Conquip Holdings Pty Ltd v S & a Restaurant Corp
[1997] ATMO 16
•28 April 1997
TRADE MARKS ACT 1955
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS,
WITH REASONS
Re: Opposition by CONQUIP HOLDINGS PTY. LTD. to an application by
S. & A. RESTAURANT CORP. for an extension of time for serving evidence in answer in relation to an application for removal of trade mark registration number 376352
As set down by the transitional provisions of Part 22 of the Trade Marks Act 1995, the provisions of the Trade Marks Act 1955 continue to govern this opposition. Accordingly, unless otherwise specified, the authority I refer to is the Trade Marks Act 1955.
Trade mark number 376352 for the mark BENNIGAN’S in the name of S. & A. Restaurant Corp (S & A) has been registered since 3rd June 1982 in respect of:
“Services relating to restaurants, cafeterias, cafes, bars, taverns and hotels, consisting of preparation and service of foodstuffs and alcoholic and non-alcoholic beverages; retailing services; all being services in this class”, being class 42.
On 9th March 1995, under the provisions of section 23, Conquip Holdings Pty Ltd (Conquip) applied to have the subject mark removed from the Register. The removal application was advertised in the Australian Official Journal of Trade Marks of 15th June 1995. A notice of opposition by S & A was lodged on 28th June 1995, therefore under the provisions of regulation 54, the evidence in support of the opposition was due within 14 days from that date - on 12th July 1995. Part of this evidence was served and lodged by Conquip on 11th July 1995 and, on the same day, it requested an extension of time of one month for service of the balance of the evidence in support. S & A objected to the extension of time. Following a hearing on the matter, the extension was allowed. A further extension was sought and granted, and on 28th August 1995, the balance of the evidence in support was lodged. Under the provisions of regulation 55, S & A was to serve the evidence in answer on Conquip within three months after that date. However, in an official letter of 7th February 1996, both parties were notified that, owing to a computer system problem in the Trade Marks Office, the provisions of regulation 55 were to take effect on 5th February 1996, and the serving date of the evidence in answer was therefore 5th May 1996. On 3rd May 1996, S & A applied for and was granted an extension of time of three months for serving the evidence in answer. Subsequently, S & A made three successful applications each for one month taking the due date to 5th November 1996. When it requested another one month’s extension of time to 5th December 1996, Conquip objected to it and made written submissions in relation to the objection in a letter dated 29th November 1996. Subsequently Conquip applied for a hearing on the matter.
The hearing was held in Melbourne on 3rd February 1997. Mr John McCormack of Griffith Hack, patent and trade mark attorneys of Melbourne, represented Conquip. Mr Graham Cowin of Phillips Ormonde & Fitzpatrick, also patent and trade mark attorneys of Melbourne, appeared for S & A.
Submissions
The written submissions of 29th November 1996 on behalf of Conquip may be summarised as:
S & A has already had an extensive period of time to prepare and serve the evidence in answer. Given that the evidence in support was not of onerous length or content, a further period of time beyond nine months is not warranted.
The reasons put forward in the application do not constitute a proper case or justify the extension of time. The affidavit lodged in support of S & A’s application, inter alia, refers to the United States attorney’s involvement in a separate US litigation matter as contributing to the delay. That is not a sufficient justification for an extension of time. In support, reference is made to Diamond Scientific Co v CSL Ltd (1992) AIPC 90-927, where a delay of five months in carrying out a specific act before the Patent Office during an opposition was caused by the attorney’s absence from her practice. That attorney was refused leave to carry out the specific act. The Delegate of the Commissioner of Patents had also made a comment that there was apparently no one in her firm of patent attorneys prosecuting the opposition in her absence.
Since Conquip has been continuously using the mark BENNIGANS for several years, the mark has become well known to the public in connection with Conquip’s services. Accordingly, further delays create uncertainty for Conquip’s business and prolongs the potential for confusion in the minds of the public in respect of the mark.
In commencing the submissions at the hearing, Mr McCormack first reminded me of the two leading cases in relation to extension of time applications under the provisions of section 130 of the Act: Mitty’s Authorised Newsagency v The Registrar of Trade Marks (1983) 50 ALR 495 and Vangedal-Nielsen v Smith (Commissioner of Patents) 1980 33 ALR 144. He then cited The Australian Olympic Committee Inc v Brennan 30 IPR 44, where the Assistant Registrar Helen Hardie considered an extension of time matter for serving the evidence in support under the following five criteria:
The length of time already allowed
The reasons put forward to justify the extension
The seriousness of the opposition
The inconvenience likely to be suffered by the two parties; and
The public interest in the matter.
