Wednesday, January 27, 2021

In U.S.-China anti-antisuit conundrum, Samsung requests Federal Circuit to accelerate its appeal of Ericsson's Texas injunction

Twelve days ago, Samsung gave notice of its appeal of Judge Rodney Gilstrap's preliminary injunction under which Samsung would oddly have to reimburse Ericsson for fines imposed by the Intermediate People's Court of Wuhan, China, even if the court did so sua sponte (i.e., without a contempt motion by Samsung). But the temporary restraining order (TRO) the Chief Judge of the United States District Court for the Eastern District of Texas had previously entered went even further, so the pendulum has already started to swing in a direction favoring the Korean electronics giant.

It took more than a week for that appeal to be docketed, and about an hour ago, Samsung brought a motion to expedite (this post continues below the document):

21-01-26 Samsung Motion to ... by Florian Mueller

The above PDF document contains three attachments, the third of which (Attachment C) is the original Chinese anti-antisuit injunction (an English translation and the Chinese original)--just saying in case any of you are interested in seeing the court order that started it all. Meanwhile there's litigation pending in multiple jurisdictions, though in some countries (Germany, The Netherlands, and Belgium) it's over non-standard-essential patents according to Samsung's motion. That also appears to apply to an ITC complaint Ericsson brought against Samsung. I will look at the ITC cases (each party brought one complaint) in more detail once the agency has instituted the investigations (which it undoubtedly will).

Samsung proposes the following schedule:

  • Samsung's opening brief: February 22

  • Ericsson's response brief: March 22 (four weeks after the opening brief)

  • Samsung's reply brief: April 5

  • Thereafter, Samsung hopes the Federal Circuit will put oral argument on the agenda of the next available session.

Samsung argues that there is a sense of urgency as it now finds itself caught between two conflicting court rulings (one from China, one from the U.S.).

Under the proposed schedule, Ericsson's time to respond to the opening brief would be shortened by twelve days (from 40 to 28), but for the most part, Samsung would forego time to prepare filings (32 of the 60 days it would normally have for its opening brief, and 7 of the 21 days it would normally have for its reply brief).

If this looks like an "expedited" schedule, it bears mentioning that, as Samsung's motion to expedite notes as well, the preliminary injunction in Texas was briefed over the course of only nine days.

I just came to realize that this is now my third post in a row concerning procedural questions--which are often intertwined with jurisdictional ones. Patent litigation tactics have become ever more complicated (those who enjoy it would probably prefer to say "advanced" or "sophisticated"). So we're now dealing with antisuit, anti-antisuit, and anti-anti-antisuit injunctions such as in this Ericsson-Samsung dispute. Yesterday it became known that automotive supplier Continental brought some claims in a Delaware state court (a truly special state court) in order to obtain a standard-essential patent (SEP) license from Nokia at the component level; and Judge Tobias Pichlmaier of the Munich I Regional Court referred to the top EU court the question of whether preliminary injunctions should be granted more liberally even over untested patents.

This procedurally-focused trilogy isn't merely coincidental. Procedural and jurisdictional questions have become ever more important over the past decade. I remember how innovative Microsoft's motion for an antisuit injunction in the Western District of Washington (against Motorola) and Judge James Robart's decision to grant it seemed in 2012. Nine years later, it's almost as if a major SEP dispute without some kind of antisuit or anti-antisuit activity is hard to come by...

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Tuesday, January 26, 2021

Continental brings complaint against Nokia in Delaware state court: new U.S. FRAND litigation strategy may protect Daimler

Automotive supplier Continental brought FRAND litigation against the Avanci pool and several of its contributors, particularly Nokia, in 2019. But its federal lawsuit was transferred from the Northern District of California to the Northern District of Texas (i.e., Dallas), and in September it was dismissed. Continental has appealed the dismissal to the Fifth Circuit. But "Conti" (as the company is commonly referred to in the automotive industry) isn't just waiting for the appellate proceedings to unfold (a decision will likely take about a year from now). Instead, Conti has now brought a new complaint specifically against Nokia in Delaware state court, and that one has the potential to become one of the most interesting FRAND cases worldwide (this post continues below the document):

21-01-25 Continental v. Nok... by Florian Mueller

Conti issued a press release about this case, which says the automotive supplier is "seeking to hold Nokia to its promise to license telecommunications patents based on fair, reasonable and non-discriminatory (FRAND) terms" and nevertheless pursues antitrust claims against Avanci, Nokia and others in its federal case that is on appeal, "upholds its complaint with the European Commission against Nokia's abusive refusal of a FRAND license," and they're looking forward to the Court of Justice of the EU's decision on Nokia's obligations to grant exhaustive component-level SEP licenses (Nokia appealed the referral, but unsuccessfully so far).

The first question I asked myself was whether there was any overlap between this separate Delaware action against Nokia and the case that got dismissed in Texas, but might still be revived by the Fifth Circuit. It turns out that the FRAND contract claims (based on Nokia's FRAND pledges to ETSI, ATIS, and TIA) do, but in order to understand what that means, a clear distinction is key: the case dismissed in Dallas involves a mix of federal (antitrust) and state (mostly contract) claims. What the Dallas court dismissed with prejudice was the federal part--and that dismissal basically took the state law claims with it because a federal court won't hear a state claim unless there's a related federal claim in the same case. Should Conti's appeal succeed (too early to tell, but I don't expect it to be a cakewalk for them), some claims might be brought back to life, but by then the Delaware proceedings would already be fairly advanced and Conti could just drop such claims from the Texas action.

Should Conti obtain a FRAND license, its customers such as Daimler would be protected against Nokia's patent assertions.

Facing a FRAND case in the Court of Chancery of the State of Delaware is a blast from the past for the Finnish company, which sued Qualcomm there more than a decade ago in order to obtain a SEP license on FRAND terms, taking positions diametrically opposed to where it stands now that it's exited the handset business. Later, Nokia sued Apple in federal court in Delaware (not only, but also, over SEPs). In its dispute with Apple, Nokia described Delaware as its "corporate home in the United States," which Conti's complaint mentions in what might be a pre-emptive strike against any objections by Nokia to that particular venue.

