comments) says:

    Also, Monique Watson, you’re making indefensible representations of the FOSS community. More importantly, you’re mischaracterising the discussion. This is a debate between the IP lawyer community and the software industry. You’ll find that software developers, both proprietary and open source, are largely in support of the Petition and proposed wording. I’m afraid your entire point of view is fundamentally wrong. I encourage you to try to get your head around that.

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  12. drllau (8 comments) says:

    > And of course none of the local ICT industry which is basically the open source community want software to be patentable.
    Ignoring the ad-homien attack on copycats, I refer all to the US ruling on Akamai v Limelight (http://www.cafc.uscourts.gov/images/stories/opinions-orders/09-1372.pdf). Akamai creates infrastructure (incidentally hearsay is that it was based on squid proxy-server which therefore falls into copycat territory by your definition) but in this case, their patent covered using a portal to access health information. Now Limelight provided similar except that the patients undertook the last step. The courts ruled that this was induced infringement (the question of split infringement left unanswered).

    So can you imagine being an innocent user of a product (licensed not sold) then suddenly being locked out due to the court deeming you indirectly infringed on a patent?

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  13. Lance (2,655 comments) says:

    @davidp
    “should Apple still be able to patent the idea of gadgets having rounded corners?”

    Absolutely not, it is an obscenity to all that is right. I agree the patent system has long ago lost its way, I frequently see patents granted on items that, according to the concepts of patent-ability (cannot already exist, be an obvious progression of prior art or actually be a real invention) should never have been granted.
    But where vast sums of money (and or time) have been spent on a truly inventive step in technology then the patent is just.

    And we are patenting the algorithm but lines of code are being presented to prove its operation. So is it algorithm, firmware or software?

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  14. dave2 (3 comments) says:

    The meat of what F&P and others want to do is laid bare in comments to this post: patent algorithms. This “embedded” definition is just a smokescreen hoping to trick people into thinking that somehow because the software is sufficiently invisible (to whom, is not important), that it’s special and deserving of protection more visible software would never receive.

    It’s nonsense. Guy Burgess is quoting job listings as evidence the term has meaning? It’s not a line that is at all clear and doesn’t change the fact it’s still software. Software on a restricted platform or resources is still software.

    I do a bit of what you could called “embedded” development and design, and I know what such development really involves. Subtle hint: it’s just still software.

    DPF: I could op-ed if you wanted, but I already wrote something up on my blog saying more or less this. :)

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  15. drllau (8 comments) says:

    Lance wrote
    >I agree general software routines should never be patented, there are a world of money grabbing trolls but there are also hard working people who need to protect their specific hard work. Otherwise why bother with R+D?

    Patents offices have traditionally applied the method+apparatus. If your apparatus is completely redesigned and incidentally uses a microprocessor, then it would still be eligible for patent protection. What the software patent excludes, on the grounds that it is not deemed an “invention” for the purpose of Patent Bill, are pure method claims. The Statute of Monopolies considers Products and Processes which clearly your invention falls under. However, if you look at modern software development, the Agile school considers it a testable hypothesis, thus software is a continually changing set of POSSIBILITIES. I think most people would find it hard to grant an exclusive claim on the chance that an idea MAY work (remember the standards have dropped in that you don’t need to provide a working enablement or be so ambiguous to slip it pass the patent office … perhaps why the Aussies finally managed to patent the wheel … http://www.newscientist.com/article/dn965-wheel-patented-in-australia.html )

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  16. Lance (2,655 comments) says:

    @dave2
    So if the function was implemented in discrete components it would be patentable, but if embedded it is not. Seems a bit odd to me.

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  17. drllau (8 comments) says:

    PeterW wrote
    >Spelling out the purpose would greatly reduce the chance of a court applying a gloss to the Act which was not intended by Parliament. Aids to discerning the purpose include the Minister’s introductory speech, the Select Committee report and Hansard records of the debate,

    And here I am, thinking that we live in a democracy following clearly written rules. If the Select Committee made a unaminous ruling in 2010 and the Minister goes ahead and changes the meaning to complete opposite (http://en.swpat.org/wiki/As_such#As_such), it’s like playing a game of rugby only to find out the ref has put in a soccer goalbox. Competing overseas is not a problem, local firms just have to play smarter and run the ball faster. But changing the goalposts halfway through the match is hardly fair play. If the Minister wishes to revisit the question, then he should convene a Select Committee for public hearing and not slip the changes through under guise of “minor corrections”.

