Leveraging global collaborations to grow early-stage IP commercialisation

Early-stage IP-based collaborationscan help small start-ups to expandglobally and feed the innovationpipelines of larger companies. Itis all about building relationshipsand trust, and keeping the lines ofcommunication open

IP-based early-stage commercialisation is escalating globally. At one level, this is the result of an ongoing shift in academic and private ventures sourcing collaborations in order to continue developing and creating value. Often these relationships serve to move the development of technology and products closer to an attractive exit position. In addition, early-stage collaborations with large, established companies serve to ameliorate risk by providing protection in the event of IP litigation and validation for attracting other financial investment and additional strategic collaborations. Emerging ventures are building cross-border collaborations across the world – with greater need in developing and less developed countries – in order to ensure that there is expertise, development capacity and market access to justify the development of IP-based products and services. Further, relationships with large companies provide access to advanced manufacturing, quality assurance and regulatory compliance, sales and distribution, and the guidance of experienced senior management.

At the same time, many large companies are seeking to expand their corporate innovation from outside IP sources, including early-stage commercialisation. These companies are sourcing innovation through collaborations and leveraging their corporate capabilities, financing and infrastructure to increase corporate expansion and product-line extensions. Many medium-sized and large companies are making early-stage collaborations an objective of their corporate strategy, with key professionals being made responsible for sourcing, evaluating and developing these relationships. At times the incentive for these collaborations is to utilise excess capacity or to identify key ways of filling gaps in a corporation’s capacity from a development capability. Often collaborations are used to develop new products to fill the company pipeline with a relationship based on the developed product(s). Sometimes, the initial relationship even leads to the acquisition of the company.

IAM is the Official Strategic Media Partner of the Licensing Executives Society (USA & Canada), Inc (LES). As part of this wide-ranging cooperation agreement, both parties work together to provide thought leadership relating to the strategic creation of value from intellectual property. With this in mind, every issue of IAM will feature an exclusive article written by an LES member or members that focuses on an IP value creation issue. The content and authorship of the article is always agreed in advance with the IAM editorial team and is subject to the same editing process as all other articles published in the magazine. The views and opinions expressed herein are those of the contributing authors and do not necessarily reflect the views of LES or any other entity with which the authors or their employers, affiliates, partners, members or employees are affiliated.

Some distinctions emerged in my conversations with the panellists for this article, as well as with a number of other key professionals responsible for corporate collaborations. One is that collaborations with early-stage ventures vary based on the industry and the stage of development.

I have assembled a panel of experts to provide different perspectives on some of the key considerations involved when collaborating with early-stage commercialisation partners, and to discuss the global outreach that is helping to accelerate this trend. My panel includes attorney, best-selling author and entrepreneur Michael Lechter; Omer Hiziroglu, general manager at Inovent; Mark Wilson, director of collaboration management in the pharmaceutical development division of GlaxoSmithKline (GSK); and Janet Scholz, an independent intellectual asset management and technology transfer consultant.


Michael Lechter, CEO, TechPress

“In less developed countries a management presence may be desirable for a variety of reasons or local law may dictate a particular type of structure”

How do you identify collaborators that add value and establish an effective relationship?

Michael Lechter (ML): I am responding from the perspective of a small venture seeking to establish a collaboration with a large company. The process that a venture uses to identify potential collaborators depends on a number of factors: the particular resources that the venture is seeking, the anticipated nature of the collaboration, historical relationships and the venture’s network in the relevant sectors. In general, a small venture looks at the capacity of the larger company to provide the necessary resources, its history with respect to similar collaborations and its flexibility with respect to the particulars of a collaboration, as well as its willingness to negotiate. Of course, the ability of the small venture to get a meaningful audience with the large company can be an overriding factor. This is where good networks come into play.

Omer Hiziroglu (OH): To us, a good collaborator must be able to fill a gap – be it a certain skill set, contacts or access to a market that we do not have the resources to manage in-house. Given the dynamic nature and fast pace of early-stage IP commercialisation activities, our collaborators should be able to identify their ‘value add’ at the offset rather than as a result of a collaborative effort to identify possible synergies. Collaborations that take a great deal of time to set up present an important opportunity cost when working in an early-stage environment with somewhat limited resources. Ideally, a good collaboration starts with a simple and concrete project that will hopefully lead to a greater relationship as parties understand each other and build a rapport based on mutual interest and trust.