I just mentioned Qualcomm, and the agreement that resulted from Nokia's Delaware action against Qualcomm could now set a ceiling for Nokia's FRAND royalty demands. First, a covenant not to sue triggers patent exhaustion in the U.S. under the Supreme Court's Quanta decision, and Conti is a Qualcomm customer. Second, "Nokia promised to offer certain royalty rates to Qualcomm’s customers." That license agreement didn't explicitly mention telematics control units (TCUs) like the ones Conti supplies to Daimler. So there'll have to be some discussion about whether Nokia's maximum-royalty promise applies. If it does, Nokia won't be able to base its royalty demands on the price of a car (or the value Nokia claims cellular connectivity adds to a car).

The question of whether a TCU is the equivalent of a mobile handset for SEP licensing purposes is also going to come up in the CJEU case over component-level licensing.

After California and Texas, Delaware--also known as The First State--is now the third U.S. state in which Conti is going after Nokia. Geographically speaking, the dispute has traveled from coast to coast, eastbound. I disagreed with some of what Conti did in California; I didn't follow the Texas case in detail, and the dismissal wasn't totally surprising; but this Delaware action--in what is probably the best state court in the U.S. to focus on commercial litigation--looks truly interesting. They're making good use of the time that it takes in the Fifth Circuit to defibrillate (which may or may not work out) the original Avanci case. And its own history in that venue will now come back to haunt Nokia, potentially resulting in royalties far below what it's seeking from Daimler.

Just looking at the extreme lengths to which Conti has to go to obtain a license from Nokia, I can't help but find it absurd how any German judge could deem a Conti customer like Daimler to be an unwilling licensee. There's an unwilling licensor here, Nokia, and figuratively speaking, Conti is chasing that one across the USA. Delaware may be the final destination in that regard.

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Leapfrogging to Luxembourg: Munich I Regional Court refers to the CJEU the question of access to preliminary injunctions over untested patents

Over the years, the Supreme Court of the United States decided a number of patent cases, which is reflective of how important some controversies in that field of law are. Critics of the Federal Circuit would say the Supreme Court just had to step in all the time to restore sanity.

There may be a trend now toward ever more top-court patent rulings in the European Union, too. While Nokia is stalling and still delaying the Dusseldorf Regional Court's referral of component-level standard-essential patent (SEP) licensing questions to the Court of Justice of the European Union (CJEU), the 21st Civil Chamber of the Munich I Regional Court (Presiding Judge: Tobias Pichlmaier) announced last week that it would like the top EU court to answer the following question (I've taken some liberties in translating it):

"Is it a correct application of Art. 9 para. 1 of Directive 2004/48/EC that higher regional courts, whose decisions cannot be appealed further in preliminary injunction proceedings, generally deny injunctive relief over patent infringement if the patent-in-suit has not survived an opposition or nullity proceeding in the first instance?"

The cited directive is the EU's Intellectual Property Rights Enforcement Directive (IPRED).

I sharply disagree in policy terms (too many junk patents out there to justify preliminary injunctions unless a patent has been battle-tested). If the CJEU lowered the hurdle for patent PIs, that would have terrible repercussions all over Europe.

Therefore, I call on large companies and industry associations interested in balanced patent policy to get in touch with defendant Harting Technology Group (found the name in a Juve Patent article) and push back really hard. In my view, one cannot prevent the referral from happening; just like Nokia, one could try to delay it. But when it happens, it will be key to ensure that the governments of as many EU member states as possible understand the huge patent quality problem that justifies the stance of the Dusseldorf, Karlsruhe (for Mannheim) and Munich appeals courts on patent PIs.

Despite my disagreement, I want to be fair. It's no secret that the patentee-friendly leanings of both patent-specialized divisions of the Munich court are too extreme for my taste. And I criticized this particular division's covidiocies last year. But that doesn't mean they're not good at what they do, even if what they do is bad for the economy.

They phrased their question clearly and concisely, while the Dusseldorf court's component-level licensing questions are at least twice as long as they'd have to be.

Lower courts have the right to make those referrals to the CJEU, and in this particular case, the Munich court accurately notes that the higher regional courts' (regional appeals courts') decisions on PIs aren't reviewable. So if the Munich judges are concerned about a misapplication of EU law, this referral is the only option they have to fix what they, in their pro-patentee radicalism, consider to be a problem. I view the status quo as a pragmatic solution because otherwise you'd see PIs over patents in Germany all the time, and they'd give the prevailing patentees so much leverage that hardly any of those patents-in-suit would ever come to a validity judgment by the Federal Patent Court (or be reexamined by the European Patent Office in an opposition proceeding).

This is the relevant EU statute:

"1. Member States shall ensure that the judicial authorities may, at the request of the applicant:

(a) issue against the alleged infringer an interlocutory injunction intended to prevent any imminent infringement of an intellectual property right, or to forbid, on a provisional basis and subject, where appropriate, to a recurring penalty payment where provided for by national law, the continuation of the alleged infringements of that right, or to make such continuation subject to the lodging of guarantees intended to ensure the compensation of the rightholder; an interlocutory injunction may also be issued, under the same conditions, against an intermediary whose services are being used by a third party to infringe an intellectual property right; injunctions against intermediaries whose services are used by a third party to infringe a copyright or a related right are covered by Directive 2001/29/EC;

(b) order the seizure or delivery up of the goods suspected of infringing an intellectual property right so as to prevent their entry into or movement within the channels of commerce."

That statute doesn't say anything about the standard applied to a patent-in-suit. It's just a summary of what structural options exist to enjoin an infringer and prevent further infringement. But the Munich judges apparently hope that the CJEU may be concerned about those three German regional appeals courts restricting access to PIs to an extent that vitiates the statute in question.

The same directive also requires remedies to be proportionate (see this presentation by Cleary Gottlieb's Maurits Dolmans at a Brussels conference I organized in 2019). That is the most controversial part of the debate in the ongoing German patent reform process. On January 13, 2021, that patent reform bill was formally delivered to the Bundestag (Federal Parliament). The Munich court's CJEU referral obviously runs counter to the reform efforts. While automotive and other companies have been lobbying hard against the current regime of near-automatic permanent injunctions, the Munich court is now trying to leverage EU law in order to lower the bar for preliminary injunctions.

