IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION VIDEO STREAMING SOLUTIONS, LLC, Case

No. 1:13-CV-07031 Plaintiff, v. MICROSOFT CORPORATION, Defendant. PATENT CASE JURY TRIAL DEMANDED

COMPLAINT Video Streaming Solutions, LLC (“Video Streaming”) files this Complaint against Microsoft Corporation (“Microsoft” or “Defendant”) for infringement of U.S. Patent No. 6,629,318 (“the ’318 patent”), U.S. Patent No. 6,870,886 (“the ‘886 patent”), U.S. Patent No. 6,806,909 (“the ‘909 patent”), and U.S. Patent No. 6,175,595 (“the ‘595 patent”). THE PARTIES 1. Video Streaming is a limited liability company organized and existing under the

laws of the State of Texas, with its principal place of business located in Plano, Texas. 2. Microsoft is a Washington corporation with its principal place of business located

at 1 Microsoft Way, Redmond, WA 98052-6399. JURISDICTION AND VENUE 3. 4. This is an action for patent infringement under Title 35 of the United States Code. Jurisdiction is proper in this Court pursuant to 28 U.S.C. §§ 1331 (Federal

Question) and 1338(a) (Patents) because this is a civil action for patent infringement arising under the United States’ patent statutes, 35 U.S.C. § 101 et seq.

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5.

Venue is proper under 28 U.S.C. §§ 1391(c) and 1400(b) because Microsoft has

committed acts of infringement in this district and/or is deemed to reside in this district. 6. This Court has personal jurisdiction over Microsoft and venue is proper in this

district because Microsoft has committed, and continues to commit, acts of infringement in the State of Illinois, including in this district and has engaged in continuous and systematic activities in the State of Illinois, including in this district. For example, Microsoft regularly conducts business in this district as shown by its regional office located at 200 East Randolph Drive, Suite 200, Chicago, IL 60601. Therefore, Microsoft has engaged in continuous and systematic activities in this district and has purposefully availed itself of the privileges of conducting business in this district. COUNT I (INFRINGEMENT OF U.S. PATENT NO. 6,629,318) 7. 8. Video Streaming incorporates paragraphs 1 through 6 herein by reference. This cause of action arises under the patent laws of the United States, and in

particular, 35 U.S.C. §§ 271, et seq. 9. Video Streaming is the exclusive licensee of the ’318 patent, entitled “Decoder

Buffer for Streaming Video Receiver and Method of Operation,” with ownership of all substantial rights in the ’318 patent, including the right exclude others and to enforce, sue and recover damages for past and future infringement. A true and correct copy of the ’318 patent is attached as Exhibit A. 10. The ‘318 patent is valid, enforceable and was duly issued in full compliance with

Title 35 of the United States Code.

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(Direct Infringement) 11. Microsoft has and continues to directly infringe one or more claims of the ‘318

patent in this judicial district and/or elsewhere in Illinois and the United States, including at least claim 15, without the consent or authorization of Video Streaming, by or through its making, having made, offer for sale, sale, and/or use of the patented systems and methods for buffering streaming video. Microsoft is thereby liable for infringement of the ‘318 patent pursuant to 35 U.S.C. § 271. 12. More particularly, Microsoft has and continues to infringe at least claim 15 by,

among other things, making, using, offering for sale, selling, and/or importing the Microsoft MediaRoom product by itself or in conjunction with an IPTV set-top box or other vehicle for streaming media (“’318 Accused Products”). Defendants are liable for these direct

infringements of the ‘318 patent pursuant to 35 U.S.C. § 271. 13. Based on the information presently available to Video Streaming, absent

discovery, Video Streaming contends that Microsoft has and continues to directly infringe one or more claims of the ‘318 patent, including at least claim 15, by practicing the method in conjunction with other third parties who work synergistically with Microsoft to buffer the streaming video, such as internet service providers, IPTV service providers, set-top box manufacturers, and/or web server hosts (hereinafter “Participating Entities”). Microsoft in conjunction with the Participating Entities have, at minimum, directly infringed the ‘318 patent pursuant to 35 U.S.C § 271. 14. To the extent any of the asserted claims, such as claim 15, are construed to require

action that is performed by a Participating Entity, such actions are attributable to Microsoft in

