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Cato Institute Critique of Software Patents 242

binarybits writes "I've written an article for the free-market Cato Institute about how patents impede innovation in the software industry. It points out that people tend not to realize how vast the software industry is. It's not just Google and Microsoft; virtually every organization has an IT department producing potentially-infringing software. Organizations as diverse as J. Crew and the Green Bay Packers have been sued for patent infringement. It's crazy to expect all these organizations to worry about potential patent infringement. Hopefully the Supreme Court's Bilski decision will lead to new limits on software patents."
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Cato Institute Critique of Software Patents

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  • Excellent, but... (Score:5, Insightful)

    by Anonymous Coward on Sunday August 30, 2009 @03:23PM (#29254139)

    do you really expect rational arguments in favor of the public good to be of any help against entrenched interests in this matter?

    • Re:Excellent, but... (Score:5, Interesting)

      by Trepidity ( 597 ) <[delirium-slashdot] [at] [hackish.org]> on Sunday August 30, 2009 @03:43PM (#29254271)

      Even from that perspective, it might be of some use. I'm not always a big fan of the Cato Institute, but they're influential among free-market conservative politicians. When it comes to entrenched interests with lots of lobbyists, Cato is one of them, so them lining up on this side could be useful. Of course, it remains to be seen how strong the support is--- will Cato actively lobby against software patents, or just publish the occasional article?

      • Re: (Score:3, Insightful)

        by Alaska Jack ( 679307 )

        Hilariously wrong. Cato is a *libertarian* think tank. They have next to no influence, compared to the usual K-street actors (AARP, unions, industries of all kinds, trial lawyers, environmentalists, etc.)

        Think about it: What libertarian policies have you seen Congress adopt recently?

            - Alaska Jack

        • by Trepidity ( 597 )

          Remember the Bush tax cuts? Remember the Cato-speared attempt by Bush to privatize Social Security? And who do you think is spearheading opposition to public health care at the moment?

          Cato's got the ear of a whole lot of Republicans.

          • Remember the Cato-speared attempt by Bush to privatize Social Security?

            Was Social Security privatized? I don't think so.

            And who do you think is spearheading opposition to public health care at the moment?

            CATO is but one cog in the machines opposing socialized medicine.

            Cato's got the ear of a whole lot of Republicans.

            And those Republicans don't alway listen, whereas others who are not Republicans listen to CATO as well.

            Falcon

          • Re: (Score:3, Insightful)

            The Republicans at least listened to a great, libertarian idea. Too bad the Democrats didn't...
    • by Dreadneck ( 982170 ) on Sunday August 30, 2009 @04:32PM (#29254617)

      do you really expect rational arguments in favor of the public good to be of any help against entrenched interests in this matter?

      Rational arguments that are logically sound and easily understood actually are of help in this matter.

      No matter how powerful entrenched interests appear to be, their power is dependent upon a majority of the people tolerating or being ignorant of their bad behavior and its consequences.

      Convince enough of the people, with sound argument, that they are being negatively impacted and they will raise hell until the situation is remedied.

      Politicians may be bought and sold by the special interests but ultimately, if the people become angered enough to speak up and act, the pols do what their constituents demand. Why? Because they can't enrich themselves if they get kicked out of office.

      There's a reason that the entrenched powers seek to control the flow of information and, subsequently, to control public perception by way of opinion makers, so-called "experts" and commentators, who dictate the terms and content of both sides of the argument.

      Think about it and you will quickly see why "rational arguments in favor of the public good" are important.

      Hint: "It's simple - free your mind and your ass will follow." -- Junior, Platoon

    • do you really expect rational arguments in favor of the public good to be of any help against entrenched interests in this matter?

      What interests are those, the interests of software companies like Microsoft? "Microsoft [infoworld.com] to pay $60 million to settle patent-infringement, antitrust claims". "Jury rules for Alcatel in Microsoft [reuters.com] patent case". As TFA say, some businesses take out software patents as a means of legal defense, someone sued them over infringement and they may be able to use their own patents as a

      • Comment removed based on user account deletion
        • Tort reform (Score:4, Insightful)

          by falconwolf ( 725481 ) <falconsoaring_2000@yah o o .com> on Sunday August 30, 2009 @10:23PM (#29256809)

          The only ones I could see supporting software patents are some patent lawyers.