Mark Wilson (MW): The basis of interaction is always the fundamental technology or science, and I think that observation is broadly true across the life sciences sector, so it is typical that only one or two alternatives are under consideration. Naturally, with limited alternatives, this can complicate negotiations, but it has to be the scientific offering or capability that drives the interaction. Clearly, though, we are all human, and it helps to have familiar counterparties (whether companies or individuals) with whom to contemplate working collaboratively. Few things are developed quickly in life sciences – whether platform technologies or compound assets – so it is important to feel that a genuinely collaborative arrangement is possible.


Janet Scholz (JS): I begin by using as many resources as I can find, starting with my personal network. Any effective relationship or collaboration is all about who you know. If you do not know someone, there is somebody who will. Your network can also include organisations. For example, I travel everywhere with my membership directories for the Licensing Executives Society (LES) and the Association of University Technology Managers (AUTM), as these are people whom I know and can trust. Government agencies, academic research organisations and their related commercialisation entities are also extremely useful.

Related to intellectual property, how do you determine what, when and how much to share (confidential versus non-confidential) to establish an initial relationship?

ML: It depends on what is necessary for the relationship. In some cases, an exchange of confidential information is required as a practical matter before the respective entities can determine whether a collaboration would be productive. For example, a collaboration might make sense only if the technology of one party is compatible with the processes and equipment of the other. This will necessitate an exchange of confidential information regarding technology and processes. In other cases, depending on the nature of the collaboration and the roles of the parties, any exchange of confidential information can be delayed until well after the collaboration has been either initiated or ruled out altogether.

Another factor is the nature of the confidentiality agreement established by potential collaborators. For example, from the perspective of the party concerned with protecting confidential information, a confidentiality agreement that stresses administrative convenience (eg, arbitrary term limits on the obligation of confidentiality or stringent logistical requirements regarding the identification of confidential information) over practical protection of the confidential information is problematic. If a potential collaborator insists on that type of agreement, communications must be carefully controlled and may have to be sanitised of any potentially significant confidential information.

OH: It truly depends on the nature of the intellectual property, the expected result and the identification of the potential collaborator. In an international setting, we will also consider applicable local laws as to whether we are familiar and comfortable with the legal system. As speed is often important, we will typically be more open and less formal in sharing confidential information if we have worked with that particular party in the past. Ideally, we like to engage a potential collaborator as openly as possible and without burdening the process with too much bureaucracy and legal documents. As we tend to collaborate quite often with universities, we can usually refer to a past collaboration as an indicator and can then be more open with regard to our sensitive information. We will, however, be more formal with potential corporate partners, regardless of their size or reputation, and quite cautious in sharing confidential information when it comes to individuals with no relation to a legal entity on which we can conduct basic due diligence. With regard to our start-up portfolio and in connecting with investors, we tend to be quite open with our intellectual property, as at that stage most of our confidential information tends to be business information which we would not typically disclose at the early stages of a pending relationship.

MW: In practice, I do not feel that this is a major issue. I should explain that much of my work at GSK relates to platform technologies – it is possible that colleagues in compound licensing may have different views – but I think that it is usually possible to state what can be done adequately in order to allow a party to decide whether to enter into confidential discussions and then to understand how it is accomplished once a confidentiality agreement has been signed. However, I acknowledge that the pharmaceutical and biosciences sector may be more used to initiating confidential discussions at an early stage as a matter of standard practice than other sectors. Clearly, it is important to consider what information needs to be shared and to limit the transfer of this to what is necessary to achieve the aims, in any given situation.

JS: In any initial relationship I would share only non-confidential information because you are just starting and trying to determine whether you want to take next steps together. That said, non-confidential does not mean that the information provided can be vague generalities. It should still be highly detailed and relevant to the technology.


Omer Hiziroglu, general manager, Inovent

“A good collaborator must be able to fill a gap – be it a certain skill set, contacts or access to a market”

What are the priorities for partnership (IP status, stage of development, level of investment)?

ML: From the perspective of a small entity, priorities are driven by the situation. What resources does the venture need? How critical are those resources? What is the nature of the collaboration? What type of confidentiality agreement can be put in place? What is the venture’s long-term exit plan? What consideration must be provided to the collaborator? Is there a near-term event that could significantly increase the venture’s pre-collaboration valuation?

