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Filter encoding can effectively enhance the efficiency of ternary content addressable memory (TCAM)-based packet classification. It can minimise the range expansion problem, reduce the TCAM space requirement and improve the lookup rate for IPv6. However, additional complexity will incur inevitably in the filter table update operations. Although the average update cost of the prefix inclusion coding (PIC) scheme is very low, the worst-case update cost can be significantly higher. Major modifications to the PIC scheme to improve its update performance are presented. The new coding scheme is called PIC with segmented domain. By dividing the field value domain into multiple segments, the mapping of field values to code points can be more structural and help avoid massive code-point relocation in the event of new insertions. Moreover, the simplified codeword lookup for the address fields can be implemented with embedded SRAM rather than with TCAM. Consequently, the lookup rate of the search engine can be improved to handle the OC-768 line rate.