About a year ago I already warned some pro-reform forces against the risk that the German patent injunction mess might be even worse after the reform than before. That seemed counterintuitive, and it's possible that some thought I was exaggerating. By now, there's a clear and present danger of a further exacerbation of the German patent injunction situation:

  • Pro-reform forces made the mistake of not pushing hard and loud for a serious reform. They say they initially had to make very modest demands to get the ball rolling at all. I'm not denying that overreaching demands can be counterproductive--but if you ask lawmakers for too little, and not only at the outset of a process but even at later stages, you're simply not going to get anything useful and helpful out of it.

  • By contrast, those opposing reform make it sound like the sky was falling down when statutory amendments are being discussed that won't actually change the situation in more than maybe one or two cases per year. They fiercely oppose anything that maybe a future generation of judges could interpret differently, even though they have pretty much nothing to fear from the judges currently deciding German patent cases.

  • Pro-reform forces have lost one lobbying battle after the other, most recently with respect to the Federal Council's advisory opinion. When are they going to get tired of losing? Why don't they realize they simply lack what it takes to win? They are just so misguided.

  • The proposed reform won't impact SEP cases in the slightest, not even in the opinion of Presiding Judge Dr. Thomas Kuehnen (Dusseldorf Higher Regional Court). But the Federal Court of Justice has meanwhile issued its Sisvel v. Haier decision, and the way the lower courts apply it comes down to saying that there's no such thing anymore as a willing licensee, as Professor Christian Donle explained in my recent podcast.

  • Now there is that real risk of the top EU court agreeing with the Munich court that the standard for preliminary patent injunctions should be lower than the one applied by the three regional appeals courts that hear the vast majority of all German patent infringement appeals (Dusseldorf, Karlsruhe, Munich).

What could possibly go wrong?

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Friday, January 22, 2021

Filed complaints with competition authorities about Apple's and Google's COVID app rules

Reuters just reported on my antitrust complaints to competition authorities in multiple jurisdictions, challenging the basis on which they don't allow tens of millions of app developers to publish COVID-related apps on their stores, no matter how legitimate those apps may be.

In alphabetical order, these are the jurisdictions:

  • Australia: Australian Competition and Consumer Commission

  • European Union: European Commission, Directorate-General for Competition (DG COMP)

  • Germany: Bundeskartellamt (Federal Cartel Office)

  • The Netherlands: Autoriteit Consument & Markt (Authority for Consumers & Markets)

  • United Kingdom: Competition & Markets Authority

  • United States: Department of Justice

On Monday I will also file with the Competition Commission of India.

What these jurisdictions have in common is that they've all been particularly affected by COVID-19, and these competition authorities either have ongoing investigations or pending complaints or (in the case of the Federal Cartel Office of Germany) have expressed an interest in app platform antitrust issues.

For me it was quite a difficult decision to do this. I'd rather just have continued to watch cases like Epic Games v. Apple, but after much thought I concluded that the issue I have with Apple and Google in this context is part of a broader problem. When I made this decision, I had no idea that a U.S. antitrust lawsuit over Apple's COVID app rules--Coronavirus Reporter v. Apple--was being prepared. I learned about it only a couple of days ago, and commented on it today. But I figured that there'd be other legitimate COVID-related apps that must have been rejected only because they were not submitted by governmental entities or healthcare providers.

What my company had to do to our Corona Control Game in order to comply with Apple's and Google's rules is best explained with an analogy:

Imagine what it would have meant if the makers of the Titanic film had had to deal with only two movie theater operators, each of which controlled a distinct part of the world. Each of these cinema operators would have stated its rules slightly differently, but the net effect would have been the same: do the Titanic film without the Titanic ship, or else.

The distribution channel would have given no reason for that, or maybe it would have told the movie company that the Titanic was such a tragedy that it's offensive to create an entertainment product involving it.

The message would have been: you can make a movie about a sinking luxury ship. So if you name it "Sinking Ship", "Luxury Ship", or give it a fantasy name like "Dobogandalupa", that solves the problem with the title. But that's not enough: the ship must not look like the Titanic, it must not bear the name "Titanic", any tickets, posters or whatever must not contain that name, and, lest we forget, the actresses and actors must never say "Titanic".

Technically, it would be pretty much the same film if you analyze it purely quantitatively. You could have the same storyline and the same cast, but... it would be the Titanic film without the Titanic ship. It becomes a different product. A creative product like a game is not just a question of how many lines of your program code you can reuse (that percentage was obviously pretty close to 100%).

There were some opportunists who simply rebranded and rethemed sidescrolling jump-and-run games or Angry-Birds-style games to get attention for a "COVID" game. But those games weren't legitimate COVID games. Their gameplay had nothing to do with the problem of viral contagion, much less with disease control measures.

Despite the restrictions, some reviews noted the game's ability to make a positive contribution to the fight against COVID-19. Some examples:

That's nice, but it still doesn't solve the problem. People who are looking for a COVID-themed game should be able to find it, because it's a legitimate game about viral infections (this post continues below the video):

We also created a special edition, Viral Leaders Trump & Johnson, which Google approved, but Apple rejected. You can find it here (Android app, or as a browser game on Mac and Windows computers).

As the Reuters article notes, "Google and Apple rules say COVID-19 related apps must be government approved in order to avoid promoting conflicting or incorrect health advice" (and Apple just banned all COVID-related games, no matter how legitimate).

I have only this one issue with those companies (and with Google I disagree on API copyrights, but that's nothing new). I tend to agree with them on patent policy, especially when it comes to standard-essential patents. But their COVID app rules, which adversely affected my creative product and, as the Coronavirus Reporter v. Apple case shows, caused harm to other kinds of apps, are unreasonably restrictive--and the stated reason (ensuring that users aren't misinformed) is totally inconsistent with the fact that both Apple and Google distribute products that definitely misinform users in connection with COVID-19 and its symptoms:

On the App Store and on the Google Play Store, you can find homeopathy apps. Give me a break. That's a scam, and it's been debunked over and over. The Department of Justice--one of the agencies I'm complaining to--has even taken legal action against someone who recommended homeopathic medications in connection with COVID-19 ("U.S. Attorney’s Office Files Enforcement Action Against Chiropractor Promoting Fake COVID-19 Treatment").

