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01.20.18

Blockchain Patents Are a Catastrophe in the Making as Trolls and Aggressors Accumulate Them

Posted in IBM, Patents at 4:12 pm by Dr. Roy Schestowitz

Related: Blockstream Has No Patents, But Pledges Not to Sue Using Patents

Marathon Patent Group: Massively Overvalued
Reference: Marathon Patent Group: Massively Overvalued

Summary: As patents pertaining to blockchains continue to be granted — even in defiance of Alice/Section 101 — it seems likely that patent wars will sooner or later erupt, involving some large banks, IBM, and patent trolls associated with the notorious Erich Spangenberg

THE emergence of digital currencies (also known as cryptocurrencies) brought rise to blockchains — a concept whose explanation ought to quickly reveal to anyone that it boils down to software and is thus not eligible for patents (except maybe in China).

There is a growing threat now; that threat isn’t FUD or “hacks” or “collapse” or whatever; patent parasites are like hawks waiting to attack digital currencies. See “Patent Strategies for Cryptocurrencies and Blockchain Technology” [PDF] and all sorts of articles from media of patent maximalists. They’re waiting to initiate something similar to and barely distinguishable from patent wars in mobile phones. Jon Calvert of ClearViewIP, for example, is quoted alongside a bunch of patent law firms. They all defend the ‘screwing’ of blockchains with a vast thicket of software patents. To quote:

The bigger tech companies, the IBMs of this world, are trying to create blockchain infrastructure that can be used by corporate enterprises or financial institutions. They want to charge for software as a service. By having patent protected technology, they can argue that theirs is the best, the most valuable, or the most valid, which makes them more credible. These are also the people who are more likely to use their patents aggressively later, when they’ve got a strong portfolio. If you look at Microsoft, they were probably filing blockchain patents almost a decade ago.

IBM’s role was noted here many times before; don’t be misled by the reformed IBM of Samuel J. Palmisano. The company has become not only a patent bully (again) but also the leading lobbyist for software patents worldwide. The other day the corporate media published an article (puff piece) titled “IBM Fueling 2018 Cloud Growth With 1900 Cloud Patents Plus Blazingly Fast AI-Optimized Chip” (emphasis on patents, which are basically software patents disguised as “cloud”). Such patents PR (and dumb new headline from Forbes) helps reveal what IBM has in its field of vision. IBM isn’t eager to transition the whole world to Bitcoin or anything remotely like that. Blockchain patents are a looming storm which trolls too wish to participate in. It was mentioned the other day by IBM and even the Linux Foundation speaks about it:

IBM and A.P. Moeller-Maersk on Tuesday announced a joint venture to create a platform based on Hyperledger Fabric 1.0, with the goal of creating huge efficiencies in the global supply chain. IBM and Maersk have teamed up to provide a more efficient method of standardizing shipping logistics using blockchain technology. “Adoption of Hyperledger Fabric by Maersk and … IBM has the potential to remake the shipping sector landscape and its use of information technology,” said Brian Behlendorf, executive director of The Linux Foundation.

In Bloomberg, on Tuesday, a less Linux-centric article was published and iophk, our reader, said that “this guarantees that blockchain advancements will occur outside the US” (that’s the effect of overpatenting). To quote Bloomberg:

Bank of America Corp. may not be willing to help customers invest in Bitcoin, but that doesn’t mean it isn’t plowing into the technology underlying the cryptocurrency.

The Charlotte, North Carolina-based lender has applied for or received at least 43 patents for blockchain, the ledger technology used for verifying and recording transactions that’s at the heart of virtual currencies. It is the largest number among major banks and technology companies, according to a study by EnvisionIP, a New York-based law firm that specializes in analyses of intellectual property.

It’s all about patents; The Linux Foundation plays along because its initiative, Hyperledger, is IBM-led. It always was, right from the start. The Linux Foundation merely acts as a sort of incubator pulling together contributions and helping the openwash.

As it turns out, based on another announcement, another patent aggressor (connected to Erich Spangenberg) positions itself to attack blockchains with patents. To quote:

Marathon Patent Group, Inc. (MARA), today announced that it has entered into a purchase agreement to acquire four patents related to the transmission and exchange of cryptocurrencies between buyers and sellers.

This might be another front for the likes of Spangenberg, whose latest venture was advertised a couple of times in corporate media (CNBC).