It will be convenient to summarise both Mr McCormack’s submissions and Mr Cowin’s responses to the written as well as oral submissions under each of those headings.
1. Mr McCormack pointed out that no evidence of any kind as evidence in answer had been received by Conquip as at the date of hearing. The time was well after the time for which the extension was being sought. As the evidence in support of the application for removal of the mark had been served on 28th August 1995, S & A Restaurant had the evidence in support in its possession fifteen months as of the date of the current application and nine months of official time for serving the evidence in answer. There was an increasing onus on behalf of the applicant for an extension of time as time went on and more extensions were allowed, Mr McCormack said, and in this regard he referred to the current Trade Marks Office Draft Manual of Practice and Procedure, where in Part 50, para 5, it is stated that under the 1955 Act sterner measures were gradually applied to extension of time matters when the time allowed reached 12 months. In support of this proposition, he cited ACI Australia Ltd v Shelm Merchandising Co Pty Ltd 32 IPR 563 and Sporoptic Pouilloux SA v Arnet Optic Illusions Inc, an unpublished Trade Marks Office decision issued on 10th November 1994. Registered proprietor’s evidence in relation to defending a section 23 removal action, which needed to show only a small amount of use in the relevant period, was not an onerous task. The application for the extension appeared to indicate that S & A was not seriously pursuing the matter: the reason given that the party had other important things to do and was too busy, as stated in Mr B Joseph Schaeff’s affidavit, showed lack of diligence (ACI Australia v Shelm, supra). A & S had failed to indicate when the evidence would be lodged or what form it would take. He reminded me that applications for an extension of time had been refused in cases where it was only the second extension of time if there had been no good reasons put forward to support the application, for example: Lord Bloody Wog Rolo v United Artists Corp (1988) 11 IPR 516 and Virtual Reality v W Industries Ltd (1994) 28 IPR 455.
Mr Cowin disagreed with the argument that the extension of time already granted to S & A had been inordinate. If the sought extension were to be allowed, it would have had a total of ten months within which to serve its evidence in answer. By referring to Australian Olympic Committee v Brennan, supra, Mr Cowin noted that a period of nine months for the service of evidence appeared to be regularly allowed and that the additional one month now sought was not difficult to justify. Conquip’s argument that the time for serving the evidence in answer really extended from 28th August 1995 presupposed that the disputed extension of time was allowed and all the evidence was admitted. That was not apparent until 5th February 1996.
Conquip’s suggestion that no further time was required because its own evidence in support was not of onerous length was largely irrelevant, Mr Cowin said. The details for compiling a declaration could often take very much longer than the actual drafting of a declaration. The supporting and answering evidence typically addressed quite different facts which could take different time frames to compile as evidence.
While the evidence had not been served within the extended time under objection, it was to be completed and served within the next two days, i.e. on 5th February 1997, and S & A had applied for further extensions of time to cover that period. Even the further two months extensions beyond the current one, which would take the total time to twelve months, would not be extraordinary taking into account the thirty-three months allowed in Bundy American Corp v Rent-A-Wreck (Vic) Pty Ltd (1985) 5 IPR 307 and thirty-two months in Jonathan Sceats Designs Pty Ltd’s Appn (1989) 15 IPR 59.
Mr Cowin agreed that the required evidence would be available within a relatively short period of time in cases where ordinary use of the mark had occurred. However, it seemed unlikely that S & A would be able to produce evidence of unambiguous use of the subject mark. The so called “simple solution” of the evidence of use of the mark was not available. The provisions of section 23 did not state that a registered mark shall be removed if the registered proprietor did not produce evidence of use. S & A, he explained, intended primarily to rely on the exercise of the Registrar’s discretion in the matter. That was a very significant, indeed, onerous discretion and one which should not be exercised lightly. While recognizing that the present proceedings were not dealing with the merits of the removal application, Mr Cowin said it was relevant to recall to mind the reasons expounded in “Hermes” Trade Mark [1982] RPC 425 to assist the Registrar in the exercise of discretion in that case. At the appropriate time he would be putting to the Registrar similar, equivalent or other relevant reasons for exercising the discretion in the removal application in favour of S & A. In presenting such a case, the relevant facts ought to be supported by appropriate evidence, which was somewhat more extensive, was much more difficult to compile than evidence showing mere use of the mark in Australia and more time consuming in its completion.