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accord with the principles of joint infringement in that Microsoft retains direction and/or control over the actions of the Participating Entities. 15. On information and belief, Microsoft exerts direction or control over the

Participating Entities, at a minimum, through contractual obligations to provide services that include the performance of actions falling within at least one element of at least one of the asserted claims, such as claim 15. 16. In accordance with Fed. R. Civ. P. 11(b)(3), Video Streaming will likely have

additional evidentiary support after a reasonable opportunity for discovery on this issue. 17. Video Streaming has been damaged as a result of Microsoft’s infringing conduct

described herein. Microsoft is, thus, liable to Video Streaming in an amount that adequately compensates Video Streaming for Microsoft’s infringements, which, by law, cannot be less than a reasonable royalty, together with interest and costs as fixed by the Court under 35 U.S.C. § 284. (Indirect Infringement – Inducement) 18. Based on the information presently available to Video Streaming, absent

discovery, and in the alternative to direct infringement, Video Streaming contends that Microsoft has and continues to indirectly infringe one or more claims of the ‘318 patent, including at least claim 15 by inducing others (e.g., internet service providers, IPTV service providers, set-top box manufacturers, and/or web server hosts) to practice methods in violation of one or more claims of the ’318 patent. 19. Microsoft has been on notice of the ‘318 patent since at least since receipt of

service of this Complaint.

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20.

Since Microsoft has been on notice of the ’318 patent, Microsoft has knowingly

induced infringement of the ‘318 patent, including at least claim 15 of the ‘318 patent, and possessed specific intent to encourage others’ infringement. 21. Since Microsoft has been on notice of the ‘318 patent, Microsoft knew or should

have known that its actions would induce actual infringement of the ‘318 patent, including at least claim 15 of the ‘318 patent. 22. Microsoft provides support and encourages others (internet service providers,

IPTV service providers, set-top box manufacturers, and/or web server hosts) to practice the methods and infringe at least claim 15 of the ‘318 patent. On information and belief, Microsoft, at a minimum, provides support and encourages others through contractual obligations to provide services that include the performance of the patented methods. In accordance with Fed. R. Civ. P. 11(b)(3), Video Streaming will likely have additional evidentiary support after a reasonable opportunity for further investigation or discovery on this issue. 23. Microsoft has not produced any evidence as to any investigation, design around or

that any remedial action was taken with respect to the ‘318 patent. In accordance with Fed .R. Civ. P. 11(b)(3), Video Streaming will likely have additional evidentiary support after a reasonable opportunity for discovery on this issue. 24. Video Streaming has been damaged as a result of Microsoft’s infringing conduct

described in this Count. Microsoft is, thus, liable to Video Streaming in an amount that adequately compensates it for Microsoft’s infringement, which by law, cannot be less than a reasonable royalty, together with interest and costs as fixed by this Court under 35 U.S.C. § 284.

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COUNT II (INFRINGEMENT OF U.S. PATENT NO. 6,870,886) 25. 26. Video Streaming incorporates paragraphs 1 through 24 herein by reference. This cause of action arises under the patent laws of the United States, and in

particular, 35 U.S.C. §§ 271, et seq. 27. Video Streaming is the exclusive licensee of the ’886 patent, entitled “Method

and Apparatus for Transcoding a Digitally Compressed High Definition Television Bitstream to a Standard Definition Television Bitstream,” with ownership of all substantial rights in the ’886 patent, including the right exclude others and to enforce, sue and recover damages for past and future infringement. A true and correct copy of the ’886 patent is attached as Exhibit B. 28. The ‘886 patent is valid, enforceable and was duly issued in full compliance with