OH: Our company has two main activity areas. We manage an IP portfolio for licensing, thus operating like a technology-transfer office; and we manage our start-up portfolio, where we operate more like an early-stage venture capital firm. Thus, depending on the contemplated partnership, our priorities will be different based on the different dynamics and objectives in play. However, in either case once we have identified the particular need of the underlying subject matter, we will focus on potential partners whose competencies address our particular priorities.

MW: Broadly, GSK expects any potential partner to have a strong IP position; it becomes hard to enter into an arrangement in a business that revolves to some degree around intellectual property without the counterparty having a reasonable patent position. While it may be possible to license technologies based on know-how, I consider this to be unusual in the industry. If the fundamental science is attractive, then other elements of a deal come into play. Naturally, large pharmaceutical companies have a broad range of collaboration interests, which leads to a wide variety of deal structures.

JS: Yes, status, stage of development, level of investment are all important; but it is also critical that there be a good scientific, business and market fit.

Maintaining a two-way regular, open and honest communication is critical. It is a marriage and requires much time, understanding and respect for one another

What due diligence do you do to ensure that there is a potential fit?

ML: As much as is feasible under the circumstances. The nature of the due diligence depends on the nature of the collaboration and the respective roles and contributions of the parties.

OH: Ideally, and at the beginning, we have access to references for our potential partner in order to conduct a preliminary in-house evaluation. As the specific action items of the anticipated partnership are established, we try to evaluate our potential partner’s competences in each of the action items to be worked on. This is also important in order to determine areas of weakness to see whether the synergy is there or whether other parties should be added to the relationship. In any event, when in doubt, we rely on our network and check references and the reputation of our potential partners by contacting LES members who may have experiences to share.

MW: The level of due diligence that is conducted varies greatly, depending on the type of deal. Many of the technology development arrangements that I have been involved in are ones where I will personally look after the arrangement through its lifecycle. This creates a strong personal incentive to work to assess the counterparty, as I am likely to be responsible for dealing with issues that arise later in the life of the collaboration. In compound deals, most pharmaceutical companies appoint an alliance manager, who is not the lead transaction negotiator, so that a break is drawn between deal negotiation and ongoing management. As a general principle, I think that you need to look forward consciously and envisage how the situation could change for both companies (and what strains might emerge), and consider how well you feel that relationship would bear up to the strains of working through a long-term arrangement. As a representative of a larger company, it can feel awkward to suggest to the CEO of a small technology company that his or her business strategy might change radically within a few years. However, it is usually worth the effort of raising some of these questions at the outset. In the technology development space, GSK has worked over many years to develop a set of novel technologies, such as the liquid dispensing technology that allows dose verification on every tablet manufactured, rather than relying on a batch passing on a statistical basis. This revolutionary ability to manufacture at a batch size of one tablet has been the product of many collaborations – many of which lasted several years. A great deal of work to understand what factors might affect the other party over time has helped to set these collaborations on a sound basis.

JS: You try to understand more of the technical and corporate strategies and capabilities to see whether they are a good match for the company. Are the scientific directors compatible? I also use a variety of online resources and the primary perspective of experts within my own network and those of trusted government agencies.


Mark Wilson, director of collaboration management, platform technology and science, GlaxoSmithKline

“It is important to consider what information needs to be shared and to limit the transfer of this to what is necessary”

What do you consider to be important after establishing collaborations to ensure full operational success?

ML: Clear mutual understanding of the roles, obligations and rights of the parties is critical in collaborations, as are clear channels of communication. Each collaborator must understand the other’s needs and expectations.

OH: There is a corporate, as well as a human, element to creating a success story. Transparency with regard to the subject matter and progress of the partnership, reliability and swift communications and feedback are key and usually point to a solid corporate culture of doing business. With regard to the human element, once personal trust has developed around the professional relationship and personality fit, we have observed that some of the road blocks can be addressed on a personal level and any problems resolved much more efficiently.


MW: It is important that each party is clear on what the other hopes to achieve from the arrangement at the outset and that they continue to evaluate the situation as it changes and evolves. It is important to look consciously – to worry, if you will – about emerging strains and issues, and to raise these matters while they are still small difficulties which can be dealt with effectively. Personnel changes can cause major disruption, so both parties should recheck and reset the collaboration every time that there is a major change of this type.