The details above may seem vague; that is because those who apply for or harvest blockchain patents (stockpiling) intentionally thrive in mystique/ambiguities. Patents like these don’t exist for ‘defensive’ purposes; someone is planning to at least try to make a lot of money using these patents alone (without an actual implementation of anything).

Qualcomm/Broadcom/NXP Combination Would Become a Disastrous Patent Thicket Which Benefits Nobody

Posted in America, Antitrust, Asia, Europe, Hardware, Patents at 3:20 pm by Dr. Roy Schestowitz

Monopoly power merely harms the entire market where resources (e.g. pipes) cannot be shared

Monopoly power

Summary: Worried by the prospect of mega-mergers and takeovers which would put far too much market power (and monopoly through patents) in one place, governments and corporations speak out

THE CHIPSET/SILICON giants are becoming fewer and bigger. This means that centralisation of respective patents (with patent thickets which prevent fair competition) carries on. This is further exacerbated by some recent industry moves.

“As promoter of software patents and a patent bully with a long track record, Qualcomm wants an even broader or thicker patent thicket.”China, for a change, is standing up to evil patent bullies like Broadcom and Qualcomm; this was soon spun by IAM, which noted that “[w]hen Broadcom first went public with its audacious plan to buy-out Qualcomm, Microsoft and Google were reportedly among the first tech titans to object to the deal in private, citing concerns about a potential loss of innovation.”

Qualcomm has little to do with innovation; it’s all about taxation. As promoter of software patents and a patent bully with a long track record, Qualcomm wants an even broader or thicker patent thicket. According to Korean media, the “trade watchdog sets conditions for Qualcomm’s NXP takeover” — another takeover possibly in the making. To quote:

South Korea’s corporate watchdog said Thursday that United States-based chipmaker Qualcomm must make several commitments to get approval for its takeover of the global Dutch company NXP here, including the sale of NXP’s standard essential patents.

Qualcomm is infesting and driving up the price of almost everything. As noted the other day in relation to the above, “Qualcomm agreed to exclude certain near-field communication patents from the transaction and committed to allowing NXP to license those patents to third parties.”

“Qualcomm is infesting and driving up the price of almost everything.”The European Commission wrote about it as well some days ago. The opening of its statement sounded similar to Korea’s. To quote: “The European Commission has approved under the EU Merger Regulation the proposed acquisition of NXP, based in the Netherlands, by Qualcomm of the US. The approval is conditional on full compliance with commitments offered by Qualcomm. Both firms are important players in the semiconductor industry.”

Going back to Broadcom, it turns out that it’s being investigated by the FTC right now. As Wall Street media put it the other day:

The Federal Trade Commission is investigating whether semiconductor company Broadcom Ltd. engaged in anticompetitive tactics in negotiations with customers, people familiar with the matter said.

Recently we covered Broadcom in relation to a patent case at the Court of Appeals for the Federal Circuit (CAFC). The case arose from an appeal to PTAB and was mentioned in this “international report” at IAM a few days ago. It all started when “Broadcom filed an inter partes review petition which sought to review [patents of] Wi-Fi One,” as we covered at the time (we first took note of this feud about a year ago).

“In this particular case what we have is PTAB in the role of protecting the larger entity; it may sound bad on the surface, but if the underlying patent/s is/are not eligible, then it’s beneficial for justice and detrimental primarily to trolls.”All these latest articles about Wi-Fi One, LLC v Broadcom Corp. concern time-bar decisions. As one law firm has just put it: “While the Wi-Fi One decision is confined to the reviewability of the time bar under § 315(b), some believe that its rationale may extend to the reviewability of other issues. It remains to be seen how far the court will extend its reasoning, if at all, but we will keep you updated here on the AIA Blog when the court issues significant decisions.”

In this particular case what we have is PTAB in the role of protecting the larger entity; it may sound bad on the surface, but if the underlying patent/s is/are not eligible, then it’s beneficial for justice and detrimental primarily to trolls.

Patent Litigation in East Asia: Huawei, Samsung, HTC, Nintendo and COLOPL

Posted in Asia, Patents, Samsung at 2:43 pm by Dr. Roy Schestowitz

A street

Summary: A quick look at some high-profile cases in which large Asian firms are embroiled; it seems clear that litigation activities have shifted eastwards (where actual production is done)

THE patent trolls are down for the count in the US. Litigation is down, especially in their favourite venue (where cases fell by more than half). This impacts not only trolls but any company which relies mostly/only on litigation rather than production.