Title 35 of the United States Code. (Direct Infringement) 29. Microsoft has and continues to directly infringe one or more claims of the ‘886

patent in this judicial district and/or elsewhere in Illinois and the United States, including at least claim 1, without the consent or authorization of Video Streaming, by or through its making, having made, offer for sale, sale, and/or use of the patented systems and methods for transcoding data bitstreams. Microsoft is thereby liable for infringement of the ‘886 patent pursuant to 35 U.S.C. § 271. 30. More particularly, Microsoft has and continues to infringe at least claim 1 by,

among other things, making, using, offering for sale, selling, and/or importing the Microsoft MediaRoom product by itself or in conjunction with an IPTV set-top box or video encoder

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capable of transcoding operations (“’886 Accused Products”). Defendants are liable for these direct infringements of the ‘886 patent pursuant to 35 U.S.C. § 271. 31. Based on the information presently available to Video Streaming, absent

discovery, Video Streaming contends that Microsoft has and continues to directly infringe one or more claims of the ‘886 patent, including at least claim 1, by practicing the method in conjunction with other third parties who work synergistically with Microsoft to transcode the data bitstreams, such as set-top box manufacturers, and/or manufacturers of video encoders cable of performing transcoding operations (hereinafter “Participating Entities”). Microsoft in conjunction with the Participating Entities have, at minimum, directly infringed the ‘886 patent pursuant to 35 U.S.C § 271. 32. To the extent any of the asserted claims, such as claim 1, are construed to require

action that is performed by a Participating Entity, such actions are attributable to Microsoft in accord with the principles of joint infringement in that Microsoft retains direction and/or control over the actions of the Participating Entities. 33. On information and belief, Microsoft exerts direction or control over the

Participating Entities, at a minimum, through contractual obligations to provide services that include the performance of actions falling within at least one element of at least one of the asserted claims, such as claim 1. 34. In accordance with Fed. R. Civ. P. 11(b)(3), Video Streaming will likely have

additional evidentiary support after a reasonable opportunity for discovery on this issue. 35. Video Streaming has been damaged as a result of Microsoft’s infringing conduct

described herein. Microsoft is, thus, liable to Video Streaming in an amount that adequately compensates Video Streaming for Microsoft’s infringements, which, by law, cannot be less than 7

a reasonable royalty, together with interest and costs as fixed by the Court under 35 U.S.C. § 284. (Indirect Infringement – Inducement) 36. Based on the information presently available to Video Streaming, absent

discovery, and in the alternative to direct infringement, Video Streaming contends that Microsoft has and continues to indirectly infringe one or more claims of the ‘886 patent, including at least claim 1 by inducing others (e.g., set-top box manufacturers and/or manufacturers of video encoders cable of performing transcoding operations) to practice methods in violation of one or more claims of the ’886 patent. 37. Microsoft has been on notice of the ‘886 patent since at least since receipt of

service of this Complaint. 38. Since Microsoft has been on notice of the ’886 patent, Microsoft has knowingly

induced infringement of the ‘886 patent, including at least claim 1 of the ‘886 patent, and possessed specific intent to encourage others’ infringement. 39. Since Microsoft has been on notice of the ‘886 patent, Microsoft knew or should

have known that its actions would induce actual infringement of the ‘886 patent, including at least claim 1 of the ‘886 patent. 40. Microsoft provides support and encourages others (set-top box manufacturers

and/or manufacturers of video encoders cable of performing transcoding operations) to practice the methods and infringe at least claim 1 of the ‘886 patent. On information and belief, Microsoft, at a minimum, provides support and encourages others through contractual obligations to provide services that include the performance of the patented methods. In accordance with Fed. R. Civ. P. 11(b)(3), Video Streaming will likely have additional 8

evidentiary support after a reasonable opportunity for further investigation or discovery on this issue. 41. Microsoft has not produced any evidence as to any investigation, design around or

that any remedial action was taken with respect to the ‘886 patent. In accordance with Fed .R. Civ. P. 11(b)(3), Video Streaming will likely have additional evidentiary support after a reasonable opportunity for discovery on this issue. 42. Video Streaming has been damaged as a result of Microsoft’s infringing conduct

described in this Count. Microsoft is, thus, liable to Video Streaming in an amount that adequately compensates it for Microsoft’s infringement, which by law, cannot be less than a reasonable royalty, together with interest and costs as fixed by this Court under 35 U.S.C. § 284. COUNT III (INFRINGEMENT OF U.S. PATENT NO. 6,806,909) 43. 44. Video Streaming incorporates paragraphs 1 through 42 herein by reference. This cause of action arises under the patent laws of the United States, and in

particular, 35 U.S.C. §§ 271, et seq. 45. Video Streaming is the exclusive licensee of the ’909 patent, entitled “Seamless