JS: Maintaining a two-way regular, open and honest communication is critical. It is a marriage and requires much time, understanding and respect for one another.

What are your geographic preference considerations for early-stage collaborations in developed, developing and less developed countries?

ML: The substantive laws of a particular jurisdiction and the practical ability to enforce rights in that jurisdiction are always a consideration.

OH: We do not have a particular preference. We follow a more opportunistic approach by going where we can find the right partner rather than trying to find the right partner in a particular location. However, our particular needs and the opportunities we pursue tend to lead us to developed and developing countries. If we have past experiences and/or knowledge of the business environment and applicable laws there, we feel much more comfortable. For the past couple of years, we have carried out a lot of collaborations in Singapore, with IPI in particular, as the value proposal of the relationship for both parties was clearly established early on.

MW: While I think that there tends to be a geographical clustering effect around those locations where a firm conducts most of its business, major pharmaceutical companies look for the best technology or science that is available globally. Given the level of investment that the industry undertakes, I think that it would be unwise to operate in any other fashion.

JS: The business climate and the standard of procedure are important to understand in any country in which you plan to work. For example, in countries such as China it is often important to work with intermediaries in order to understand how best to present IP-based opportunities and how to approach potential collaborators correctly. In a less developed country there is a whole new set of circumstances, with a lot depending on government support and the infrastructure that is already in place for enabling and providing assurance for these collaborations. Patience, diligence and commitment are all required.

Introducing the participants

The panellists joining Gary Keller in this issue’s roundtable discussion are as follows:

  • Michael A Lechter is CEO of TechPress Inc, a publishing and literary agency company; CEO of Michael Lechter PC; managing member of Cherry Creek Lodge, LLC and Tilting H Ranch, LLC; and adjunct professor on the entrepreneurial programme at the Ira A Fulton School of Engineering at Arizona State University. Mr Lechter is also the bestselling author of OPM, Other People’s Money, How to Attract Other People’s Money for Your Investments – The Ultimate Leverage; Protecting Your #1 Asset, Creating Fortunes from Your Ideas and Technology Entrepreneurship. He is a longstanding member of LES (USA & Canada), Inc and LES International (LESI). Over the years, he has served as an LES trustee and a LESI international delegate, and has chaired a number of LES (USA & Canada) and LESI committees. He is presently counsel to the LESI board.
  • Omer Hiziroglu CLP joined Inovent in 2006 as technology transfer director and general counsel. He has been the company’s general manager since 2012. Before joining Inovent, Mr Hiziroglu practised law as an IP attorney at Bose Corporation. He is currently an executive IP adviser to Sabanci University, Istanbul, Turkey and is an adjunct faculty member at Yeditepe University Law School (Istanbul) teaching international IP courses. He is a member of the bars of the state of New York, the Commonwealth of Massachusetts and Istanbul (Turkey). He is vice president and a member of the board of directors of LESI and a past president of LES Turkey. He is also a founding member of the Galata Business Angels Network. Mr Hiziroglu has a BA in economics and international relations from Tufts University, an LLM from the University of Lausanne, Switzerland, a JD from Suffolk University Law School, Boston and an LLB from Dokuz Eylül University, Turkey.
  • Mark Wilson is director of collaboration management, platform technology and science at GSK and a member of the team at SR One – GSK’s wholly owned corporate venture capital group. He is responsible for establishing new spin-out ventures and licensing arrangements, in order to allow GSK to generate value from its substantial technology base. He has a broad background in pre-clinical drug development, drug delivery and manufacturing, has led a number of pioneering technology initiatives and has worked extensively on broad technology strategy in GSK. He has 15 years’ experience in licensing, alliance management and business development, and has been involved in over 100 commercial transactions and pre-clinical and clinical stage alliances. He originally trained as an engineer and holds a master’s and a doctorate in chemical engineering from the University of Leeds, in addition to an MBA from Columbia University and London Business School.
  • Janet Scholz is an acknowledged leader with more than 30 years’ experience in intellectual asset management and technology transfer, including successfully licensing technologies in all fields, start-up business development and strategic planning. She has not only built and managed a thriving university technology transfer office, but has also competed successfully for national and international grants and contracts related to regional and national professional networks, international development and intellectual asset management.Ms Scholz has significant experience in training and mentoring technology managers, undertaking strategic planning, transactional and policy work in the technology transfer field, and identifying and assisting in the development of start-up companies from academic-based research. She is also well versed in identifying and securing pre-seed and seed investment, as well as disseminating and promoting opportunities for research with industry and promoting university/industry programmes from the Federal Granting Councils and other agencies with institutional and industry partners. Her current focus is on diversifying traditional research relationships with local, regional, national and international business, industry and government organisations. She is a past president of AUTM and the first from outside the United States. As part of her consulting activities, Ms Scholz has served as president and CEO of ACCT Canada, a national not-for-profit association for academic and private-sector organisations partnering to commercialise Canadian technologies.