          Well, then we are screwed, because tort reform of any kind certainly isn't in the interests of the current political party that happens in be in power in Washington.

          Let me first get this out of the way, I don't consider patent reform as being anything like tort reform. And I certainly don't want to make it easier for someone to get away with messing up a person's life. Because of someone's recklessness I was left with a disability when I survived an injury I wish I had died from.

          On second thought, I'm too angry to recall what I was going to write so there is no follow up.

          Falcon

    • Comment removed based on user account deletion
  • FTFA: They also sign broad cross-licensing agreements with other large firms promising not to sue one another. This has prevented patents from bringing the software industry to a standstill, but it's hard to see how the practice promotes innovation.
    This is defense from a lawsuit by a company that makes useful products. It doesn't help against patent trolls.
    • Re: (Score:3, Insightful)

      This is defense from a lawsuit by a company that makes useful products. It doesn't help against patent trolls.

      Basically, if you own a patent, you're actually better off not producing any products.

      • There's some truth to this. The company AMI Semiconductor stole a bunch of my patent-pending ideas back in 2000 and produced the Express Arrays with them. Basically, they paid us enough money to barely stay in business while we helped with the first array, and when it worked, they killed the deal, and took the technology. They crippled my little company, but we struggled and stayed alive. Had I gone after AMI, they would have killed us with court costs. One alternate plan I had if AMI succeeded in kill

        • As the other poster suggested, sell the patents to a patent troll. This is standard operating procedure for a number of companies that do make things these days. Keep a few patents that aren't particularly interesting, but are enough to make everyone sign a cross-licensing agreement, but sell everything that's interesting to a patent troll for a small fixed fee, a percentage of whatever they make from it, and non-exclusive perpetual license to the patent. You don't have to waste time or money on lawsuits
        • Did you at least egg their cars?

    • Re:Cato Rocks (Score:4, Insightful)

      by bkpark ( 1253468 ) on Sunday August 30, 2009 @04:15PM (#29254473) Homepage

      This is defense from a lawsuit by a company that makes useful products. It doesn't help against patent trolls.

      So far, I think the only thing stopping patent trolls have been that companies that do make useful products have more resources, better legal department, and bigger war chest (yay, capitalism).

      But the way lawyers have been getting their way in everything, especially in the D.C., who knows how long this will last.

  • Assholes (Score:3, Insightful)

    by Kell Bengal ( 711123 ) on Sunday August 30, 2009 @03:28PM (#29254167)
    There are three things that turn otherwise sensible people into assholes: money, cars and sex. So long as somebody thinks there's money to be made with them, they'll be around.
  • by kanweg ( 771128 ) on Sunday August 30, 2009 @03:33PM (#29254201)

    Patent attorney here. Yes, software patents shouldn't be there. Patents are there to stop people from sitting on their ideas. Stopping people from sitting on their ideas helps society, because it give society more knowledge. However, for software there is no need for this mechanism. There is no shortage of innovation because of lack of progress. If one person doesn't think of it, another one will. Also, the first sale doctrine doesn't work. If I have a patent on a resistor, and I sell it to you and you put it in a computer, you're free to do that. You don't have that with software. I can't buy a piece of, say, Word, and use it in my own programs. For the same reason, it is very hard to figure out whether your program is off the hook. Any aspect of a program could be patented. Finally, software patents are bad (with so called "wish" claims). I have programs developed for my company. It takes me 5 seconds to come up with an idea, but it may take the programmer 5 days, or 5 weeks, to implement. If I go with a software patent to a programmer, no time is saved.

    The patent system is open source avant la lettre. An inventor has to provide all his knowledge (provide the best mode), in a way that can be replicated by an ordinary person skilled in the art, and it is available on line from patent offices. The "license" it comes with is a peculiar one (territorial limited/time limited), but it expires sooner than any copyright. But it is a rough tool. Fine for many types of inventions, including medical drugs, but not for software (or business methods).

    Bert

    • by Alinabi ( 464689 )

      Yes, software patents shouldn't be there. Patents are there to stop people from sitting on their ideas

      Patents in general should not be there. Leonardo da Vinci and Archimedes did not "sit on their ideas, and they did not have patents to protect them.