2. In Mr McCormack’s view, the reasons for the extension of time were patently inadequate. The only reason put forward was the pressure of too much work and that the endeavours of the United States instructing attorney responsible for the matters of the trade marks for S & A were diverted to an unrelated matter. A claim that an attorney was too busy, or was encountering pressure of work, or that other matters took precedence, had not been sufficient for the grant of an extension of time in cases such as: Austoft Industries Limited v Cameco Industries Inc 29 IPR 425, Kimberly -Clark Corporation v Procter & Gamble Co 20 IPR 425 and Kimberly-Clark Corporation v Procter & Gamble Co 26 IPR 581. The evidence in answer matter could have been delegated to other members in the firm of the US instructing attorneys which had fourteen attorneys, including seven partners and one patent agent, as evidenced by the letterhead, Mr McCormack said and tendered a copy of the firm’s stationery. Moreover, the reasons put forward did not constitute anything special or out of the ordinary. It was expected in major, full-service law firms that important and urgent matters arise on a regular basis, and the firms have the resources to cope with such situations. In the past, reasons relating to what was occurring in overseas jurisdictions and the pressure of work relating to activities in overseas jurisdictions had not been sufficient to support the grant of an extension of time - Kimberly-Clark v Procter & Gamble, supra, nor had the pressure of work and the responsible person’s absences from the office - Austoft v Cameco, also supra. As the section 23 application related to restaurant services, it was clear that the services could only be provided in Australia, therefore evidence of use of the mark was not germane to the present enquiry . Being the proprietor of the mark, S & A had access to its own records and to its own personnel. There was no indication as to what progress had been made in the matter. S & A therefore had not discharged its onus to show good reasons why more time should be granted for serving the evidence in answer - Universal City Studios Inc v Frankenstein Pty Ltd (1994) AIPC 91-044.
Mr Cowin submitted that the unexpected difficulties with the related litigation in the United States and the illness of a member of the responsible attorney’s family, which were compounded by earlier problems in securing the necessary information from S & A, were indeed sufficient reasons for allowance of the extension.
He acknowledged the lack of detail on progress of the evidence, but argued that the reasons did explain in some detail the reasons for not completing it. Those reasons were extensive and comprehensive. Mr Schaeff’s affidavit made it clear that the litigation activity referred therein was not of a regular or ordinary business nature; it was unexpected and required immediate and urgent attention. While Mr Schaeff bore the primary responsibility for collecting and preparing the evidence, other members within his firm were also preoccupied with the litigation activity. It would not have been practical at the time to refer the matter to another person having no background information or knowledge of the matter in suit. That was particularly so, given the expectation that the disrupting activity in the litigation would be short lived. Mr Schaeff was working on the evidence concurrently with the handling of the litigation, but regularity had been thrown into disarray by the unexpected litigation activity. In addition, the pressure from the litigation had been compounded just prior to the end of the extended period by illness of a member of Mr Schaeff’s immediate family.
Mr Cowin also noted that the period of disruption caused by the unexpected turn in the litigation was much longer than the one month’s extension of time sought on the basis of that disruption. To that extent, he said, the current extension request could be clearly distinguished from Diamond v CSL, supra.
3. By failing to serve the evidence in answer, S & A had demonstrated lack of diligence and seriousness concerning the opposition matter, Mr McCormack commented. The only conclusion that could be drawn from the inactivity was either that the subject mark had not been used, or that S & A was not sufficiently interested in pursuing the service of the evidence in answer, and that it was merely engaging in time-wasting and delaying tactics. The pressure of work which had been stated as the reason in support of the extension of time application was a clear indication that the present opposition matter did not command a high priority. In that regard, Mr McCormack again referred to ACI Australia v Shelm, supra, in which the reason in support of an application for extension of time was given that the applicant had been too busy taking care of other matters.
