Wednesday, November 9, 2011

Google's five failed attempts to give confidential status to 'damning' email in Oracle case

Over the last three months, Google has tried five times -- and failed five times -- to claim attorney-client privilege or at least confidential status for the Lindholm email (named after its author, a Google employee). The latest one of those five attempts was cut short a week ago (on Wednesday, November 2) as Judge William Alsup entered an order denying confidential status for that document. The judge had originally scheduled yet another hearing on the Lindholm email for November 17 but decided that he had enough information about this matter to decide right away.

Google has now appealed this matter to the United States Court of Appeals for the Federal Circuit (CAFC), the federal appellate court for all patent cases. This comes as no surprise. During the district court proceedings, Google had stated repeatedly that it intended to appeal the court's determination on this important piece of evidence that pretty much every juror will interpret as an admission of an ongoing infringement of Oracle's Java-related intellectual property. So we still haven't reached the end of the Lindholm saga.

In my next blog post I will address Google's appeal to the CAFC and explain why the odds are long against it. In this post, I will publish and explain (not for the first time, actually) the significance of that email, and summarize all the procedural steps Google has taken so far in its tireless efforts to keep the Lindholm email away from jurors.

The full text of the Lindholm email

The evidence file in Oracle v. Google contains ten versions of the Lindholm email: the final one that was actually sent, and nine auto-saved drafts. This is the final one:

From: Tim Lindholm

Sent: Friday, August 06, 2010, 11:05 AM

To: Andy Rubin, Benjamin Lee

Cc: Dan Grove, Tim Lindholm

Subject: Context for discussion: what we're really trying to do.


Attorney Work Product
Google Confidential

Hi Andy,

This is a short pre-read for the call at 12:30. In Dan's earlier email we didn't give you a lot of context, looking for the visceral reaction that we got.

What we've actually been asked to do (by Larry and Sergei) is to investigate what technical alternatives exist to Java for Android and Chrome. We've been over a bunch of these, and think they all suck. We conclude that we need to negotiate a license for Java under the terms we need.

That said, Alan Eustace said that the threat of moving off Java hit Safra Katz hard. We think there is value in the negotiation to put forward our most credible alternative, the goal being to get better terms and price for Java.

It looks to us that Obj-C provides the most credible alternative in this context, which should not be confused with us thinking we should make the change. What we're looking for from you is the reasons why you hate this idea, whether you think it's a nonstarter for negotiation purposes, and whether you think there's anything we've missed in our understanding of the option.

-- Tim and Dan

The Lindholm email is even more important in light of an October 2005 email written by Andy Rubin

The Lindholm email was written and sent less than a week before Oracle filed its patent and copyright infringement lawsuit against Google. Shortly before going to court, Oracle had contacted Google, and the Lindholm email makes reference to those talks.

Any reasonable juror reading that email will infer from it that Google was conscious of an ongoing infringement, and will conclude that Google recklessly went ahead without taking a license. The Lindholm email is not the only document that suggests this. In my view, there's an older, no less important document in the case file -- an email from Andy Rubin from October 2005 that contains the following passage:

"If Sun doesn't want to work with us, we have two options: 1) Abandon our work and adopt MSFT CLR VM and C# language - or - 2) Do Java anyway and defend our decision, perhaps making enemies along the way"

In my view, which I already stated a while ago, it's the combined effect of those two emails -- Rubin 2005, Lindholm 2010 -- that will make a reasonable jury conclude that if there was an infringement, it was willful, and even reckless.

The Rubin email alone -- without Lindholm -- would have only one limitation: they could argue that it was written long before Android's launch, and that the technical approach Google had in mind in late 2005 was different from the one ultimately chosen. But that defense doesn't work in light of the Lindholm email, which shows that even five years later Google still recognized a need to take a Java license.

The same applies to Google's argument that its well-documented past negotiations with Sun related to a strategic partnership and joint development rather than a mere Java license. The Lindholm email also belies Google's story of a non-infringing "clean room" implementation.