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  18. somewhatthoughtful (465 comments) says:

    “And of course none of the local ICT industry which is basically the open source community want software to be patentable. they’re s bunch of copycats and that is what stifles innovation. That and the fact they can’t utilize useful software without paying license fees.”

    And the award for person who has no idea what the hell she’s talking about goes to…..

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  19. chrisw76 (85 comments) says:

    davidp> And should Apple still be able to patent the idea of gadgets having rounded corners?

    If they had done that, then yes there would be an issue. The fact of the matter that is that they haven’t and the characterisation by Samsung is a deliberate attempt to muddy the waters over their infringement of the design patents in question (note they are design patents, not regular ones).

    Cheers, Chris W.

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  20. dave2 (3 comments) says:

    @Lance if it’s implemented as discrete logic, it is no longer an algorithm, because you’re describing a physical arrangement of hardware. You’d also probably find that someone else already did this, as the number of novel ways to control things like temperature is quite limited.

    It’s perfectly acceptable to patent a physical arrangement of hardware. An algorithm is not, as has been established by a large body of patent processes. The fact you’re obviously trying to backdoor this under the “embedded” claim is where the problem lies.

    Put another way, if your “invention” was not patentable if it was software loaded on a PC, why is it patentable if it’s burned into an MCU? It’s still a CPU executing code, it’s still software. You haven’t explained why your “embedded” clause makes it special.

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  21. Lance (2,655 comments) says:

    @dave
    You sound like you are saying ‘everything that can be invented with discrete digital logic has been invented’.

    I call bullshit on that. Serious drivel.
    Also
    “as the number of novel ways to control things like temperature is quite limited”
    I call bullshit on this as well.

    In also don’t understand your ‘backdoor’ comment?
    We are using a process that is part logic, part physical and has little connection to PC concept. The microprocessor replaces parts. To discrete it all out would fill a fucking room, mind you it would work the same.

    So we like spend 3 years R+D, a few $100K and we have something no one else has, or is even close to. And it shouldn’t be protected?

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  22. berend (1,709 comments) says:

    Lance: But where vast sums of money (and or time) have been spent on a truly inventive step in technology then the patent is just.

    I have some sympathy for that view, but only in a jurisdiction where a jury consisting of your peers, i.e. nz software professionals, can be called upon to either accept or reject your patent.

    Since we won’t be getting that system, and since jurors really don’t get it (Samsung versus Apple) I’m sorry that software won’t be patentable in NZ.

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  23. Raphael (88 comments) says:

    @chrisw76 Actually Apple stated that in their complaint.
    http://www.pcworld.com/businesscenter/article/225513/apple_sues_samsung_says_it_copied_ipad.html?tk=rel_news
    “The copying is so pervasive, that the Samsung Galaxy products appear to be actual Apple products — with the same rectangular shape with rounded corners, silver edging, a flat surface face with substantial top and bottom black borders, gently curving edges on the back, and a display of colorful square icons with rounded corners”

    Specifically in the German lawsuit they claimed Samsung was violating Community Design #000181607 which shows a line drawing of a rectangular tablet with rounded corners.
    link contains a copy of the Community Design: http://www.scribd.com/doc/61944044/Community-Design-000181607-0001

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  24. dave2 (3 comments) says:

    @Lance software is not patentable. You haven’t explained why your software, hidden as it is, deserves protection when other software is not protected.

    All you’ve done is bleat about your costs and how it’s all too hard to do this without software, and not actually explained at all why your software is different to any other piece of software.

    That your MCU replaces a bunch of discrete logic does not make it any less software.

    It’s a “backdoor” because if this vague bullshit reasoning that “hidden” means “special” is accepted, it opens the door to a massive array of bullshit patents which amount to existing process but with software. And you can be certain the bar will be raised so high it may as well cover all software.

    Explain the difference. When you can explain how software in one form is different to software in another, then you might get somewhere with your own bullshit arguments.

