In this blog post I discussed about the OWSM Policy Repository that is embedded in JDeveloper. However some times people may run into issues with the embedded repository. Here is screen snapshot that shows the error you may run into (click on the image for larger image):

If you run into "java.lang.IllegalArgumentException: WSM-04694 : An invalid directory was provided to connect to a file-base MDS repository." this caused due to spaces in the folder name. Here is a quick way to workaround this issue by running "Jdeveloper.exe - su".

Hope people find this useful!