Damning it is -- but Oracle still has to prove an actual infringement of valid intellectual property rights

Judge Alsup told Google at a hearing that it was "on the losing end" of the Lindholm email. Beyond the implications the email has for Oracle's claims of willful infringement and its strenuous pursuit of an injunction against Android, a jury that is aware of that email would also be much more inclined than otherwise to agree with Oracle that there is an infringement. Neither the Rubin email nor the Lindholm email are an explicit admission of the infringement of any particular Oracle patent, or of the validity of any patent claim. But those are highly technical questions, and even in the vicinity of Silicon Valley there won't be too many geeks on a jury. A jury with a mostly non-technical background will be less willing to declare a patent invalid or deny an infringement if there's a document that appears to remove all doubt about what the right general outcome would be.

However, the judge recently outlined a trial plan that suggests to me the Lindholm email and similar evidence will be presented only after a technical analysis of the validity and infringement of the asserted patents and copyrights. The judge might still change mind. He gave the parties an opportunity to comment on his plan. But it really seems he wants to postpone the whole "willfulness" question and everything related to it to the third trial.

The third phase of the trial -- the remedies phase -- wouldn't even happen if Oracle failed to prove an infringement of valid intellectual property rights at the first (copyrights) and/or second (patents) trial. Given that Oracle asserts six (of originally seven) patents and a number of copyrights, it would be very, very surprising if none of those rights was deemed valid and infringed. But Google will fight very hard against Oracle's infringement contentions, and like I said, this will get very technical. Bear in mind that any reference in this case to remedies (injunction, damages) always presupposes that Oracle will prevail in the first and/or second trial phase.

If Oracle does prove some infringement, the Lindholm email will come up in the third trial phase. For the reasons I explained in the previous section, it would then be pretty easy for Oracle to convince a jury of two things:

  1. Google infringed willfully. It knew that it needed a license but published an infringing product. I explained before that this appears to be proven by at least the combination of Lindholm's and Rubin's emails. There may be other evidence. At a July 21 hearing, an Oracle lawyer talked about a document in which a license is described as "critical", but he wasn't able to show it on the judge's request and it's not know publicly whether such an additional document is also in the public record. The judge insisted that it doesn't count until he sees it in the record, and the judge attaches importance to it only if the words "license" and "critical" come up in a crystsl clear connection.

    If the jury determines that any infringement identified by then was willful, one effect is that past damages will be tripled, but even more importantly, it would make an injunction against Android more likely.

    Judge Alsup told Google's lawyer the following at the aforementioned hearing:

    "They --you know what they used to say about Joe Alioto? He needed -- you know, in a big case like this, he would come in, he only needed two documents: He needed a document like this, the one I just read, and the Magna Carta, and he won every case."

    Joe Alioto was a legendary trial lawyer (and mayor of San Francisco from 1968 to 1976).

    Judge Alsup continued:

    "And you are going to be on the losing end of this document, and with Andy Rubin on the stand. You think about that. And I want to say this: If willful infringement is found, there are profound implications for a permanent injunction. So you better think about that, and your client ought to think about that. I'm not saying there was willful, but that is a serious factor when you are talking about an injunction. If somebody has willfully infringed, they had better be thinking about an injunction."

    Just to be clear: there's nothing in U.S. patent law that says willful infringement automatically triggers an injunction. That's not what the judge said. But on average, an inadvertent infringer is much more likely to get away without an injunction than one that violated someone else's patents knowingly and willingly.

  2. Google didn't seem to believe it had good non-infringing alternatives ("they all suck" is what the Lindholm email says).

    This affects the possible damages award because it makes Oracle's intellectual property more valuable, and suggests that the right holder could have commanded a fairly high price in negotiations. This here relates to the damages award prior to a possible tripling.

    Futhermore, the lack of a viable alternative makes willful infringement even more plausible. But that's just a side effect.

How the Lindholm email entered the public record in the first place

I suspect that the final Lindholm email was not disclosed by Google in the discovery process since it contained words indicating privilege, so any filtering tool used by Google's lawyers would have identified it as a critical one. But there were nine auto-saved drafts, and the attorney-client privilege part was added only at the very end. Earlier drafts without it apparently entered the evidence file.

The first time that Oracle brought up the Lindholm email was a July 21 hearing. That hearing was mostly about Google's motion to throw out Oracle's original damages report (a motion that was ultimately successful), but 9 days before that hearing, Judge Alsup also raised the additional question of willful infringement in an order I uploaded to Scribd back in July. Google's own Daubert motion (to dismiss Oracle's damages report) contained a passage that indicated to the judge a certain likelihood of willful infringement. He said that he wanted to discuss this with (the parties') "counsel" at the hearing.