If Apple and Google are all that concerned about people being misinformed during this pandemic, the best starting point is not to disallow an app like Coronavirus Reporter, which merely lets users communicate, or an educational game that was designed from ground up to encourage people--especially, but not only younger audiences--to comply with governmental disease control efforts. Instead, Apple and Google should purge their app stores of homeopathy apps.

It's not just that they're distributing homeopathy apps. It gets a lot worse. They even distribute books that tell people the best way to confront a pandemic is to rely on homeopathy. Here's the Apple Books Preview of Homeopathy for Epidemics, and here's the Google Play Store page. On the Google Play Store I even found this book: Ancient Bible And Modern Natural Secrets To Fight Virus Epidemics. Yeah, that's probably the best way to keep iOS and Android users healthy. The description of that book specifically mentions homeopathy. So some nutheads and some credulous people who believe in homeopathy will get infected and go on to infect others. And many of them will oppose vaccination. That's just what society needs these days.

I also don't understand why Apple allows a Mac app, Amphetamine, to be named after an addictive substance. In that case, the name simply isn't necessary: some may find it funny, but in reality it promotes bad stuff and there would be non-objectionable, even more descriptive alternatives.

While my game demonstrates the problem of viral infections and encourages good behavior, one of the most popular apps on both those stores has the following objective: "Infect the world." That other title is about creating a deadly pathogen and extinguishing humanity despite people's disease control efforts. If depraved and/or deranged people play that in the midst of a pandemic, such a game might even induce them to spread the coronavirus with full intent.

On this blog I'm not going to cover my own complaints more extensively than I would if others had brought the same complaints. Actually, there are things I won't say when I'm a complainant but do say when I just watch cases. I did, however, wish to shed some light here on why I did what I did.

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Subjectiveness of app reviews: Viral Leaders Trump & Johnson (satirical fun game) approved by Google, inexplicably found objectionable by Apple

[Update on 02/09/2021] A subsequent, refocused version of Viral Leaders, the "Impeachment Edition" (on the occasion of the Senate impeachment trial of former president Donald Trump), was approved by Apple. [/Update]

One of the issues raised in the Coronavirus Reporter v. Apple antitrust complaint in the District of New Hampshire is the allegation that Apple's app reviews are "arbitrary and capricious" to the extent that one app might be rejected though a similar or more problematic app is approved. I've also heard people say this about Google, and I can prove at least an inconsistency with respect to the application of its rule on COVID-related metadata, where a game is allowed to use the term "pandemic" in its Google Play Store description though this is expressly prohibited by Google unless an app is (co-)published by a governmental or recognized healthcare entity, which isn't the case.

Some criticize Apple and Google for collecting 30% of some companies' in-app revenues while others get a free ride even though, as those critics argue, they should be subjected to that "app store tax" as well. I haven't formed an opinion on that assertion yet, but it wouldn't surprise me if it was true.

One week ago, Apple's App Review Department sent my app development company the following email:

"Your app, Viral Leaders Trump & Johnson 1.0.0 (0), has been reviewed, but cannot be made available for TestFlight beta testing.

"For details, or to contact App Store Review, visit Resolution Center in App Store Connect."

In App Store Connect, Apple merely referenced its app review guideline 1.1 Objectionable Content. No further explanation given--and we weren't even allowed to test that app via the TestFlight beta version distribution system.

Google, however, approved it about 24 hours ago for the Google Play Store. It had previously been approved for testing on the 17th (Sunday).

Seriously, there is nothing objectionable about Viral Leaders Trump & Johnson. It's simply a special edition of my Viral Days real-time strategy game. In Viral Days, you take care of little cartoony people walking the streets of a fictional town during a virus pandemic. In that game you can buy and distribute masks, quarantine or hospitalize people, disperse groups, and impose lockdowns. It comes with 25 levels. Now, Viral Leaders has just one level, and features cartoony versions of ex-president Donald Trump and British prime minister Boris Johnson. Both famously caught a virus last year after downplaying its significance. In Viral Leaders, they spread the virus to ordinary citizens, so you best send them home as soon as you can afford it (2,000 virtual coins).

The politicians stop from time to time to say something. Many of those quotes are real, while others are just fun, but there's nothing offensive in the game.

Here are a few social media posts so you can see how far this is from "objectionable content":

When we submitted the app, we provided to Apple a complete list of all the things those politicians say in the game. If Apple had taken issue with any particular ones of those utterances, they'd have let us know. So Apple's concern must have been more fundamental.

But what is it? It can'be about the virus context, given that one of the most popular games on the App Store, named Plague Inc., is traditionally (they now call it the "main game") about "infect[ing] the world". By contrast, Viral Leaders, just like Viral Days, is all about preventing the spread of the virus.

It can't be about poking fun at Trump either. In my game, all that one can do to him is click on him, spend 2,000 virtual coins, and then he says "I'm fired!" and goes home. There are various Trump fun apps on the App Store, and at least one of them, named Slap Donald Trump, even depicts and thereby encourages physical violence against him. The icon of that app (which you can see if you click on the link I just provided) shows a photo of Donald Trump's face, a hand hitting him, and that side of his face turning red. If Slap Donald Trump is allowed, how in the world can Viral Leaders Trump & Johnson be deemed objectionable?

I immediately thought of this when I read in the Coronavirus Reporter v. Apple complaint that "the Apple App Store violates antitrust law by disallowing third-party applications using arbitrary and capricious standards."

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Coronavirus Reporter complaint against Apple raises serious antitrust issues: Apple's COVID app rule should be declared illegal (Google's isn't better)

After almost six months of commenting on App Store antitrust cases, above all Epic Games v. Apple, the time has come for me to state clearly that, just like Epic, I am convinced that Apple and Google have monopoly power in their respective app distribution markets. And while the focus varies from app maker to app maker, I, too, have experienced and continue to experience abusive conduct by both.

So far, I had expressed firm opinions solely on aspects of Epic's case against Apple that related to access to emergency relief (temporary restraining order, preliminary injunction). Especially after I heard Judge Yvonne Gonzalez Rogers (Northern District of California) tell counsel for Epic and Apple that the key issues in the case wouldn't be decided at that early stage, I wanted to take my time to understand. Now, I'm not saying I necessarily agree with Epic on each and every aspect of its cases (though I may when the cases go to trial), and I'm particularly not taking a position on the 30% cut yet. But there's one thing I can say at this stage: I definitely concur with Epic's definition of app distribution markets and its assertion that Apple and Google possess monopoly power in those markets.