The media which cheers for patent trolls (usually funded by patent trolls too) has begun looking eastwards. Sometimes it’s even moving eastwards and hiring there. They attempt to adapt in order to survive.

Watchtroll, as usual, tries to malign defendants; in this one post it claims that Samsung was — in the context of the Chinese legal system — “Maliciously Delaying Negotiations”. We wrote about this earlier this month and did not see such an accusation. “Observers believe a case in which Samsung was found to infringe Huawei’s SEP patents is helpful in determining what is misconduct in FRAND negotiations and a sign the Chinese judicial system is resolving increasingly more complicated and new IP disputes,” Karry Lai wrote from Hong Kong (for Managing IP). Well, FRAND itself can be viewed as a form of “misconduct” or at least injustice. Perhaps Samsung has a legitimate explanation/side/role in this story.

Staying around Asia (although in US courts such as CAFC), in Taiwan we have HTC coming under attack again (from a rather obscure entity called Advanced Video Technologies). In the words of Patent Docs:

One of the most important (if not the most important) inquiries in performing due diligence involving acquisition of a patent portfolio is ensuring that the entity asserting ownership of the patents actually has proper title (in what can be a complex chain, starting with the inventors). This is particularly true in view of the position taken by the Federal Circuit that even one inventor, who has not assigned her rights, can prevent the other inventors or their assignee from bringing suit as being an indispensible party, and that the Federal Rules of Civil Procedure do not permit that recalcitrant inventor from being involuntarily joined. The failure to make sure that the chain of title was intact led a district court to grant defendants’ motion to dismiss, in Advanced Video Technologies LLC v HTC Corp., a decision the Federal Circuit affirmed last week.

All these sorts of ‘nuisance’ lawsuits have over time shifted to Asia, especially China and Singapore. As for Japan? Or Korea? They aren’t quite as overzealous with their patent laws.

Further north (to Taiwan) and over in Japan, the main English-speaking media is adoring patents again. In reality, it’s their products (e.g. cars) and not their patents which make the Japanese prosper. But to IAM writers this misleading report is an adrenaline rush. Several patent maximalists link to it and this one says: “Impressive numbers, but usual caveat applies: most of these royalties are being paid from overseas subsidiaries to their parent companies in Japan, especially in the auto sector…”

IAM’s Jacob Schindler said that and he also said that “Nintendo’s first patent assertion in Japan sends rival’s share price plummeting,” reminding us of this lawsuit which might end up destroying a small company (using patents alone). To quote:

On January 10 2017, a Japanese mobile game company COLOPL announced that it got sued by Nintendo for patent infringement. Nintendo seeks JPY 4.4 billion (approximately $40 million) in damages and an injunction to stop operation of “Shiro Neko (White Cat) project” which is COLOPL’s most profitable smartphone game. Nintendo reportedly filed a lawsuit at Tokyo District Court on December 22 2017 after the negotiation for over a year since September 2016. This is the first time Nintendo has filed a patent infringement lawsuit in Japan. Nintendo alleges the COLOPL’s game infringes on Nintendo’s 5 patents relating to touch panel operation and other technologies.

We wrote about it last week. It’s not about software, but it puts in jeopardy a legitimate business.

Patent Litigation in the US is Down Sharply and Patent Trolls’ Demise Has Much to Do With It

Posted in America, Patents at 1:31 pm by Dr. Roy Schestowitz

Summary: Docket Navigator and Lex Machina both show a significant decline in litigation — a trend which is likely to carry on now that TC Heartland is in tact (not for just half a year but a whole year) and PTAB completes another record year

THE TREND is undeniable. The numbers speak for themselves. The sample set is large enough (thousands), it is complete, and several independent trackers are showing the same thing (independently).

Patents were not designed for litigation, which is merely a last resort. So decline in litigation may be bad news for patent lawyers, but not necessarily for inventors.