Oracle's lawyers brought a binder of documents to the July 21 hearing, knowing that the hearing was going to take place under time constraints (an Oracle lawyer said: "I actually, especially in view of the limited time, we have a binder for the Court I would like to hand up") and claiming that they didn't want to discuss sensitive material in open court (in front of the public and, especially, the media):

"[..] the evidence will show clearly and convincingly that before the infringement began Google said --and we have documents on this --Slides 67 through 70 in the binder. I don't want to discuss those documents at great length when the public's here [...]

Judge Alsup is all for transparency. The lawyer's suggestion that he wasn't going to talk about something in the binder riled him:

"You said it -- listen, there is no restriction. This is a public proceeding. And you lawyers and the companies are not going to handcuff the public from knowing what goes on in its Federal District Court. This is not a wholly-owned subsidiary of Oracle Corporation. So I'm going to have a public order. No one is going to put my order under seal, even if I refer to your secret documents. So you can say anything you want."

For Oracle's lawyer, that was just the go-ahead he was probably hoping to get. He told the judge that he agreed with him, and Judge Alsup then added the following:

"Fine, you say whatever you want. If Google has a memo in their file saying, we are about to willfully infringe, there is no way I'm going to keep that secret from the public or the investing public. [and a little later:] You big companies do not own the U.S. District Court. So, yes, you can have your protective orders, but when it comes to a public hearing, I'm not going to have to resort to Morse Code to understand what you are trying to tell me."

Those quotes show Judge Alsup's approach: a federal patent infringement lawsuit is public, and if something needs to be discussed at a public hearing in order to determine who's right and who's wrong, confidentiality must not stand in the way of finding out the truth.

On that basis, Steven Holtzman, a Boies, Schiller & Flexner lawyer representing Oracle at the hearing, pointed out page 74 of his binder, and had the following exchange with the judge:

ORACLE'S LAWYER: It's a later document, Mr. Lindholm, at Google, and he states in the document: "What we've actually been asked to do by Larry and Sergey" -- those are the cofounders of Google -- "is to investigate what technical alternatives exist to Java for Android and Chrome. We have been over a bunch of these and think they all suck. We conclude that we need to negotiate a license for Java"

JUDGE ALSUP: That's a pretty good document for you.

ORACLE's LAWYER: Yes.

JUDGE ALSUP: That ought to be, you know, big for you at the trial.

MR. HOLTZMAN: Yep. So these are the kinds of evidence we focus on I think will show clearly and convincingly they knew they needed a license and acted despite that fact.

That history shows that it's difficult for Google to prove that Oracle violated a protective order by disclosing confidential business information. Oracle's lawyers prepared a binder, and they were planning to just show the relevant passages to the judge rather than read them in open court. But the judge didn't allow this. He wanted Oracle's lawyer to speak out, and he gladly did -- but only after the judge had urged him to do so, in words that I think were quite harsh, such as reminding him of the fact that the court (unlike dozens of companies inr ecent years) hasn't been acquired by Oracle.

After learning about the Lindholm email from Oracle, the judge later asked Google's counsel, Robert van Nest of Keker & van Nest, to comment. He said the thing about Google being on the losing end of the document, with Android chief Andy Rubin on the witness stand, which I had quoted further above. In that conversation, the judge also asked why Google was looking for an alternative to Java if there wasn't a need for a license. And this is what Google's lawyer replied:

"Because if Oracle comes in and says, okay, you are going to have to spend all this money on a lawsuit, and we are going to seek billions of dollars, the question from the CEO is, is there any other way we can do this and avoid it, altogether?"

The right thing for the lawyer to do would have been to raise an objection against the presentation of a document that he thought was privileged. But the most counterproductive thing he possibly could do is exactly what he did: he described it as business correspondence, which completely runs counter to any claims of this being a document deserving attorney-client privilege.

But Google's lawyers had second thoughts. A little while after the hearing, and after a variety of media had published the most important part of that email, they wanted to remove the Lindholm email from the public record -- including the relevant parts of the hearing transcript. The ensuing process is the subject of the final section of this post.

