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Wes,
I would like to know the exact error that occurs by turning on the Java Control panet verbosity and debugging on what kind of excepetion occurs. JRE version also introduces lot of restriction based on Java security or policy changes.
Please let me know which datecode of Windchill are you working on?
Do you have replica site in your infrastructure where with JRE updatecausing the problems?
-Thanks,
Saumya
Steris Corporation.