What forms of collaboration are preferable for engagement with early-stage companies (eg, cooperative development, licensing or joint ventures)?

ML: You choose the form to fit the circumstances. Each form of collaboration has advantages and disadvantages, depending on the situation. The location of the parties can make a difference. In less developed countries a management presence may be desirable for a variety of reasons or local law may dictate a particular type of structure.

OH: We often promote collaborations with a university partner in R&D collaboration, either to address the lack of a specific feature in the ultimate product or to improve a product that is already on the market. We would also look at universities to conduct joint R&D for a new product. This is especially effective in countries where there are strong government-funded programmes for university-industry collaborative efforts. This triple-helix approach is effective, if well managed. However, there is the risk that a start-up – especially a highly technical one – might be seduced by the relative ease of surviving on government-funded research projects and its possible academic results and forgo its efforts to build a scalable product portfolio. In the event that the start-up has licensable technology, a licensing partner is a great opportunity to develop the product, provide entry (thus income) to distant markets or simply finance the company’s growth through royalty income.

MW: Large pharmaceutical companies engage with early-stage companies in a variety of ways. The most common form is some kind of collaborative licensing and development arrangement. Some companies have corporate venture capital groups, which act as purely financial investors in small, emerging companies. Some of these corporate venture capital groups are very well established, having been operating for nearly 30 years.

JS: Sometimes this depends on the country. In some countries, in order to collaborate you have to form a joint venture, both as a legal requirement and as a means of protecting and perfecting the intellectual property. For early-stage companies the stage of development in terms of the closeness to market will determine the form of collaboration (eg, licensing, co-development or other).

How much time and resources are devoted to establishing early-stage collaborations?

ML: This cannot be generalised. It depends on how critical the IP collaboration is to the stakeholders.

OH: We tend to allocate a lot of time and effort to developing early-stage collaborations. We typically follow such opportunities at the highest level of our organisation. Thus, it is crucial for us to be able to determine the potential value of the collaboration as early as possible in order to minimise costs.

MW: Early-stage collaborations are very important to many different groups within GSK and the company has consistently and for many years put substantial resources and effort into developing and nurturing early-stage collaborations. As one example, over the last several years GSK has made substantial use of deals that contain a number of preset options, becoming an industry leader in this regard.

JS: Significant time and resources must be devoted if you are going to carry out early-stage collaborations outside of your country – and putting in the time means putting in the money. In developed, developing and less developed countries many resources are available to enable, facilitate and support collaboration. However, these require time and funding to identify, connect, pursue and build relationships in order to leverage the available resources and networks. Early-stage companies do not always have the relative expertise or experience to know how to accomplish early-stage collaboration, so this is frequently accomplished by third-party representatives who can work in an unbiased way to secure collaboration and access, or else leverage programmes that are available to support the partners and the collaboration.

What networks and resources for connecting to potential collaborators are used (eg, organisations, conferences, online resources or service providers)?

ML: One of the networks that has been of most value to me is the Licensing Executives Society International (LESI). Contacts made through LESI have opened many doors. When first dealing in different parts of the world, I will almost always go to a local LES member, as I know that LES members will have a level of sophistication and credibility that can make all the difference when it comes to being able to leverage networks in that locale, get an audience with a potential collaborator and/or generate a platform for meaningful conversations.

OH: We typically rely mostly on international conferences and the often substantial networking opportunities offered at events organised by associations such as LES or AUTM, as well as events such as the IPBC and other sector-specific organisations. We will also ask for references from our own networks.

MW: A wide variety of meetings and groups are specific to the life sciences sector and most contacts are initiated through these routes.