The first five attempts to have the Lindholm email declared privileged -- or at least confidential

Here's the chronology of Google's banging its head against the wall of the district court:

Attempt #1: Motion for leave to redact record

On July 28, 2011, a week after the hearing, Google's counsel filed a motion for "leave to file two short motions requesting that the Court redact portions of the record for the Daubert motion the Court heard and ruled upon last week. [...] These motions and the requested orders are necessary because these passages reflect Oracle's improper use of a document that Google subsequently determined was an inadverently-produced privileged document, subject to the attorney-client privilege."

The letter continues:

"This situation would not have arisen but for Oracle's violation of the protective order in this matter. The inadvertently-produced document was marked 'HIGHLY CONFIDENTIAL -- ATTORNEY'S EYES ONLY' and paragraph 5.2(b) of the protective order specifically states that "[p]arties shall give the other parties notice if they reasonably expect a deposition, hearing or other proceeding to include Protected Material[.]"

Google then claims that Oracle provided no such notice. But Oracle didn't mean to quote from the content of the binder until the judge urged it to do so. That's why Oracle would deny that it "resaonably expect[ed]" the email to be disclosed.

In that July 28 letter, Google's lawyers explained that "given the volume and speed of production [of documents] in this case, Google has been forced to rely on electronic screening mechanisms, which in part use sender and addressee information, as well as privilege-related keywords, to identify potentially privileged documents". For the final email that apparently worked, which is why it was listed on Google's privilege log (which I presume contained little more than a headline), that screening apparently worked, but not for the auto-saved drafts.

Actually, the simplest explanation for why those auto-saved drafts didn't contain any "privilege-related keywords" is that the whole privilege designation was merely an afterthought. The autosaved drafts didn't claim privilege or address lawyers. Only the final email did.

While this isn't conclusive evidence on its own that the email was never truly meant to be attorney-client correspondence, it certainly fits into the overall picture. If one looks at the content (a recommendation to negotiate a license, which is a business decision) and also the salutation ("Hi Andy", addressing only Andy Rubin), the combination of all of that really doesn't make this look like attorney-client communication.

Add to that the way Google's consel reacted. He tried to explain away its relevance to the question of whether a license was needed (to avoid infringement) by saying that this was related to an analysis performed at the CEO's request. (By the way, at the time of that email, the CEO was Eric Schmidt, not Larry Page.)

If the content had been that of attorney-client communication, Mr. van Nest's immediate reaction would likely have been to claim privilege. Nor did other lawyers who presumably saw those auto-saved drafts. Oracle mentioned in its reply (on July 29) that the auto-saved drafts were all marked as "Highly Confidential -- Attorneys' Eyes Only", a "designation [that] msut reflect a good faith belief that the document contains sensitive information", which "shows pre-disclosure review of each such version -- not inadvertent disclosure".

In other words, there were lawyers who looked at those documents. They did consider the information sensitive. That's why they marked them as highly confidential. But even they didn't get the impression that this was attorney-client correspondence and deserved privilege.

In that response, Oracle also mentioned that the July 21 hearing in Judge Alsup's court wasn't the first one on that day at which the Lindholm email came up. It previously came up at a discovery hearing (held by Magistrate Judge Donna Ryu). So when Google's counsel reacted to it at the second hearing, he was, according to Oracle, "already familiar with the document" and "made no claim of privilege". Oracle notes that Google started its whole effort to remove the Lindholm document only after it "was told [by Judge Alsup] in no uncertain terms that [this email] could be a serious blow to its case".

Still on July 29, Google's lawyers wrote a brief (just one page) reply, pointing out that the discovery hearing "was telephonic, so Google did not see a copy of the document to which Oracle had referred", and claimed that "when Google requested the document production numbers for the document Oracle referenced during the [discovery] hearing, Oracle was unable or unwilling to provide them to Google".

On August 1, 2011, Judge Alsup denied Google the requested permission to file its motions for failure to show good cause. The part of his reasoning that I didn't consider entirely convincing was that he said those drafts were never sent to anyone and therefore don't qualify as "communication", let alone attorney-client communication. I think it's tough to judge those drafts all by themselves. Even though I think it's reasonable to deny the document privilege in its final form, I'm not a big fan of the idea that those auto-saved drafts would be viewed without taking the final thing into account. But the second pillar of the judge's reasoning makes a lot of sense:

"Second, simply labeling a document as attorney work product or sending it to a lawyer (measures which, in any event, were not taken with respect to the document in question) does not automatically trigger privilege. Google has provided no indication that the disputed document is in fact subject to the claimed attorney-client privilege."