Splicing of MPEG-2 Multimedia Data Streams,” with ownership of all substantial rights in the ’909 patent, including the right exclude others and to enforce, sue and recover damages for past and future infringement. A true and correct copy of the ’909 patent is attached as Exhibit C. 46. The ‘909 patent is valid, enforceable and was duly issued in full compliance with

Title 35 of the United States Code.

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(Direct Infringement) 47. Microsoft has and continues to directly infringe one or more claims of the ‘909

patent in this judicial district and/or elsewhere in Illinois and the United States, including at least claim 1, without the consent or authorization of Video Streaming, by or through its making, having made, offer for sale, sale, and/or use of the patented systems and methods for splicing multimedia programs in multimedia data streams. Microsoft is thereby liable for infringement of the ‘909 patent pursuant to 35 U.S.C. § 271. 48. More particularly, Microsoft has and continues to infringe at least claim 1 by,

among other things, making, using, offering for sale, selling, and/or importing the Microsoft MediaRoom product by itself or in conjunction with an IPTV set-top box or other vehicle for streaming media (“’909 Accused Products”). Defendants are liable for these direct

infringements of the ‘909 patent pursuant to 35 U.S.C. § 271. 49. Based on the information presently available to Video Streaming, absent

discovery, Video Streaming contends that Microsoft has and continues to directly infringe one or more claims of the ‘909 patent, including at least claim 1, by practicing the method in conjunction with other third parties who work synergistically with Microsoft to splice the multimedia data streams, such as internet service providers, IPTV service providers, set-top box manufacturers, and/or web server hosts (hereinafter “Participating Entities”). Microsoft in conjunction with the Participating Entities have, at minimum, directly infringed the ‘909 patent pursuant to 35 U.S.C § 271. 50. To the extent any of the asserted claims, such as claim 1, are construed to require

action that is performed by a Participating Entity, such actions are attributable to Microsoft in

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accord with the principles of joint infringement in that Microsoft retains direction and/or control over the actions of the Participating Entities. 51. On information and belief, Microsoft exerts direction or control over the

Participating Entities, at a minimum, through contractual obligations to provide services that include the performance of actions falling within at least one element of at least one of the asserted claims, such as claim 1. 52. In accordance with Fed. R. Civ. P. 11(b)(3), Video Streaming will likely have

additional evidentiary support after a reasonable opportunity for discovery on this issue. 53. Video Streaming has been damaged as a result of Microsoft’s infringing conduct

described herein. Microsoft is, thus, liable to Video Streaming in an amount that adequately compensates Video Streaming for Microsoft’s infringements, which, by law, cannot be less than a reasonable royalty, together with interest and costs as fixed by the Court under 35 U.S.C. § 284. (Indirect Infringement – Inducement) 54. Based on the information presently available to Video Streaming, absent

discovery, and in the alternative to direct infringement, Video Streaming contends that Microsoft has and continues to indirectly infringe one or more claims of the ‘909 patent, including at least claim 1 by inducing others (e.g., internet service providers, IPTV service providers, set-top box manufacturers, and/or web server hosts) to practice methods in violation of one or more claims of the ’909 patent. 55. Microsoft has been on notice of the ‘909 patent since at least since receipt of

service of this Complaint.

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56.