The fact that the opposition to the removal application was not frivolous, Mr Cowin responded, was self evident, at least to the extent that the evidence in answer was to be served by 5th February 1997. S & A’s seriousness in the matter was demonstrated by the extent to which it had gone in supporting the extension request; it had provided an affidavit explaining in some detail the circumstances which caused the delay in finalising the evidence. In addition, it had sought only one month’s extension in the honest belief and expectation at the time that the evidence would be completed within the immediate future.
Concerning ACI Australia v Shelm, supra, Mr Cowin pointed out that, although the reasons for the extension request were “very thin”, Shelm was granted another four months in addition to the eleven months, including three months statutory period, already allowed.
4. Mr McCormack submitted that Conquip had been using the mark in Australia for some considerable time. The existing registration of the mark was preventing expansion of the services by Conquip and the possibility of opening additional sites. It was hindering Conquip’s efforts in establishing a more widespread and better reputation of the mark in Australia. Conquip was exposed to a deceptive and misleading conduct situation wherein the official records would indicate that the registered owner of the mark was different from its user. It was therefore suffering damage and would be extremely disadvantaged, should the sought extension be granted.
He argued that S & A had not taken any action to prevent the continued use of the mark by Conquip and had not taken any steps at all to preserve its right in the mark being removed. S & A could not therefore claim it was suffering any inconvenience in the matter.
If S & A were unsuccessful in the extension of time matter, Mr Cowin said, then it faced the possibility of its mark being removed from the Register. Given the nature of the substantive action being taken against the registration, and the magnitude and finality of the likely consequences of a denial of the extension, and bearing in mind the relatively minor inconvenience to Conquip by the delay now being contemplated, the additional time was justified, he stressed.
Turning to the objection based on the uncertainty caused to Conquip’s business activity, Mr Cowin argued that delays were a consequence of trade mark opposition proceedings. Further delays through extensions of time obtained by both parties in the present proceedings were unfortunate, but they were a necessary pre-requisite for a full and proper outcome of the matter in suit.
5. On this point Mr McCormack submitted that members of the public were being deceived and confused by the continued existence of the present situation where one trader was using the mark in Australia, whereas another entity was indicated to be the registered proprietor of the mark.
Mr Cowin contended that the public interest would be best served by a full and open disclosure of the facts and evidence from both parties. In support he cited Stafford- Miller Ltd v Cosco Holdings Pty Ltd (1989) AIPC 90-583.
On the matter of costs, while Mr McCormack submitted that costs should be awarded to Conquip irrespective of the outcome because S & A’s application indicated the evidence would be served by November 1996, Mr Cowin requested that costs follow the event.
Discussion
Bearing in mind the five factors considered in Australia Olympic Committee v Brennan, I propose to discuss them in turn in light of the submissions from both parties.
It has not been disputed that prior to the subject application for an extension of time, S & A had the evidence in support in its possession for almost fifteen months, although, owing to a computer error in the Trade Marks Office, the official time for serving of the evidence in answer was nine months, which included three months under the relevant regulation. In light of what Windeyer J said in Estex Clothing Manufacturers Pty Ltd v Ellis and Goldstein [1966-1967] 116 CLR 254, at pp 258-259, it can be concluded that, in normal circumstances, the matter of providing evidence of use of a mark by the proprietor covering the period in terms of s 23 would be relatively simple, I believe that the fifteen months S & A had at its disposal to peruse Conquip’s evidence and prepare its own evidence would have been more than adequate. The serving of the evidence in support on S & A was completed on 28th August 1995, therefore S & A would have been fully aware of the case it need to answer for a period of fifteen months and could have concentrated on its preparation and completion during that time so that the actual serving of its evidence would have been expected to have occurred at least within the nine months official time for that purpose. In Bundy v Rent-A-Wreck and Jonathan Sceats, both supra, mentioned by Mr Cowin, the extension of time applications concerned evidence relating to section 49 proceedings. These normally would be expected to require relatively more time, particularly if the conflicting parties were in the process of negotiating, or in situations where the negotiations had broken down and the parties required further time for the preparation of the evidence, than for evidence in answer in opposition proceedings concerning a section 23 application for removal of a mark. Moreover, the extension of time matters concerning the said cases were decided before the Trade Marks Office adopted the practice of a more stringent approach in granting applications for prolonged periods of extensions of time for serving the evidence in opposition proceedings.