Michael Loney, in his latest roundup (primarily shut behind a paywall), shows that patent litigation is in its lowest level in recent history (in the US). It’s the same thing other data sources show. “Managing IP,” he wrote, “analyses 2017 data pulled from Docket Navigator to reveal: the overall patent cases filed in US district courts by half, quarter and month; the top 50 plaintiffs, defendants and law firms; and the breakdown of filing by district overall and pre- and post-TC Heartland” (which we've just mentioned and also mentioned several times last year in relation to cases in the Eastern District of Texas collapsing post-TC Heartland).

“Last year,” Loney continued, “4,522 patent cases were filed in US district courts, according to a search of the Docket Navigator database conducted by Managing IP on January 7.”

So patent litigation (the lawsuits ‘industry’) in the US continues to perish. Scientists can sigh in relief.

Similar data comes from Lex Machina. It wrote the following summary:

In the final quarter of 2017, a total of 981 patent cases were filed in U.S. District Courts, a 1.3% decrease over the previous quarter’s total of 994 cases. Cases filed in the calendar year 2017 (4,057 cases) represent a decline of 10.3% over 2016 (with 4,529 cases).

Much of it was from patent trolls — a ‘sector’ which is declining (all it ever does is threats and litigation, nothing else).

WiLANThe decline is of course good news. Unless one is in the business of litigation. On the face of it, Canadian patent bully WiLAN is looking ahead at more bullying — something it typically does down south (in the US). As IAM put it some days ago:

WiLAN, now part of the Quarterhill family of companies, kicked off 2018 with two patent deals with major Asian operating companies, TSMC and Panasonic. On January 8th, the NPE announced its wholly-owned subsidiary Cetus Technologies had acquired patents related to DRAM technology, as well as NAND flash memory, from Panasonic. The announcement was made four days after another deal with TSMC, which the company hailed as a “new type of transaction”.

Now that it targets “major Asian operating companies” (IAM’s term for non-trolls and actual producers) it may be a good time to start our next post, which focuses on Asia. A lot of patent trolling activity has shifted towards there.

Cheating the US Patent System is a Lot Harder After TC Heartland

Posted in America, Patents at 12:39 pm by Dr. Roy Schestowitz

Some gambling dice

Summary: Some new examples of tricks (and sometimes cheats) attempted by patent claimants and their representatives; it does not go as well as they hoped

THE level of mischief at the USPTO is occasionally noted here; it’s typically about law firms and patent trolls who are attempting to game the system.

Over the past week we have gathered numerous new examples. We don’t mean to bash the USPTO (we are actually very encouraged to see its improvements in recent years) but merely to take stock of areas of improvement for the patent system (including courts and law firms).

TC Heartland or another case of Cray are often mentioned in relation to venue shifting or forum shopping or whatever one calls it (it’s about filing one’s patent lawsuit in a district which is perceived to be plaintiff-friendly, troll-friendly, or friendly towards particular types of patents).

Many lawyers are patently just liars (what they’re paid for) and would lie about where businesses are based. Some days ago we saw this docket report about a case in which claimed “damages” are insubstantial:

The court denied plaintiff’s motion for a preliminary injunction to preclude the sales of the accused fracking system because plaintiff failed to establish irreparable harm through loss of market share or reputation.

More interesting, however, was this docket report. It’s a case in which venue shifting is attempted. “The court granted defendant’s alternative motion to transfer for improper venue because defendant did not have a regular and established place of business through its provision of equipment to customers in the district,” it says. Rightly so. Is this another TC Heartland-type case (only at a far lower court)?

A story which received a lot more attention concerned the filing date and this docket report explained it as follows:

The court granted defendant’s motion to dismiss all but three of plaintiff’s patent infringement claims for claim preclusion, including claims for a patent that issued after the filing date of the parties’ earlier lawsuit.

Another failed attempt to cheat the patent system and assert patents which were not even granted (yet)? Mr. Hricik, which covers ethical issues in patent law, wrote about it as well:

Normally, claim preclusion only bars later assertion of a claim only if (a) the plaintiff could have brought that claim when it filed an earlier suit and (b) the later-asserted claim is the “same” as a claim in the first case (courts take different approaches to how closely related the later claim must be to the first, but the federal rule is to look at whether the later-asserted claim arises out of the same operative facts as the earlier claim). So, normally, if a patent issues to the plaintiff after the first suit is filed, claim preclusion wouldn’t apply because of the first step: you can’t sue for infringement until the patent issues (with the narrow exception of seeking “provisional damages” for infringement under Section 154).