JS: You use all of those mentioned, but there are additional resources – such as government agencies – which often serve as intermediaries. In addition, your own country will have resources available to you in any country in which you are seeking to establish collaborations. Other resources include the significant academic resources within these countries for collaborative relationships. Having served as president and CEO of the Alliance for Commercialisation of Canadian Technologies (ACCT) Canada, I can sincerely endorse the support and strength of collaborations that occur between organisations focused on early-stage collaboration. Organisations such as LES, the Midwest Research University Network, ACCT Canada, AUTM and their international counterparts and collaborators – such as the Hong Kong Trade Development Council – all exist to support and enhance opportunities for early-stage collaborations and business opportunities.

What is your perspective on the trend for collaborating with early-stage companies?

ML: From the perspective of the early-stage companies, I would say that there is a definite trend towards collaboration, although it is driven by different factors in different industries. Many small companies, particularly high-tech ventures, are essentially entrepreneurial in nature. In many instances the principals have no love of the administrative aspects of business; in their view, the venture becomes mundane once product development is complete and the product is fully rolled out and established in the market. At that point, they would just as soon pass the venture on to a new management (ie, a large company), cash out and make an exit, so that they can move on to a new entrepreneurial venture. Their entrepreneurial nature and exit strategy drive the desire for collaboration. In other cases, the ever-increasing capital requirements for bringing certain types of product to market (eg, due to regulatory burdens) is a primary factor driving the trend towards collaboration with larger companies.

OH: Possibly due to the fact that we work mostly with university technologies and early-stage start-ups, we see a lot of opportunities and growing collaborations with universities. We particularly note a growing desire to collaborate among universities, entrepreneurial ecosystems and players in economies that are in transition.

MW: A recent trend in life sciences has been an increase in the extent of translational research being conducted by universities and public institutes, as these organisations move to fill a role traditionally undertaken by small drug discovery companies. Consequently, I believe that there are changes taking place in the landscape of early drug development. GSK actively collaborates with a variety of universities through several schemes, such as the innovative discovery partnerships with academia programme, which builds links between GSK and individual research groups in institutes.

JS: I think with all of the upcoming changes in IP legislation in countries around the world, combined with the realignment of research assets and dwindling financial resources, the rate of early-stage collaboration will increase exponentially.

Global businesses

From my conversations with these expert panellists, who represent perspectives across technology areas from life sciences/pharma/biotech to information technology and from early-stage accelerators to large companies, there is a common enthusiasm and appreciation for the value of IP-based collaborations. In speaking with LESI members around the world, I have seen an appreciation for the value of these deals, but also concerns about the complexities of navigating across borders and building relationships aligned on business focus as well as business culture. In today’s global market, all start-ups should focus on being global businesses and pole vaulting the hurdles to achieve success beyond their local markets. For companies based on venture capital and the investment of others, the need for economies of scale and capturing the largest possible market are top priorities. Third-party resources to support the definition of these objectives, constructing the outreach, identifying potential partners and establishing these relations can often make a difference when there are barriers in language, culture or experience. Potential collaborators may or may not come knocking on the door; and if they do, there may be other options that are not being considered which may be more lucrative or desirable. In the end a collaboration – like a deal – is a marriage that will continue over a long period of time. It is essential to have documents to guide you in the event that things go awry; but having commonly defined, mutual goals and objectives, clear accountabilities and actions and clearly defined roles for each party will help to create a roadmap for a successful collaboration.

Action plan

What should senior IP management in for-profit businesses do to maximise the impact and value of collaborations with early-stage ventures?

  • Clearly define how corporate IP-based collaborations fit into the overall corporate development, growth and exit strategy.
  • Identify the networks of relationships that will provide access to key decision makers in target companies for collaboration.
  • Prepare corporate, product and/or service overviews to help educate and establish interest in moving to confidential disclosure and due diligence.
  • Focus on ensuring that the collaboration provides benefits for both parties and that there is trust and respect.
  • Ensure that there is clear, open and constant communication to ensure that the objectives of both parties are aligned and that changes are adapted as they occur on both sides of the collaboration.


Gary N Keller is CEO at Xomix, Ltd, founder and chair of the emerging enterprises committee for LES (USA & Canada), Inc and chair of knowledge management for LESI

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