It has been argued that S & A needed the additional time for producing the evidence not on the actual use of the mark, but that it proposed to lodge evidence that would seek exercise of the Registrar’s discretion in relation to the removal action. Such a case, it was said, required considerable supporting evidence, and therefore more time was needed for its compilation and finalization than for evidence showing use of the mark by the registered proprietor. While it would be most important to present all the relevant information to the Registrar for the exercise of his/her discretion in the matter of an application for removal of a trade mark, particularly where a trade mark has been registered since 3rd June 1982, I believe fifteen months for that purpose should have been quite sufficient, at least for serving some of the evidence, even taking into account S & A’s intention in arguing its case to rely on the principles considered in Hermes case, supra. Moreover, it appears that the evidence in answer is to be served only on 5th February 1997, as advised by Mr Cowin.
In requesting the current extension of time from 5th November 1996 to 5th December 1996 for service of the evidence in answer, S & A stated:
“Despite the intentions expressed in our previous request it has not been possible to complete and serve the evidence within the period already provided.
Continued disruptions to the timetable of the United States Attorney for the Opponent have meant that it has simply not been possible to complete the evidence as planned. Those disruptions are detailed in the enclosed copy of an Affidavit by the Attorney, and relate to the pending litigation previously referred to as well as an unexpected serious illness to a family member.”
The affidavit from Mr B Joseph Schaeff, an attorney of the law firm Killworth, Gottman, Hagan and Schaeff in the United States of America (Mr Schaeff’s first affidavit) states, inter alia, that he bears primary responsibility for collecting and preparing the evidence in answer, and that he is currently in the process of collecting and preparing that material. On 18th September 1996, while in midst of preparation of that evidence, he had been served with a motion for summary judgment in a trade marks opposition matter involving S & A, resulting in Mr Schaeff and other members of his firm being engaged in preparing a response to the motion between 18th September 1996 and 7th October 1996, to the exclusion of most other of S & A’s matters. Subsequently he was involved in the preparation and filing of various other documents concerning the proceedings, anticipating the tasks to be concluded by 6th November 1996. While working on the litigation proceedings, a member of his immediate family had been hospitalized for the “past week” with serious, life threatening condition, thus reducing the time he has been able to devote to the evidence in answer matter. However, he expected to finalize it during the week of 11th November 1996. The affidavit is dated 5th November 1996.
During the hearing Mr Cowin tendered another affidavit from Mr Schaeff, dated 31st January 1997, (Mr Schaeff’s second affidavit), declaring that his firm was an average sized firm with personnel of fourteen attorneys and one patent agent, and that three attorneys devoted substantial time to the practice of trade mark law, one of them being employed only part time. The amount of time required to respond to the summary judgment motion discussed in his previous affidavit was such that the other full time attorneys and himself worked to the exclusion of most other client matters to prepare and file the responsive evidence and briefs within the time permitted by the relevant rules. Practically speaking, he says, there was no one else within his firm who could have handled the evidence matters. He further states that S & A has legal staff, but that they were also involved in responding to the motion for summary judgment.
In the application for the extension of time from 5th September 1996 to 5th October 1996, dated 4th September 1996, S & A explained some difficulties hampering the finalization of the evidence. Despite those difficulties, it said, there had been progress in the preparation of the evidence and it was expected to have “everything available by way of evidence within the next 2 weeks”. That time period was just before Mr Schaeff and his colleagues became involved in the urgent litigation proceedings in the United States which required their full attention until 7th October 1996. Mr Schaeff continued to be involved in those proceedings even beyond that date, as is apparent from both of his affidavits. However, if the evidence in answer had reached the stage of near completion, as would be expected from the September 1996 application for an extension of time and Mr Schaeff had been working on it concurrently with the litigation matters, as argued by Mr Cowin, then, in my opinion, the evidence could have been served on Conquip before Mr Schaeff’s close relative was admitted to the hospital. Both affidavits are silent as to the progress made at that time and how much work remained before its completion. Furthermore, the affidavits do not reveal S & A’s intention to rely on evidence in relation to the Registrar’s discretion in the matter and fails to explain that the nature of the proposed evidence was such that the time for its preparation and serving would take longer than for evidence showing use of the mark during the critical period in terms of section 23 of the Act. Even if the unexpected circumstances described by Mr Schaeff were justified for the failure to conclude the matter, service of the evidence ought to have occurred by the middle of November 1996, as indicated in Mr Schaeff’s first affidavit.