The clearest case of abuse of that monopoly power to have come to light so far is the Coronavirus Reporter v. Apple litigation in the District of New Hampshire (this post continues below the document):

21-01-19 Coronavirus Report... by Florian Mueller

The Coronavirus Reporter app, if Apple had not withheld it from the iOS user base, would have served as a communication s tool. People could have reported their COVID-19 symptoms along with their location, their health status, their test results, and whether they were in quarantine. For screenshots etc. let me refer you to this article by The Register's Thomas Claburn.

At a time when there was no corona app on the App Store, the Coronavirus Reporter development team submitted its app, but Apple rejected it because it would accept COVID applications only "from recognized institutions such as government, hospital, insurance company, NGO, or a university." Shortly thereafter, Apple published an updated version of that clarification of how it intended to interpret its review guidelines, hypocritically entitled Ensuring the Credibility of Health & Safety Information. Later today I will publish evidence that Apple actually does the very opposite in connection with a list of products, and I'm not talking about user-generated content, which Apple obviously couldn't control.

The Apple statement I just linked to is outrageous. The first paragraph is simply a marketing statement and, as I just said, Apple's own decisions belie it.

The second paragraph says Apple is "evaluating apps critically"--but if that's what Apple truly meant, they'd have to review COVID-related submissions on an app-by-app basis, and not just rule out broad categories of submissions ("Entertainment or game apps with COVID-19 as their theme will not be allowed.") without sifting the wheat from the chaff, and they wouldn't reject COVID-related apps from tens of millions of developers when those apps, like Coronavirus Reporter, could be developed by aný developer. In Coronavirus Reporter's case, what makes it even more absurd is that they actually claim to have NASA's former Chief Physician (during the Space Race) on their team. But that shouldn't even be necessary for an app that is all about the information exchange between users.

The complaint is right that Apple's COVID contact-tracing initiative, on which they ultimately partnered with Google, failed to deliver significant benefits to society. Some of the world's most reputable media have discussed the failure of contact-tracing apps (except, of course, in a few countries such as China and South Korea, where they did have an effect but where their use was mandated by governments). Here's a headline from a November 2020 TIME magazine article:

"Contact Tracing Apps Were Big Tech's Best Idea for Fighting COVID-19. Why Haven't They Helped?"

Coronavirus Reporter is suing Apple for damages and seeking a permanent injunction that would "restraining Defendant’s App Store from restricting reasonable applications from access to the global internet." I, too, believe Apple is liable for damages because its position on COVID apps constitutes monopoly abuse; I agree with Coronavirus Reporter that "the Apple App Store violates antitrust law by disallowing third-party applications using arbitrary and capricious standards"; and I do believe Apple's conduct should be enjoined, though I'd have phrased the prayer for injunctive relief differently (I don't see a point in that reference to "the global internet" when it's about the ability to have access to the iOS user base; and I'd have to think about whether the requested injunction would have to be a bit more specific).

The complaint notes that other app developers have received similar treatment from Apple. I'm one of them, and I'm sure there are many others. Apparently Coronavirus Reporter's lawyer would like to put together a class action, for which he needs other plaintiffs to join. If the prayer for injunctive relief was phrased differently, and if the complaint could be amended (though it already does make a number of very good points), I would give serious consideration to joining. If I don't join, I'll evaluate the possibility of filing an amicus curiae brief in support of plaintiff at some point.

My next two posts will also discuss App Store issues. I'm now officially a member of the #AppRising movement. That doesn't mean that I agree with every single app developer on everything; in fact, that would even be impossible, given that it's a diverse group of people and entities. But I, too, have concluded that the most noble cause in the history of the tech industry is to fight against Apple's and Google's abuse of their app distribution monopolies. (Google's position on COVID-related apps isn't really better than Apple's.)

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Saturday, January 16, 2021

Samsung appeals Ericsson's anti-antisuit injunction from Texas to the Federal Circuit

On Monday, Judge Rodney Gilstrap of the United States District Court for the Eastern District of Texas granted Ericsson an anti-antisuit preliminary injunction against Samsung's Chinese antisuit action, but backtracked a bit by narrowing the scope as compared to the temporary restraining order (TRO) in the same matter. I had criticized several aspects of the TRO and the PI-related case management. It was almost impossible to imagine that an appeals court would have upheld the extremely overreaching parts Judge Gilstrap has jettisoned, but what about the rest?

Anything but unexpectedly, Samsung has now given notice of its appeal of the PI order to the United States Court of Appeals for the Federal Circuit (this post continues below the document):

21-01-15 Samsung Notice of ... by Florian Mueller

The Federal Circuit hasn't docketed the appeal yet, presumably because notice was given late in the day. On Monday the Texas court will probably provide a set of documents to the appeals court, and then we'll see the exact scope of Samsung'S appeal and the legal arguments.

Fifth Circuit law is technically controlling, but the Federal Circuit has its own culture and philosophy. As always, a lot will depend on what panel this is assigned to. I just hope--and I really am reasonably confident, having listened to many Federal Circuit hearings over the years--they won't just be driven by instict in terms of seeking to maximize the number of U.S. patent cases that get filed and litigated. Two former Federal Circuit chief judges have made filings in this matter: Randall R. Rader is pretty sure of the fairness and overall quality of the Chinese case, while Paul Michel filed an amicus brief in support of Ericsson's position and is far more interested in attracting lots of patent cases to the U.S. than in such concepts as international comity. This is serious stuff: we're witnessing a global anti-anti-antisuit hot mess, and a race to the bottom. If every jurisdiction participating in those long-distance battles just focuses on how to maximize its number of cases, and no one defers to some other court at some point, the jurisdiction that imposes the sanctions that hurt defendants the most will be the winner who takes all. And that's not going to be the United States with its constitutional limits.

An international treaty on patent litigation might be needed to put the genie back in the bottle. In order to be binding on the courts, such a treaty would have to be ratified by national legislatures. We're not yet at the point where an intergovernmental solution is on the horizon. I just wanted to point out that this is getting out of hand and the jury is still out on whether the appeals courts are willing and able to fix the problem. The UK Supreme Court made its fateful Unwired Planet decision in August, and with the UK having left the EU (which enables them to outvaccinate any one of the largest continental countries by a wide margin), the CJEU can't correct that terrible mistake anymore. Nor can the Federal Circuit, of course--but it can make the American legal community proud and leave it to others to sow chaos.