      • Patents in general should not be there. Leonardo da Vinci and Archimedes did not "sit on their ideas, and they did not have patents to protect them.

        Leonardo da Vinci - 1452-1519. Birthplace: Florence.

        Patents: 1421. Birthplace: Florence. [wikipedia.org]

        Patents in a modern sense: 1474. Birthplace: Venice.

        And if you're going to hang your hat on the Archimedes point, the Greeks had exclusivity rights to profits for anyone who discovered new refinements in luxury in 500 BC, 223 years before Archimedes was born.

    • by moon3 ( 1530265 ) on Sunday August 30, 2009 @04:19PM (#29254503)
      Fine for many types of inventions, including medical drugs
      It is NOT fine for software, but certainly it is NOT fine for medical drugs. Can anybody else enhance failing Tamiflu now when Roche holds all the key patents? Thousands might or have to die because Roche is blocking others from the drug developement, it might not be so, but certainly possible. Similar in software, I have to pay $600 for Adobe CS4 as nobody can't produce similar tools because Adobe have their 'patent portfolio' there.
      • Re: (Score:3, Informative)

        by FooAtWFU ( 699187 )

        The idea is that Roche developed Tamiflu, and 20 years from now anyone can make Tamiflu. At worst, society is losing a 20 society-disease-years over the matter (that's a fun unit, innit?). Afterward, society gets to benefit from a new flu drug (infinite society-disease-years, or something like that - and probably with a bigger unit of Society to boot).

        Consider the alternative, where there is no such patent available. Does Tamiflu, or an enhancement, get created at all in this scenario? Sure! Of course! .

        • Thats like saying that there are 5 AV vendors but you need all of them installed because they can't generate signatures that match the others, but don't worry, in 20 years they will give us access to all the signatures they are using now....

          Wow, thants handy

      • That's making some assumptions which aren't necessarily valid. The reason why one needs to have a patent in the current model is because one has to have patents to defend against other individuals who hold patents and pay off the cost of development.

        A system where a single entity paid for the cost of R&D and testing on the basis of results, rather than for the patent rights itself isn't necessarily going to have less innovation. It would just have to either be paid for by the federal government or by
    • Re: (Score:3, Informative)

      by Adrian Lopez ( 2615 )

      Exactly. Show me somebody who's implemented a software algorithm from its description in a patent document and I'll show you a pig that can carry a family of six aloft across the Atlantic.

    • Patents are there to stop people from sitting on their ideas. ... However, for software there is no need for this mechanism. There is no shortage of innovation because of lack of progress. If one person doesn't think of it, another one will.

      This is not in any way unique to software.

      Fine for many types of inventions, including medical drugs, but not for software (or business methods).

      My understanding is that the main argument in favor of medical patents is that the cost of FDA approval is so insanely high compared to the production cost once things are approved. Which is remarkably similar to software, where development is expensive but distribution costs a few cents per copy for bandwidth or a dollar or two for a CD in a cardboard box.

      • My understanding is that the main argument in favor of medical patents is that the cost of FDA approval is so insanely high compared to the production cost once things are approved.

        While the research and development to bring a drug to the market may be expensive, pharmaceutical businesses spend more on marketing and sales than on research [eurekalert.org].

        This is a sore spot for me, the National Cancer Institute [wikipedia.org] spent $183 Million to develop Taxol [wikipedia.org] yet Bristol-Myers Squibb (BMS) only paid $35 Million [essential.org] for exclusive rights to

  • by j. andrew rogers ( 774820 ) on Sunday August 30, 2009 @03:48PM (#29254305)

    This particular argument from the article is oft-repeated but weak:

      "Software developers already enjoy strong copyright protections for their work, rendering patent protection largely redundant."

    The exact same argument could be made for several classes of patent, such as chemical process patents, that people seem to generally consider legitimate patents in pretty much every country that has patents. If I am to believe that this is a compelling argument against software patents, then it is also a compelling argument against some other patentable areas. (Most arguments against software patents have this feature.)

    On the other hand, a much more compelling argument can be made against "business method" patents (a subset of the suitcase called "software" patents) because they do not strictly define a machine. The reason algorithm patents (also part of the "software" patent suitcase) have long been acceptable just about everywhere is that they are strict abstractions of novel circuits (patentable material in virtually every country). As a general observation, most proponents of software patents are thinking of algorithm patents while most opponents of software patents are thinking of business method patents. The ambiguity of the term "software patent" muddies the context and makes intelligent discussions more difficult. It would help if everyone was more precise in their selection of terms.