While I accept the argument that it would not have been practical for any other person in Mr Schaeff’s firm than Mr Schaeff himself to take over the evidence responsibilities at an advanced stage, in view of my previous comments, I do not believe that S & A has entirely met its onus in comprehensively explaining why, in the above circumstances, further time would be justified so as to meet the requirements set out in Mitty’s v Registrar and Vangedal-Nielsen v Smith, both supra.
Any opponent’s action of defending its mark from being removed from the Register should not be regarded as frivolous. In the present situation, the grounds of opposition, inter alia, are based on S & A’s denial that it did not use the mark in good faith during the relevant three year period under the provisions of section 23 and that Conquip was a person aggrieved by the mark of the subject registration. S & A also claims that the mark should not be removed in the exercise of the Registrar’s discretion, and that the mark had not been abandoned by the proprietor. These are serious challenges to the applicant for removal of the mark. Moreover, the fact that S & A was proposing to serve all the evidence in answer on 5th February 1997 and have actually forwarded copies of that evidence to Conquip (who, through its attorneys, has not “acknowledged the service”, but only “receipt” of it because it was served out of time), demonstrates, as I see it, that it was earnest concerning the opposition, but that it did not grant the evidence matter the appropriate priority and effort.
Conquip is justified in being concerned over use of its mark in a situation where the same mark is actually registered in another proprietor’s name as such use poses potential infringement. It is also recognized that Conquip is being commercially disadvantaged by the prolonged process in the current proceedings which are causing delays in its plans for expansion of the business and building up a more substantial reputation in Australia. Whilst I appreciate Conquip’s precarious situation concerning use of the mark and the commercial losses described by Mr McCormack, I would point out that, undesirable as they are, delays are common and an unavoidable part of any opposition proceedings, as noted by Mr Cowin.
The fact that S & A has now forwarded the evidence in answer material to Conquip’s attorneys refutes the submission that S & A has lost interest in protecting rights in its mark and therefore would not experience any adverse effects in the matter. I must also take into account the situation in the event of a refusal of the requested extension, i.e. where S & A would be denied its only opportunity to provide evidence in rebutting the allegations of non-use of its mark, thus causing a possible removal from the Register of a mark which has remained unchallenged thereon for almost fifteen years.
In the above circumstances, should the extension of time not be allowed, in my estimation, greater disadvantage would be suffered by S & A than by Conquip. I believe therefore that the balance of convenience favours S & A.
When determining an opposition, it is essential for the Registrar to have all the relevant facts before him/her. Concerning the public interest question in the present case, while I concede that an expeditious resolution of the current dispute is desirable if Conquip’s mark is causing deception and confusion to persons encountering the mark in the provision of the relevant services, as stated by Mr McCormack, I refer to the words of the hearing officer in Pacific Dunlop Ltd v Fruit of the Loom Inc 17 IPR 286, at p 288:
“... the public interest associated with maintaining a register of validly registered trade marks will be best served by the provision, within reasonable limits, of sufficient time for both parties in such proceedings to provide the Registrar with all relevant material on which to base a decision.”
I do not think it would be unreasonable to draw the conclusion from my earlier comments that in these proceedings it would be in the public interest for both parties to be given an opportunity for presentation of as much material as possible in supporting their case.
Decision
Having considered the above factors, I have decided to allow the sought extension of time. While I am not totally persuaded of S & A’s diligence and dedicated efforts in minimizing the time for completing the evidence, nor am I satisfied that it has fully discharged its onus in proving why the additional time is required, I have given greater weight to the fact that the evidence was served on the attorneys acting for Conquip on 5th February 1997, as advised in a letter of 12th February 1997 from S & A’s attorneys. I therefore allow the extension of time to 5th December 1997 within which to serve the evidence in answer.
Concerning the matter of costs, normally costs would be awarded to the successful party. However, in the circumstances I have outlined above, I have decided each party should bear its own costs.
Vija Zars
Hearing Officer
28th April 1997
Key Legal Topics
Areas of Law
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Civil Procedure
Legal Concepts
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Appeal
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Limitation Periods
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Procedural Fairness
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