Hricik previously wrote about patent ‘scams’ wherein one party used non-existent patents to bully someone else. Trolls tend to do so too; sometimes, there’s a similar issue pertaining to assignment (parties claiming to ‘own’ patents which they don’t). One new example was covered a short while ago by Sean D. Damon (Finnegan) and also by Watchtroll.

Any time law firms pull dirty tricks such as these they merely discredit the very system they rely on. It’s a form of mockery, not just misuse. They ought to collectively refrain from doing that because they spit in the very well they drink from.

RPX Might Soon be Owned by Patent Troll Erich Spangenberg

Posted in America, Microsoft, Patents at 11:10 am by Dr. Roy Schestowitz

RPXSummary: RPX, whose top executives are leaving and business is gradually dying, might end up as another ‘asset’ of patent trolls

TECHRIGHTS has been writing many articles about RPX, which marketed itself as “against trolls” even though its members were often troll feeders.

Last night IAM was exited to say that a patent troll might buy RPX; “Big news on RPX,” IAM said, “management talking to interested parties in early stages of process that could lead to sale. Microsoft opts not to renew membership #IP #patents…”

We wrote about Microsoft joining RPX a very long time ago and now it exits. From IAM’s blog post about it: (obviously not mentioning the “T” word)

The management of RPX is meeting with a number of interested parties in a process that might lead to an eventual sale of the business, IAM understands. It is believed that an investment consortium led by IP monetisation specialist Erich Spangenberg is among those eyeing the defensive aggregator. Others to have been linked with a possible deal include Vector Capital, the private equity fund that owns IPValue and arguably knows the space as well as any buyout shop. It’s not clear if former CEO John Amster is involved in the process (he, Vector and Erich Spangenberg declined to comment for this article). RPX is being advised by GCA, which bills itself as an independent investment bank focused on the growth sectors of the global economy.

If RPX ends up in the hands of these notorious patent trolls, IAM will love it even more. IAM is, after all, the loudest proponent of trolls (along with Watchtroll) bar trolls themselves. IAM is their platform of choice. Years ago we took note of MOSAID/Conversant (classic patent troll) paying IAM and yesterday IAM produced an ‘article’ which basically amplifies Conversant (Boris Teksler). IAM now speaks to literal patent trolls for their advice on patent tax. From the blog post:

In order to find out, Lew Zaretzki of Hamilton IPV, and Conversant CEO Boris Teksler delved into the decisions handed down by the High Court in London and the US Central District of California Court, in combination with looking at the Court of Justice of the European Union’s 2015 decision in Huawei v ZTE and the approach to SEP/FRAND issues employed by the Chinese authorities and courts.

For those who wonder why we keep linking to sites like Watchtroll and IAM, well… we think it’s important to keep abreast of what patent trolls are up to and what better source of leads than the trolls’ proponents themselves. We may not share their views, but we certainly need to know what they’re up to.

Patent Quality (Not Numbers) as an Asset: Oppositions, Appeals and Rejections at the EPO

Posted in Europe, Patents at 9:18 am by Dr. Roy Schestowitz

If patent information is the goal, then overload is a threat

Information overload
Reference: Information overload

Summary: Benoît Battistelli wants a rubber-stamping operation (like INPI) rather than a functional patent office, but oppositions at the Office prove to be fruitful and many erroneously-granted patents are — by extrapolation — already being revoked (affecting, in retrospect, Battistelli’s so-called ‘results’)

THIS WEEK has been historic at the EPO not because of scandals or conflicts but because of a decision we covered here several times*. It was a major blow to patent maximalists.

The patent microcosm never really cared about patent quality; the quality of patents has little to do with the business model. All they care about, based on this upcoming event (advertised yesterday), is how to double the number of patents by throwing the same texts at multiple piles of applications at multiple offices. “EPO and USPTO approaches to rejections” is one among the topics covered. As we pointed out here before, the USPTO barely tolerates patents on genetics. There are few ultra-wealthy companies aspiring to ‘own’ everything, including life itself (Monsanto/Bayer for example) and they crush ordinary people, such as farmers, in the process.

The EPO has lost touch; The discrimination against SMEs at the EPO is not accidental but a planned/intentional policy. According to this, the EPO keeps lying about — and supposedly ‘on behalf of’ — SMEs. Where does that end? Even EPO staff is being crushed nowadays. Nobody is being served but billionaires.