Concerning the second sentence, it's true that Google didn't provide any such indications at that stage. That leads us to the second try.

Attempt #2: Factual proffer regarding privilege

On August 3, two days after the order, Google's lawyer tried again. He wrote to the court with particular reference to the sentence containing the passage "provided no indication", "apologize[d] in advance for not furnishing this information in the first place", and requested "leave to submit in camera" a "factual proffer" described in the document, relating to why Google claims the document does represent attorney-client correspondence, such as a theory as to why Lindholm wrote his email "at the behest of and in coordination with Google's lawyers".

Later that same day, Oracle wrote to the court "oppos[ing] Google's request that the Court revisit its holdings in its August 1, 2011 Order [...] and permit Google to submit additional documents".

Oracle's letter summed up the reasons for which the judge believed that Google's proposed motions were going to be futile.

Oracle furthermore objected to Google's presentation of evidence in camera "where Oracle cannot contest them" and said that no matter what Google might want to present "cannot overcome the plain language of the document".

Oracle also held against Google the fact that its counsel did not claim privilege when the document came up at the two July 21 hearings, and said that this constitutes a waiver (if that document ever had been privileged before).

That letter also mentioned that Oracle had "twice asked Google to re-produce the Lindholm document" (which Google clawed back from the evidence file) but that "Google has refused, despite [Judge Alsup's] order and despite the fact that Magistrate Judge Ryu has ordered that Mr. Lindholm be deposed on the issue of Google's willful infringement". Therefore, Oracle asked the court for "an order compelling Google to produce the Lindholm document forthwith".

The judge denied both parties' proposals. He told Google that its factual proffer would be untimely if interpreted as support for Google's July 28 letter, and unable to "establish any of the ground for reconsideration" of the August 1 order. He also told Oracle that it failed to explain why it has "twice asked Google to re-produce the Lindholm document", given that it had been produced (in the sense of "presented") before. That might have meant to say that Oracle could quote from the document anyway. The judge furthermore noted that discovery disputes would have to be brought before Magistrate Judge Ryu.

Attempt #3: refusal to re-produce

On August 5, 2011, Oracle and Google wrote a joint letter to the court, but it was a joint letter only in the sense that the technically submitted it together. Their positions were, not surprisingly, worlds apart. Oracle brought a discovery motion to compel Google to re-produce twelve different versions of the Lindholm email (according to Oracle, those twelve versions included ten drafts and two copies of the one finally sent), and Google opposed this request.

I reported on that joint letter the following day.

Oracle made arguments consistent with the ones I outlined in the previous sections. One of them was that "Google's inconsistent positions about why the document is supposedly privileged demonstrate the bankruptcy of its argument". Interestingly, the final version of the Lindholm email (which was indeed marked as privileged) was described in the privilege log as correspondence "seeking advice of counsel". That was just preposterous. I published the text of the email further above. There's nothing in it that amounts to asking a lawyer to answer a legal question. Google apparently realized this and later marked the document as one that "reflects" legal advice, "seeks" legal advice, or "was prepared at the direction" of a lawyer. Theoretically, it's possible that one email does all of that at the same time. But looking at the content of the Lindholm email, it's hard to see how it even one of those claims can possibly be true.

Google argued that this document does deserve privilege, that Judge Alsup had not ruled out that it deserves privilege (an interpretation that was kind of a stretch, but they argued for it very eloquently), and kept coming back to its claims of an "inexcusable violation by Oracle of the agreement that the parties put in place to avoid such waivers". Google also explained how auto-saved drafts generally come into being. Like I said before, Judge Alsup's denial of Google's request for permission to file a motion showed was in part based on his dismissal of the need to interpret those drafts in light of the final document.

On August 9, Magistrate Judge Ryu ordered the parties to provide "factual, and not legal, information that each party believes relevant to the alleged privileged status of the Lindholm documents" by August 15, and subsequently, by August 19, "sworn declarations responding factually -- not legally -- to the opposing party’s August 15 submission."