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Best outcome of impeachment for development of law: Supreme Court clarifies meaning of "high" in "high crimes and misdemeanors"

After years of making pro-Trump comments (except in connection with patent policy, where a couple of his appointees did terrible things), I was shocked by the absurd positions he took on SARS-CoV-2 last year--even by utterances that weren't nearly as crazy as suggesting that one might inject disinfectants. Those who have read my comments on other issues know that I view COVID-19 as the moment of truth. Politicians who failed to do their job in that most critical context in a long time don't deserve to be supported or trusted, but I found myself in agreement with politicians I fundamentally disagreed with on other issues. Only a minority of Trump supporters has a similar set of priorities, but apparently enough for him to lose the election. While some conspiracy theorists portrayed the outcome of the mail-in vote in various places as a statistical anomaly, there actually is a simple explanation: people so afraid of COVID they'd rather vote by mail were extremely unlikely to have faith in Donald Trump. What might have been a statistical anomaly under "all other things being equal" circumstances just doesn't apply here.

Similarly, the fact that Trump held huge rallies, unlike the President-elect, doesn't tell us anything about the fairness of the election. Even under normal circumstances, rallies aren't tallies. But they do normally indicate the enthusiasm of a party base. The 2020 U.S. presidential campaign was totally different, mostly because of COVID, and secondarily because many people didn't have to be huge Biden fans in order to vote for him: this time around, even Hillary would most likely have won. And I almost feel like predicting that four years of the Biden Administration, unless his waning physical fitness requires him to step down too early, will be followed by one or two Harris terms, and I'd even predict she'll win Texas, considering some overall trends and developments, including some relocation decisions by tech companies.

The GOP will have to reinvent itself and probably won't even start that process anytime soon. A tectonic shift comparable to the one under FDR--who broadened the appeal of the Democratic Party--would be needed for a GOP candidate to be elected POTUS again. Without the Electoral College, the GOP would already have had to reposition itself on a lot of issues, as they won the popular vote in only one out of the last eight presidential elections, and who knows whether that one exception would even have happened without 9/11.

It's obviously hard to strike the right balance between giving everyone, including minorities, fair access to an election and making an election secure. Congressman Dan Crenshaw and his guests, one of whom is a University of Texas law professor, made great points about that in this podcast. Shortcomings should be addressed and I hope Democrats will be principled enough to do that in certain states. That said, there's really no reason not to assume Trump's covidiocies--and not a multi-state conspiracy to commit election fraud--cost Trump the election.

There have been credible reports of Trump being "entranced" by watching the Capitol riots on TV, a state of mind that prevented him from saying the right things in the right away-and sooner. The American system of government wasn't under serious threat for even one second, but if those reports are indeed true (all I can say is they sound credible and they're consistent with everything that is known, including the timeline), then it would even have been warranted to invoke the 25th Amendment.

The impeachment resolution by the House of Representatives isn't based on his behavior in front of his TV set in the White House, which disqualifies the person in some fundamental ways (I'm really very disappointed), yet doesn't qualify as a "high crime and misdemeanor." So the article of impeachment talks about his call with Georgia Secy. of State Brad Raffensperger as an effort to subvert the election certification process, and about incitement of an insurrection in accordance with the 14th Amendment.

Trump's defenses are obvious: he's already said the Raffensperger call was about "settlement" of pending litigation, and in his January 6 speech he used the word "peacefully" (though in that same speech he urged supporters to "fight like hell"), so there's a free-speech issue that the Supreme Court resolved in Brandenburg v. Ohio, clarifying that it's all free spech until someone incites "imminent illegal action" (but by design--"likely" to have the effect--not coincidence).

What individual Republican senators (especially the 20 who need to run for re-election next year unless they retire) consider to be best for their career remains to be seen. For their party, it would undoubtedly be best if a sufficient number of them joined Democrats and impeached Trump. Given that the sole remedy relevant after he's left office will be the disqualification from any future federal office, there is, however, the possibility of the Supreme Court hearing an appeal. And that's what I actually hope will happen, but for the sake of clarification.

As the Cornell Law School webpage explains, there are different opinions on what the "high" in Treason, Bribery, or other high Crimes and Misdemeanors" means.

What would benefit Trump would be an interpretation of "high" as "very serious," as some argue that the word "other" means it must be at a level with treason and bribery. But the alternative interpretation--and that's actually the one I prefer--is that "high" in this context refers to the office of the one who committed the alleged wrongdoing, not in the sense of making anything reproachable a potential basis for impeachment, but connecting it to how someone carried out their duties as opposed to, say, a minor offense in their private life.

The line-drawing problem here is that too low a standard would give Congress too much latitude. In parliamentary democracies, such as some European countries, the head of government can be voted out of office by a parliamentary vote. The U.S. system is more presidential. And now, with all that happened on 1/6, there is a situation where the exacting standard of criminal law may not be met. Also, the fact that it's "only" about disqualification (because it's too late for removal from office) doesn't change the standard, though some commentators almost make it sound like that.

The Senate basically makes its own case law so far in presidential impeachment trials. I don't think it would be wrong for senators to vote for impeachment even if Trump's actions might be protected in a conventional criminal proceeding by rules affording settlement talks and free speech strong protection. Honestly, I would be disappointed if the Senate acquitted him because future presidents should learn a lesson even before they take office so they refrain from actions like that in the first place.

The Supreme Court can clarify what the word "high" means in this particular context. I know some don't think so, but I found arguments in favor of review more convincing, though I don't mean to say that--in more timely cases--a removal from office should be delayed that way. I hope the SCOTUS will have the last word. The judges appointed by Trump, at different levels of the judiciary, have recently shown their independence. Democrats will find it hard to trust them on this one, but I believe they should. Justice Barrett is new, but Justices Gorsuch and Kavanaugh have been serving on the SCOTUS for some time already and they're going to look at the issue, not the party. They know that whatever they decide will apply next time that a Democratic president may engage in problematic conduct. And there may now actually be a line of Democratic presidents that will be longer, possibly far longer, than many Republicans would acknowledge. Even without Trump's disgraceful fourth year in the White House, Texas was going to turn blue in the near term, as Arizona has (possibly on a lasting basis), and Puerto Rico can't be denied statehood for too much longer. One can only hope that Democratic policies won't move too far to the left...