Since Microsoft has been on notice of the ’909 patent, Microsoft has knowingly

induced infringement of the ‘909 patent, including at least claim 1 of the ‘909 patent, and possessed specific intent to encourage others’ infringement. 57. Since Microsoft has been on notice of the ‘909 patent, Microsoft knew or should

have known that its actions would induce actual infringement of the ‘909 patent, including at least claim 1 of the ‘909 patent. 58. Microsoft provides support and encourages others (internet service providers,

IPTV service providers, set-top box manufacturers, and/or web server hosts) to practice the methods and infringe at least claim 1 of the ‘909 patent. On information and belief, Microsoft, at a minimum, provides support and encourages others through contractual obligations to provide services that include the performance of the patented methods. In accordance with Fed. R. Civ. P. 11(b)(3), Video Streaming will likely have additional evidentiary support after a reasonable opportunity for further investigation or discovery on this issue. 59. Microsoft has not produced any evidence as to any investigation, design around or

that any remedial action was taken with respect to the ‘909 patent. In accordance with Fed .R. Civ. P. 11(b)(3), Video Streaming will likely have additional evidentiary support after a reasonable opportunity for discovery on this issue. 60. Video Streaming has been damaged as a result of Microsoft’s infringing conduct

described in this Count. Microsoft is, thus, liable to Video Streaming in an amount that adequately compensates it for Microsoft’s infringement, which by law, cannot be less than a reasonable royalty, together with interest and costs as fixed by this Court under 35 U.S.C. § 284.

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COUNT IV (INFRINGEMENT OF U.S. PATENT NO. 6,175,595) 61. 62. Video Streaming incorporates paragraphs 1 through 60 herein by reference. This cause of action arises under the patent laws of the United States, and in

particular, 35 U.S.C. §§ 271, et seq. 63. Video Streaming is the exclusive licensee of the ’595 patent, entitled “Method

and Device for Decoding Digital Video Bitstreams and Reception Equipment Including Such a Device,” with ownership of all substantial rights in the ’595 patent, including the right exclude others and to enforce, sue and recover damages for past and future infringement. A true and correct copy of the ’595 patent is attached as Exhibit D. 64. The ‘595 patent is valid, enforceable and was duly issued in full compliance with

Title 35 of the United States Code. (Direct Infringement) 65. Microsoft has and continues to directly infringe one or more claims of the ‘595

patent in this judicial district and/or elsewhere in Illinois and the United States, including at least claim 1, without the consent or authorization of Video Streaming, by or through its making, having made, offer for sale, sale, and/or use of the patented systems and methods for decoding bitstreams. Microsoft is thereby liable for infringement of the ‘595 patent pursuant to 35 U.S.C. § 271. 66. More particularly, Microsoft has and continues to infringe at least claim 1 by,

among other things, making, using, offering for sale, selling, and/or importing the Microsoft MediaRoom product by itself or in conjunction with an IPTV set-top box or other decoder for

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streaming media (“’595 Accused Products”).

Defendants are liable for these direct

infringements of the ‘595 patent pursuant to 35 U.S.C. § 271. 67. Based on the information presently available to Video Streaming, absent

discovery, Video Streaming contends that Microsoft has and continues to directly infringe one or more claims of the ‘595 patent, including at least claim 1, by practicing the method in conjunction with other third parties who work synergistically with Microsoft to decode the bitstreams, such as set-top box manufacturers and/or manufacturers of decoders for streaming media (hereinafter “Participating Entities”). Microsoft in conjunction with the Participating Entities have, at minimum, directly infringed the ‘595 patent pursuant to 35 U.S.C § 271. 68. To the extent any of the asserted claims, such as claim 1, are construed to require

action that is performed by a Participating Entity, such actions are attributable to Microsoft in accord with the principles of joint infringement in that Microsoft retains direction and/or control over the actions of the Participating Entities. 69. On information and belief, Microsoft exerts direction or control over the

Participating Entities, at a minimum, through contractual obligations to provide services that include the performance of actions falling within at least one element of at least one of the asserted claims, such as claim 1. 70. In accordance with Fed. R. Civ. P. 11(b)(3), Video Streaming will likely have

additional evidentiary support after a reasonable opportunity for discovery on this issue. 71. Video Streaming has been damaged as a result of Microsoft’s infringing conduct

described herein. Microsoft is, thus, liable to Video Streaming in an amount that adequately compensates Video Streaming for Microsoft’s infringements, which, by law, cannot be less than