    • by jedidiah ( 1196 ) on Sunday August 30, 2009 @04:08PM (#29254413) Homepage

      What is the greater tragedy?

            Blizzard and Microsoft re-invent their gaming tech.

                  or

            Blizzard and MS are at the mercy of Electronic Arts because EA managed to patent something that each could re-create in isolation?

      Patents are meant to prevent wasteful re-invention or avoid the extreme case when re-invention is not likely.

      The problem with patents today is that patents are being granted for trivial and obvious things that could be easily re-invented by a few undergraduate students.

    • Re: (Score:3, Insightful)

      by Halo1 ( 136547 )

      The reason algorithm patents (also part of the "software" patent suitcase) have long been acceptable just about everywhere

      Well, no. The real software patents have only been acceptable in the US since State Street (Diamond vs. Diehr was about curing rubber, except that the rubber curing was software-controlled; i.e., the patent claimed a process for curing rubber, the fact that it was computer-controlled was just an aside and not central to the patentability). State Street was in 1998.

      Both in the US and in Europe, there is still a lot of controversy about software patents till today (this paper only confirms that). India didn't

      • The real software patents have only been acceptable in the US since State Street (Diamond vs. Diehr was about curing rubber, except that the rubber curing was software-controlled; i.e., the patent claimed a process for curing rubber, the fact that it was computer-controlled was just an aside and not central to the patentability). State Street was in 1998.

        State Street was a business method patent, not an algorithm patent. While both types of patents are often classified under the rubric of "software patent

        • by Halo1 ( 136547 )

          They are (correctly) viewed as strict abstractions of circuit designs, circuit designs being unambiguously patentable subject matter.

          And as I mentioned in previous post, so are pianos. You can also make a dedicated piano or hand-crancked organ that only plays that piece of music (a "dedicate circuit"). That does not make "this piece of music when played by an organ/piano" any more patentable though. At most, the specially constructed organ/piano could be patentable, but that does not confer any extra rights to the music, even when someone else plays it on another piano.

          Business method patents are not an abstraction of a circuit design

          They are when implemented using a computer algorithm. There is no inh

          • by j. andrew rogers ( 774820 ) on Sunday August 30, 2009 @06:26PM (#29255459)

            They are when implemented using a computer algorithm. There is no inherent difference between, e.g., a computer program that implements one-click shopping and a computer program that compresses data. You can also turn both into dedicated circuit designs, should you want to.

            This is incorrect. A compression algorithm has a strict definition for all use cases, a set of input bits mapped via specified transformations to a particular set of output bits. This is no different than a chemical process patent, which specifies the inputs and transformations to generate the output; it says nothing about the specific plant implementation or similar transformations that work on different inputs or generate identical outputs.

            What are the logical transforms and the input and output bit set pattern for one-click shopping? What is a universal boolean logic for selling pet food on the Internet? The very reason business method patents are being questioned is because no such specification exists or can exist for a useful implementation; any specification strict enough to be reducible to a machine would also be too narrow to have any value. In short, business method patents lack sufficiently strict specification to be directly mapped to a machine. That is a rather important difference.

            Business methods patents are considered bad because in order for them to be useful as patents (i.e. not trivially worked around), they also have to be vague enough that no strict machine specification is possible.

            • by Halo1 ( 136547 )

              They are when implemented using a computer algorithm. There is no inherent difference between, e.g., a computer program that implements one-click shopping and a computer program that compresses data. You can also turn both into dedicated circuit designs, should you want to.

              This is incorrect. A compression algorithm has a strict definition for all use cases, a set of input bits mapped via specified transformations to a particular set of output bits. This is no different than a chemical process patent, which specifies the inputs and transformations to generate the output; it says nothing about the specific plant implementation or similar transformations that work on different inputs or generate identical outputs.

              A compression algorithm is an abstract mathematical entity, limited only by mathematical truths. A chemical process is a physical process that operates under the limits of the physical world. Neither the nature of both things nor the economics and dynamics of both innovation environments are even remotely comparable.