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Friday, January 15, 2021

Dusseldorf Regional Court stands by CJEU referral of patent licensing questions, Nokia's interlocutory appeal goes up to Dusseldorf Higher Regional Court

While the four members of the panel discussion I published as a podcast earlier this week expressed a diversity of views, there was a consensus about the potentially high impact of the Dusseldorf Regional Court's decision to refer a set of standard-essential patent (SEP) licensing questions to the Court of Justice of the European Union (CJEU). But those questions haven't arrived in Luxembourg (the CJEU's seat) yet, as Nokia brought an interlocutory appeal last month.

The way those interlocutory appeals work in Germany is that the lower court firstly treats it as what in the U.S. would be called a motion for reconsideration. If it changes mind, the appeal has succeeded. Otherwise the appeal will go up to the next higher court.

The latter is what has happened here. Just today, the Dusseldorf Regional Court's 4c Civil Chamber (Presiding Judge: Sabine Klepsch) handed down its decision and, as presumably everyone (even Nokia) expected, defended its referral order. Prior to doing so, the panel held that the decision isn't appealable in the first place. Appealability was addressed by Nokia's outside counsel from the Arnold & Ruess firm at length, but to no avail. So from the lower court's perspective, Nokia's appeal is both procedurally impossible (as the court noted that most German courts consider those appeals inadmissible and the cases cited by Nokia were deemed inapposite) and substantively meritless. By disagreeing with Nokia in only one of those two ways, the court wouldn't have had to reach the other part, but sought to make its order doubly appeal-proof.

So there are two hurdles for Nokia to overcome now before the appeals court, the Oberlandesgericht Düsseldorf (Dusseldorf Higher Regional Court). I'd be very surprised if this interlocutory appeal succeeded there. Affirmance may take a few weeks, and then, finally, the issues raised will be put before the top EU court.

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Tuesday, January 12, 2021

Podcast on developments relating to component-level SEP licensing, particularly the referral of a set of questions to the CJEU by a German court

About a year after my Brussels conference on the component-level licensing of standard-essential patents (SEPs), I invited the members of the first panel discussion of that conference to produce a podcast

  • for a general update on key developments surrounding the component-level licensing of SEPs since our November 2019 panel, and

  • to discuss in depth the implications of the Dusseldorf Regional Court's decision to refer to the Court of Justice of the EU a set of key legal questions (relating to component-level licensing as well as the application of the Huawei v. ZTE framework).

I'm so grateful to all four of them (in alphabetical order of last name: Professor Christian Donle of Preu Bohlig, Jay Jurata of Orrick Herrington Sutcliffe, Paul Lugard of Baker Botts, and Pat Treacy of Bristows) accepted. They rocked again! Never change a winning team. So rather than talk much more about this podcast, here's the recording (total duration: approx. 69 minutes):

Hope you find it informative.

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Monday, January 11, 2021

Judge grants in part Ericsson's motion for preliminary anti-antisuit injunction against Samsung's Chinese action

In my last post of the year 2020, I criticized rather harshly the overreaching nature of Judge Rodney Gilstrap's temporary restraining order (TRO) in Ericsson v. Samsung (Eastern District of Texas). The TRO has just been converted into a preliminary injunction (PI), but not in its entirety. A couple of elements of the TRO that I thought went too far have been dropped: Ericsson can't use the U.S. court to force Samsung to provide documents from the Chinese litigation, and should Ericsson seek any indemnification for fines the Chinese court may impose as a result of Samsung's antisuit injunction, it can do so only to the extent that such fines relate to the impact of the Chinese antisuit injunction on Ericsson's action in the Eastern District of Texas, but not with respect to cases in other jurisdictions. Here's today's PI order (this post continues below the document):

21-01-11 Ericsson v. Samsun... by Florian Mueller

This order is appealable to the Federal Circuit, and an appeal is very likely. While slightly less broad than the TRO, this PI still raises serious questions. At the heart of Judge Gilstrap's decision to enjoin Samsung is that he believes the FRAND case before him is different from Samsung's earlier-field Wuhan case:

"The Wuhan Court is asked to provide a number. This Court is asked to evaluate conduct. The legal questions presented to each Court are different."

Similarly, Judge Gilstrap says Ericsson's U.S. case is about a cross-license, while Samsung asked the Chinese court to provide "global FRAND rate for Ericsson’s 4G and 5G SEPs in isolation."

This, to me, looks pretty contorted. In order to "evaluate conduct" in a licensing negotiation, Judge Gilstrap will have to look at the numbers. And the fact that Ericsson asks for a superset of the determination Samsung previously sought in China doesn't mean Ericsson isn't seeking something in the U.S. that Samsung previously asked a Chinese court to do.

It's also a non sequitur to me that Samsung's Chinese action was unfair because the ex parte injunction there can only be done away with by means of a motion for reconsideration, as opposed to the U.S. mechanism under which a TRO needs to be converted into a PI within two weeks or goes away automatically. The order claims that this means a different standard, but doesn't explain whether it really does mean it's harder for Ericsson in China than it was for Samsung in Texas to achieve a different outcome. The former Chief Judge of the United States Corut of Appeals for the Federal Circuit, Randall R. Rader, had actually explained in a sworn declaration that the Chinese proceedings are fair.

Judge Gilstrap also notes a USITC complaint Samsung brought against Ericsson on January 7, 2021. Bloomberg reported on it. There's recently been a flurry of filings, mostly by Ericsson, which is presently suing Samsung over 12 patents in the Eastern District and brought a number of cases in Germany, Belgium, and the Netherlands. I'll try to find out more about all those filings and will comment on them on another occasion.

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Thursday, January 7, 2021

Stifling creativity, chilling innovation, and now even killing people: the EU needs to rethink its approach to industrial policy

With VaxGate, Brussels--as a metonym for the EU--is going through its worst credibility crisis ever, while Brexit is already a success story in one particularly important regard: the UK is outvaccinating the Continent. It's also a fact that British elite universities outperform their continental counterparts in global rankings.