On August 16, after receiving the factual declarations, Magistrate Judge Ryu scheduled a hearing on this discovery dispute for August 25. Still on August 16, Google claimed that Oracle's declaration was not just factual but made legal arguments. Oracle replied the next day (August 17), saying (among other things) that "damning facts are still facts", and referring to the publication of the key passages of the Lindholm email by various media, including this blog, which was one of four examples Oracle cited.

On August 19, the parties filed their reply declarations.

On August 25, Magistrate Judge Ryu held the related hearing and ordered Google to produce various versions of the Lindholm email immediately to Oracle. She also acknowledged that Google's counsel had said at the hearing that this decision would be appealed to Judge Alsup, but told Google that it had to comply with the order anyway and was "mistaken" in its assumption that it wouldn't have to do so right away.

Attempt #4: motion for relief from Magistrate Judge Ryu's order

On September 8, 2011, Google's lawyers file a motion that basically appealed Magistrate Judge Ryu's decision to Judge Alsup. That motion was denied the next day because it wasn't authorized: Google didn't ask for leave (permission) to file. But Judge Alsup didn't want to hold this against Google. He said they could request leave, and for any timeliness assessment, the date on which it filed its original motion would be the relevant date. I wouldn't count that unauthorized motion as a failed attempt -- let's face it, there's no scarcity of failed attempts without it. Google's lawyer apologized and justified his filing of an unauthorized motion with a need to preserve the record for a possible appeal.

On September 12, 2011, Google then filed its motion for leave by submitting what is called a précis letter. That motion for leave was granted on September 16, 2011 -- less than a week before court-ordered mediation (settlement) talks began.

In its September 19 motion, Google made the kinds of arguments that were known and expected. It tried to fine-tune and strengthen its argument, but at this point it already faced a high hurdle: Judge Alsup wasn't going to overrule Magistrate Judge Ryu unless Google could prove that she made a mistake.

On September 26, 2011, Oracle filed its opposition brief. Its arguments were also quite familiar, just that it was all about supporting Magistrate Judge Ryu, arguing that she "correctly found [some fact]", "correctly applied [a rule]", "properly relied on [something]", "correctly held [something]", etc.

On September 29, 2011, Google filed its reply brief, still trying to argue that Magistrate Judge Ryu had erred.

A hearing took place on October 13, 2011.

October 20, 2011, Judge Alsup denied Google's order. He ruled that "[t]he Lindholm email and drafts will not be treated as protected by attorney-client privilege or work-product immunity". This time around, Judge Alsup "considered the full text of the Lindholm email quoted [in the order] and all related declaration testimony" but found that "the Lindholm email does not contain any truly sealable
material".

This was the end for Google's first-instance attempts to have the document declared privileged, but still not the end of the Lindholm saga.

Attempt #5: motion to have the document declared confidential

On October 11, 2011, more than week before Judge Alsup ruled on Google's fourth attempt, Google already took a fifth initiative with the less ambitious goal of having the document declared confidential. After the October 20 order, Oracle argued that this was pointless since the judge had said that the document did not contain any sealable material, but Google kept insisting on its need to preserve its record for an appeal.

On November 2, 2011, Judge Alsup denied Google's motion. He didn't even want to hold another hearing (which had originally been scheduled for November 17) as there had obviously been enough debate over this matter in order for him to be able to deide.

He ruled that "{t]he Lindholm email and drafts shall be treated as neither privileged nor confidential in this action" and ordered Google to provide Oracle with "new copies of those documents without the 'Privileged & Confidential' footer that was added for production".

In his legal analysis, the judge said the following:

The content of the Lindholm email and drafts became part of the public record on October 20, when the final version of the email was quoted in its entirety and the drafts were described in a public order issued by the undersigned judge. The issuance of that order did not violate the protective order. Accordingly, the Lindholm email and drafts are not subject to the protections conferred by the protective order.

By determining that October 20 was the date when this entered the public record, the judge simply mooted the whole question of whether Oracle maliciously presented confidential information to the public at the July 21 hearing.

The judge can issue orders that quote from documents and thereby disclose them. He can only do so if he doesn't abuse his related discretion, but he's apparently quite confident that there are just too strong indications that the Lindholm email was business correspondence rather than attorney-client communication or an "attorney work product".

Attempt #6 has meanwhile started. It's Google's interlocutory appeal to the Court of Appeals for the Federal Circuit (CAFC). But as far as the district court is concerned, Google has exhausted all of its options with respect to the Lindholm email.

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