              Again: playing a piece of music on a piano is also a particular input, a set of transformations (by the piano) and a certain output. This is not an argument to declare something patentable.

              Paten

    • by vadim_t ( 324782 ) on Sunday August 30, 2009 @04:16PM (#29254479) Homepage

      Well, I don't agree with patenting algorithms either.

      I think when you think of an algorithm, you have in mind something like an image recognizing algorithm that took years to perfect.

      But when I as a developer think of an algorithm I think of very basic building blocks, like binary search, quicksort, hashes, RLE compression, Hamming code. If any of those was patented progress would get slowed down for years.

      It can get even simpler than that. Something trivial like "if( there_is_data_to_print && there_is_paper && there_is_ink ) print_document()" is an algorithm.

      Allowing patents on this means giving somebody the ownership of a piece of math. That something could be illegal to calculate without paying somebody is completely insane IMO.

      As a developer I say: I don't want software patents in any shape or form. Not of the "business method" sort. Not of the "algorithm" sort. There should never be such a thing as a line of code that can't be written without paying somebody for a license. Period.

      • "Allowing patents on this means giving somebody the ownership of a piece of math."

        No, this is only true for a particular patentable algorithm in the same way it is true for *all* patentable subject matter. This is another argument that is not consistently applied (any math argument that applies to a computer algorithm trivially generalizes to all physical machines and material processes).

        To use your quicksort example, if someone patents the quicksort algorithm it does not prevent you from sorting data gene

        • Re: (Score:3, Insightful)

          by vadim_t ( 324782 )

          I don't have time for a proper reply right now, but I'll say this:

          I think that if patents ever worked, they have stopped doing what they were intended to do. So I'm skeptical about the usefulness of having patents at all.

          That said, I'm only an expert in my own field, and I'm completely certain that I don't want them there. And note that I'm somebody who could supposedly benefit from their existence.

          • "So I'm skeptical about the usefulness of having patents at all."

            I find the consistency of this opinion quite reasonable; I have no strong opinion for a specific outcome, but a logically consistent position would seem to be all or nothing (sans business method patents, which are a different kind of beast). My objections to most arguments is the lack of internal, logical consistency -- they look more like self-serving rationalizations and rent-seeking than reasoned policy.

            I've worked in a couple different a

            • I've worked in a couple different areas of patentable subject matter, and most of them are functionally indistinguishable from computer algorithm patents in terms of what happens. Business method patents are a whole 'nother kind of mess.

              What makes them different?

              • Business method patents are different from computer algorithm patents in that the latter always has a strict machine specification and the former does not. The only way to make business methods have a strict machine specification is to severely reduce the scope to the point where the patent would have no real value in the sense that everyone's business method would have a different specification and therefore be their own unique inventions. Can you define the "shopping" in "one-click shopping" in terms of

        • To use your quicksort example, if someone patents the quicksort algorithm it does not prevent you from sorting data generally.

          An actual patent on Quicksort would start with a claim covering sorting in general. Then it would move on to a claim which covered all comparison sorts, then all divide and conquer sorts, and only then would it be specific enough to be limited to Quicksort.

  • by Anonymous Coward on Sunday August 30, 2009 @04:04PM (#29254395)

    Anyone who's written a relatively small amount of software has very likely infringed on someones software patent. I happen to know for a fact I'm an infringer since I wrote software that did a simple zip-code distance lookup web program and years later found out someone actually managed to patent this. The application was taken down years ago because the organization I created it for ceased to exist and had extremely shallow pockets so there's no real danger of being sued over it. I don't recall how I found out about the patent, but it certainly wasn't from looking through granted patents.

    The point being it's not that difficult to infringe on someones software patent and have absolutely no idea you've done so. It wouldn't surprise me in the least if I learned I've personally written code that infringed on dozens of other software patents. I'd be extremely surprised if the libraries I use every day didn't infringe on at least one software patent.

    • by RobinH ( 124750 )

      The other problem is that (in the US anyway), if they can prove you knew about the patent then that's "willful infringement" and that incurs punitive damages, which is triple the regular amount. Most lawyers would advise developers to avoid learning about software patents just because of this fact.