Even EU-friendly mainstream media such as German newsweekly Der Spiegel now feel forced to talk about some of what's going wrong. Spiegel author Michael Sauga today criticizes the Merkel-Macron doctrine (to me, they're simply the Axis of Evil, or even the Axis of Death) that COVID vaccines be both developed and manufactured in Europe in order to become more independent from other economic regions. Just yesterday, the European Commission granted provisional approval to Moderna's mRNA-based COVID-19 vaccine, further to a recommendation by the European Medicines Agency. While Moderna's vaccine is already in use in the U.S., the EU clearly treated it as its lowest priority among the top six candidates, simply because it's an American company that didn't have much, if any, European manufacturing capacity at the time.

If I had to choose which of the vaccines to take today, and if I even had the choice, I'd presently--subject to what we'll learn throughout the year--prefer Moderna's vaccine. The only known issue with all those mRNA-based vaccines is that the risk of an anaphylactic shock is about 20-25 times higher than with conventional vaccines. I don't have any known allergies (there a few measurable ones, but so minor I don't even notice anything, such as when I eat hazelnuts), so I'm particularly unlikely to be that one person among 40,000 or 50,000 who would suffer an anaphylaxis. I'd just want to be under observation for 30+ minutes after the jab. What makes me feel better about Moderna's vaccine than Pfizer/BioNTech's is that it may be slightly more advanced. BioNTech hopes to make further progress this year to bring down the cooling requirements. With Moderna already being where BioNTech is trying to get, it's possible that Moderna's product is more mature. Both are 95% effective, though it remains to be seen how well they work against new mutations (for B.1.1.7, a gradual reduction of efficacy is possible, but for the South African mutation, it's not even clear whether the existing vaccines will work at all).

So the EU initially treated as a low priority the COVID-19 vaccine that may actually turn out to be the best of all, and has already turned out to be one of the first two to become available. For industrial policy reasons. One has to be highly unethical or simply deranged to let so many people die for some ill-conceived industrial policy.

When Merkel and Macron were just the Axis of Evil--not yet the Axis of Death--, they already did a horse trade that was unbelievably stupid: Article 13, which then became, after a renumbering, Article 17 of the EU Copyright Directive. It's still high on the EU Commission's priority list. The Merkel government primarily wanted something else: the news snippets tax. That's because German media giants had lobbied for it very hard. For France, however, upload filters were going to be the grand prize. So Merkel and Macron agreed to do both.

There's something I really, really wish to clarify here: I don't disagree that some smart regulatory approaches are needed to certain platforms that have become extremely powerful. In fact, some of what they're discussing in the EU with respect to "gatekeepers" makes a whole lot of sense, and a majority of the House of Representatives raised similar concerns. The question is, however, what will ensure a level playing field and what is just going to be negative on the bottom line, like cutting one's nose to spite one's face.

Upload filters stifle creativity. The right holders who benefit from it are collecting societies, and they are problematic in various ways. Ultimately, just like some overreaching data privacy rules, such a framework may even raise barriers to entry.

Some simple-minded, totally incompetent people came up with the idea at some point that copyright could have a redistributive effect favoring France and Europe as a whole. Of course, the collective European market share of copyrightable works found on Internet platforms used in Europe is far higher than the market share of European platform makers. So if you give copyright holders more leverage over the platforms, it means that far more money will flow in a certain direction than in the opposite one. But those Merkel-supported French idiocies, such as upload filters, are not well-thought-out. From a holistic perspective, they do more harm than good. They just please some lobbyists, and some fools.

It gets slightly more complex, but no less clear, in the automotive standard-essential patent (SEP) licensing context. In that case, there isn't even a clear French beneficiary such as copyright holders or Sanofi (which is going to get a lot of money for a vaccine research project that is otherwise a huge disappointment and failure so far). There actually would be French beneficiaries--car makers like Renault and automotive suppliers like Valeo--from the better policy alternative. But French EU fake news commissioner Thierry Breton is beholden to Nokia and Ericsson, probably just because he has a long history with them due to his own industry background (France Telecom).

Not only Europe's automotive industry but even more so the wider IoT industry would have benefited from allowing the European Commission's Directorate-General for Competition (DG COMP) to investigate Nokia's refusal to grant exhaustive component-level licenses to "all comers" from all tiers of the automotive supply chain.

The concept of "digital sovereignty" (which in this case means having European telecommunications infrastructure providers) could and should be separated from competition enforcement. Give them subsidies, or allow their national governments to do so. But don't let other industries--automotive and, more generally, IoT--suffer, especially when the vast majority of 5G patents aren't even owned by EU-based patent holders.

Ideally, industrial policy shouldn't influence antitrust enforcement. It's a reality that it often does, but if that's what you want to be the case, you at least have to think things through holistically. That doesn't appear to be a strength of people like Macron and Breton, and Merkel just follows them because she lives in an ivory tower and is detached from reality. A few years ago, she referred to the Internet as "Neuland" ("new land" or "unchartered territory"), which tells you all you need to know in this respect.

IP policy is industrial policy, but upload filters are insane. Competition enforcement should be principled, yet is often driven by industrial policy considerations, and whether you look at the merits of those complaints against Nokia or take an industrial policy perspective, the result would be the same: go after Nokia (and, by extension, Ericsson). And when it's about life or death, such as in the SARS-CoV-2 context, industrial policy almost literally kills people.

If the EU takes a smart and holistic approach to its Digital Markets Act/Digital Services Act initiative, and to competition enforcement in the app distribution context, its efforts may actually have a positive impact. But where things stand today, EU industrial policy, especially if devised by French politicians, all too often results in extremely stupid decisions. The EU can rely on many journalists failing to figure it out, or being ideologically biased and therefore unwilling to speak truth to power. In European media you find all those excuses that no one could foresee which vaccine research projects were going to be most successful when one would just have to compare the timeline of the EU's decisions (all of which are public) with the official progress reports of those projects (all of which are public, too, such as on the New York Times Coronavirus Vaccine Tracker). But ignorance, ideology, and spin-doctoring only do so much. Throughout this year, the EU's most miserable failure will become clearer and clearer. The decision makers in Brussels and their advisers will have realized by now that they've failed European citizens. Will they draw the necessary conclusions from it and do better in other areas?

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