“Even EPO staff is being crushed nowadays. Nobody is being served but billionaires.”“Are you a #patent professional? Here’s an interesting opportunity,” the EPO wrote yesterday, linking to this promotion of internships (warning: epo.org link). The EPO “races to the bottom of salaries and assurance to staff,” I told them, “thus ensuring longterm brain drain. Interns are low-paid staff with no assurance of work. Is this the future of the EPO under Battistelli ‘reforms’? Remember that starting January 1st (2018) all EPO examiners lost their permanent contracts, reducing work security for docility. Terrible.”

The EPO’s official account “follows” me in Twitter. Sometimes I think some good people are behind it, but in order to pay the mortgage they need to obey the high-level management, knowing that they too can suffer (along with their families) if they don’t play along.

Watch what they posted yesterday: Distraction from real EPO news (about CRISPR). Instead they share Battistelli’s photo op in which there’s promotion of software patents in Europe. The EPO basically republished its ‘news’ about “computer implemented inventions”; pushing the unthinkable again? To quote the original (warning: epo.org link): “Other topics discussed during the meeting included procedural changes at the EPO and recent case law, standard essential patents, the EPO’s approach to computer implemented inventions, and IP activities in the Internet of Things era.”

The “CII” dodge aside (that’s what they call software patents in Europe), there’s also that buzzword, “Internet of Things”, once again; that too is a modern trick for sneaking software patents past examiners.

Battistelli’s EPO is stretching patent scope further and further, but the opposition to a CRISPR patent showed that some staff is managing to do the right thing and end this injustice. This is still circulating in technical media and European media. “The vast majority of the Broad Institute’s CRISPR patents in Europe are also affected by this same deficiency and we expect them to meet a similar fate,” ERS CEO Eric Rhodes said. It’s the likely end of CRISPR patents in Europe though the matter is likely to reach the Enlarged Board of Appeals. To quote:

CRISPR/Cas9 has been hailed as the ‘scientific discovery of the century’ due to its capacity to modify the genome for the treatment of genetic diseases. The Broad Institute, set up by MIT and Harvard in 2004 to use genomics to improve human health, successfully obtained a patent from the US Patent Office for its use in eukaryotes. However, the European Patent Office (EPO) has revoked the first of several patents obtained by the Broad Institute, citing a clear lack of novelty.

The editor of JUVE, linking to his article (in German), wrote: “The recent decision of @EPOorg could be a blueprint for the other 6 oppositions against Broad’s CRISPR patents. According to source the Marraffini problem is an issue in all 7 patents.”

Alexander Esslinger replied: “To my knowledge all these patents are based on the same PCT application and therefore share the priority problem [] Faint hope for Broad. In my view only a decision of the Enlarged BoA could help the patent proprieror” (the oppositions division did the right thing to deny patents on CRISPR).

The profound effect of this decision on those who attempt to monopolise life itself can be witnessed in this report from yesterday.

Battistelli has only 5 months left at the Office, so it’s likely that an appeal will occur/take place under the leadership of Campinos.

“Campinos, a Portuguese national, was elected in October as the new EPO president,” says this new article, but he is French actually (dual), just like Benoît Battistelli and Alain Pompidou (a reasonably OK EPO President, according to sources of ours).

Here is what IP Watch wrote yesterday:

Outgoing European Patent Office (EPO) President Benoît Battistelli was elected Chairman of the University of Strasbourg Center for International Intellectual Property Studies Administrative Board in November for a three-year term. He succeeds António Campinos, Executive Director of the European Union Intellectual Property Office.

Campinos, a Portuguese national, was elected in October as the new EPO president for a five-year term starting on 1 July 2018.

Things can only improve from there, or so hope EPO insiders. The goal of everyone — ours included — is to fix the EPO. Patent quality is a big part of that.
______
* In 4 prior articles (on Wednesday [1, 2], Thursday and Friday) we got one important detail wrong; what we got wrong is that not BoA but the Oppositions (i.e. the Office) made the decision. We apologise for this error. We often assume that very few blogs are covering EPO from a technology perspective (unlike legal ‘industry’ perspective) because the structure of the Organisation is confusing (some units are just numbers and that too changes over the years/decades).

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