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a reasonable royalty, together with interest and costs as fixed by the Court under 35 U.S.C. § 284. (Indirect Infringement – Inducement) 72. Based on the information presently available to Video Streaming, absent

discovery, and in the alternative to direct infringement, Video Streaming contends that Microsoft has and continues to indirectly infringe one or more claims of the ‘595 patent, including at least claim 1 by inducing others (e.g., set-top box manufacturers and/or manufacturers of decoders for streaming media) to practice methods in violation of one or more claims of the ’595 patent. 73. Microsoft has been on notice of the ‘595 patent since at least since receipt of

service of this Complaint. 74. Since Microsoft has been on notice of the ’595 patent, Microsoft has knowingly

induced infringement of the ‘595 patent, including at least claim 1 of the ‘595 patent, and possessed specific intent to encourage others’ infringement. 75. Since Microsoft has been on notice of the ‘595 patent, Microsoft knew or should

have known that its actions would induce actual infringement of the ‘595 patent, including at least claim 1 of the ‘595 patent. 76. Microsoft provides support and encourages others (set-top box manufacturers

and/or manufacturers of decoders for streaming media) to practice the methods and infringe at least claim 1 of the ‘595 patent. On information and belief, Microsoft, at a minimum, provides support and encourages others through contractual obligations to provide services that include the performance of the patented methods. In accordance with Fed. R. Civ. P. 11(b)(3), Video Streaming will likely have additional evidentiary support after a reasonable opportunity for further investigation or discovery on this issue. 15

77.

Microsoft has not produced any evidence as to any investigation, design around or

that any remedial action was taken with respect to the ‘595 patent. In accordance with Fed .R. Civ. P. 11(b)(3), Video Streaming will likely have additional evidentiary support after a reasonable opportunity for discovery on this issue. 78. Video Streaming has been damaged as a result of Microsoft’s infringing conduct

described in this Count. Microsoft is, thus, liable to Video Streaming in an amount that adequately compensates it for Microsoft’s infringement, which by law, cannot be less than a reasonable royalty, together with interest and costs as fixed by this Court under 35 U.S.C. § 284. JURY DEMAND Video Streaming hereby requests a trial by jury pursuant to Rule 38 of the Federal Rules of Civil Procedure.

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PRAYER FOR RELIEF Video Streaming requests that this Court find in its favor and against Defendant, and that this Court grant Video Streaming the following relief: a. b. Enter judgment for Video Streaming on this Complaint; Enter judgment that one or more claims of the ‘318, ‘886, ‘909, and ‘595 patents have been infringed, either directly or indirectly by Defendant; c. Enter judgment that Defendant accounts for and pays to Video Streaming all damages to and costs incurred by Video Streaming because of Defendant’s infringing activities and other conduct complained of herein; d. Enter judgment that Defendant accounts for and pays to Video Streaming a reasonable royalty and an ongoing post judgment royalty because of Defendant’s past, present and future infringing activities and other conduct complained of herein; e. Award Video Streaming pre-judgment and post-judgment interest on the damages caused by Defendant’s infringing activities and other conduct complained of herein; and f. Award Video Streaming such other and further relief as the Court may deem just and proper under the circumstances.

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DATED: October 1, 2013

Respectfully submitted, /s/ Timothy E. Grochocinski Timothy E. Grochocinski Aaron W. Purser Joseph P. Oldaker INNOVALAW, P.C. 1900 Ravinia Place Orland Park, IL 60462 (708) 675-1794 teg@innovalaw.com apurser@innovalaw.com joldaker@innovalaw.com Anthony G. Simon Benjamin R. Askew Michael P. Kella THE SIMON LAW FIRM, P.C. 800 Market Street Suite 1700 St. Louis, MO 63101 (314) 241-2929 asimon@simonlawpc.com baskew@simonlawpc.com mkella@simonlawpc.com COUNSEL FOR PLAINTIFF VIDEO STREAMING SOLUTIONS LLC

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