  • Anti-patent whining (Score:4, Informative)

    by Animats ( 122034 ) on Sunday August 30, 2009 @04:08PM (#29254415) Homepage

    "Imagine the outcry if the courts were to legalize patents on English prose. Suddenly, you could get a "literary patent" on novels employing a particular kind of plot twist..."

    Copyright on literary concepts is strong enough to survive conversion from book to film, even when nothing remains of the original dialogue. It's strong enough to cover original sequels. Read Harry Potter and the Unauthorized Sequel. [marquette.edu] The concept of "scenes a faire" [wikipedia.org] covers the concept of literary "prior art" and prevents re-copyrighting the obvious. This is generally considered workable, although it took some litigation in the 1980s before the law settled down as regarding video game "look and feel".

    "Small businesses and nonprofit organizations far removed from the traditional software industry have IT departments producing potentially infringing software. The Brookings Institution's Ben Klemens has" documented [cato.org] that this is not a theoretical problem"

    Following the "documented" link leads to a set of PowerPoint slides by someone listed as "Senior Statistician, Mood and Affective Disorders, NIMH". (Where does the Cato Institute find these people?) He's grumbling about infringement lawsuits directed against the Green Bay Packers, Caterpillar, Kraft Foods, J. Crew, Linens and Things, McDonalds, Dole Food, and Oprah Winfrey. All occupy dominant positions in their industry. (Technically, the Green Bay Packers are a "small business", with only 189 employees, but the business is valued at $911 million.) [forbes.com] None is a nonprofit.

    • Re: (Score:2, Interesting)

      by Anonymous Coward

      Lots of small businesses get caught in the crossfire. AllMyData.com, a small company, along with several others, is being sued with BestBuy, over as general a thing as network backup ( http://dockets.justia.com/docket/court-txedce/case_no-2:2009cv00249/case_id-118157/ ). Small companies don't get sued directly as often since they aren't as lucrative targets, but they can still suffer when trolls go after the big guys.

  • Cato !Free Market (Score:2, Informative)

    by MSTCrow5429 ( 642744 )
    The Cato Institute is not free-market, nor is it libertarian. While it generally favors solutions closer to the free-market than absolute socialism, it is still solidly within the mainstream. It has never, to my knowledge, actually supported a free-market solution to anything, but rather socialism-lite, being governmental control over the economy with a velvet glove, as opposed to the iron fist of moderate or pure socialism.

    It is nice to see Cato catching up to the real supporters of the free-market, wh

    • By real supporters of the "free-market" do you mean the folks over at mises.org? I would say that the Cato institute lies within the realm of pragmatic Libertarianism. While they do not take an absolute stand with the An-Cap types over at mises.org they do present realistic free-market solutions within our current system.

    • Re: (Score:2, Informative)

      by Rising Ape ( 1620461 )

      Seriously? Every time I've seen something from the CATO institute it's always been the most zealous kind of free market fundamentalism. I can't see how you *can* get more economically right wing than that, nor do I want to.

  • ... a patentable media but a human right and duty to make use of to advance.

    See: Abstraction Physics [abstractionphysics.net]

    • by RobinH ( 124750 )

      That was... trippy... So I take it this is what you get when you take a computer programmer, gave him a hell of a lot of weed, some doritos, a wiki, and lock them in a room for a few days.

      Actually, the last line is funny: "Identification of the ten base action constants was done by Timothy Rue in February 1988, while having lunch at Pizza Hut." Wow.

  • Personally, I think it's fairly unlikely that we'll get any useful guidance from the Supreme Court in Bilski as applied to software patents. While some of the case law related to Bilski does apply to software patents, the Supreme Court will probably limit itself to the narrow questions of Bilski (i.e., business method claims that are fairly obviously directed to abstract concepts. Software patents are enough of a gray area, and enough of a matter of public policy rather than established case law, that the

  • ... who thought of the Green Hornet when reading the article headline
  • Software Patents are no more than Business Land Mines in the form of Monopolies. The whole idea of monopolizing an idea is ludicrous. The idea of choosing what's innovative and what's not is absurd. If necessity is the mother of all invention (and it usually is), then one man's "innovation" is another's necessity.

    Business-wise, they are nothing more than government granted monopolies, and hidden land mines. They are totally ludicrous from a social perspective because they hurt everyone.

    I lied.

    They don't

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