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  25. chrisw76 (85 comments) says:

    @Raphael: @chrisw76 Actually Apple stated that in their complaint.
    http://www.pcworld.com/businesscenter/article/225513/apple_sues_samsung_says_it_copied_ipad.html?tk=rel_news
    “The copying is so pervasive, that the Samsung Galaxy products appear to be actual Apple products — with the same rectangular shape with rounded corners, silver edging, a flat surface face with substantial top and bottom black borders, gently curving edges on the back, and a display of colorful square icons with rounded corners”

    I think you are misreading this. The complaint Apple is making in your quote is the combination of a number of design elements of which a rectangular shape with rounded corners is one. They are not claiming a rectangular shape by itself.

    In the actual suit just decided in the US, Apple actually lost on the iPad design patent infringement claim so Samsung must have been sufficiently different.

    In terms of the European community design, this is different to a patent, but does have a similar 25 year life (if renewed periodically). Like a design patent though its scope is narrow. Apple got an injunction in Germany back in July, but I don’t have access to the decision to review the logic, though I would be 100% certain that it is more nuanced than “rectangle with rounded corners”.

    Cheers, Chris W.

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  26. slijmbal (1,236 comments) says:

    Patents for software is ludicrous about 99.99% of the time

    Most patents are obvious and silly and reflect the use of money and process than any real innovation. I still come back to having determined an approach for single click checkout but Amazon patented it – it was both obvious and previously invented. This is a prime example.

    There are definite unique pieces of invention that are not self evident but these are fairly rare and the idea that possibly getting real professionals to look at them might not be a bad idea. Judges and Lawyers on the whole apparently have no real understanding.

    I spent time doing some IT work for the NZ patent office – I was totally unimpressed by the approach used by them to determine what was patentable. They had nowhere near the rather broad level of competence required and used very limited definitions.

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  27. drllau (8 comments) says:

    Chris wrote
    >I think you are misreading this. The complaint Apple is making in your quote is the combination of a number of design >elements of which a rectangular shape with rounded corners is one. They are not claiming a rectangular shape by itself.

    Would this fall under general category of patent abuse? I would have thought Apple would have protected their look & feel through tradedress (think format of a TV show, stylistic, presentation, format etc). Trying to slip this into patent just to take advantage of caselaw seems to be trying to distort a legal system not designed for it. I suppose it is not surprising after that cigarette company redomiciled in HK to sue the Australian govt over plain packaging. companies do whatever they can within the creative boundaries of legislative wording. But if you ask the average person on the street, I think they have a social sense of fairness. And this applies to having ministers promise one outcome and (surprise) delivering the opposite.

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  28. Martin (8 comments) says:

    To rip off a piece of software some one either has to copy it or reverse engineer it.

    Copying is quick and easy, but is already protected by copyright. Anyone going down this path *won’t* care about patents.

    Reverse engineering is a specialist job. It is both expensive and prone to error. So before anyone goes down this path they will have to be convinced that it is worth the time and effort. Which means that the original item has to be successful. Once they have reverse engineered it they then have a code base that they will have to rewrite or modify for their own product. Which involves further development and testing. During this entire time they are not adding new features – but the original successful program will be. Hence by the time the copy gets to market, it will all ready be out of date. There’s a reason why successful open source programs aren’t forked very often.

    Software shouldn’t be patentable. It’s already covered by copyright.

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  29. drllau (8 comments) says:

    Martin wrote
    > To rip off a piece of software some one either has to copy it or reverse engineer it.

    There is a 3rd option which is expressly allowed by law. Wrap the protocol for compatibility, so the original software developer still has the product, but others can design in backwards compatibility. The classic examples are Samba. This relies on the APIs being published and as the recent Oracle Java case showed, APIs are not copyrightable. The reason why software patents don’t work in practice is that their boundaries are fuzzy. Due to the way claims are written (and interpreted) unlike hardware there is no sharp edge between your product and someone else’s. Non-performing-entities have taken advantage of this vague boundary to demand licensing fees without actual enablement much less creating a working marketable product. I’ve seen some papers which estimate it costing the high-tech industry up to half-trillion dollars. This comes through as slower development or higher prices … eg did you know one prominent software vendor insists on a fee, irregardless of whether OEMs ships their software or not?

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