David Wake and The Commissioner of Patents Cavitus Pty Ltd OTHER PARTY
[2012] AATA 669
•3 October 2012
[2012] AATA 669
Division GENERAL ADMINISTRATIVE DIVISION File Number
2010/3614
Re
David Wake
APPLICANT
And
The Commissioner of Patents
RESPONDENT
And
Cavitus Pty Ltd
OTHER PARTY
DECISION
Tribunal Deputy President D G Jarvis
Date 3 October 2012 Place Adelaide The tribunal refuses the respondent's application to dismiss the application for review pursuant to s 42B of the Administrative Appeals Tribunal Act 1975 (Cth).
............ [Signed] ............
Deputy President D G Jarvis
CATCHWORDS
PRACTICE AND PROCEDURE - Jurisdiction of the AAT under Patents Act 1990 (Cth) - disputes between interested parties re patent applications - determination under s 32 of name in which application should proceed - utility of AAT reviewing determination where Commissioner also makes eligible person declaration under s 36 - relationship between ss 32 and 36.
PRACTICE AND PROCEDURE - Claim by applicant to be co-inventor of patent - application by Other Party for summary dismissal - application refused.
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth), s 42B
Patents Act 1990 (Cth), ss 15, 32, 36 and 224
Patents Regulations 1991 (Cth), reg 3.8(d)
CASES
Bushell v Repatriation Commission (1992) 175 CLR 408
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60
McDonald v Director General of Social Security (1984) 1 FCR 354
Re Eckersley and Minister for Capital Territory (1979) 2 ALD 303
Re Filsell and Comcare (2009) 109 ALD 198
Re Lavery and Registrar, Supreme Court (Qld) [No.2] (1996) 23 AAR 52
Re Lee and Commissioner of Patents and Komipharm International Co., Ltd [2011] AATA 818
Shi v Migration Agents Registration Authority (2008) 235 CLR 286REASONS FOR DECISION
Deputy President D G Jarvis
3 October 2012
INTRODUCTION
The applicant, David Wake, claims to be a joint inventor of an invention that is the subject of Patent Application 2005200778 (the Application) filed on 22 February 2005 by the Other Party, Cavitus Pty Ltd (Cavitus), naming four individuals as co-inventors.
In a decision dated 29 July 2010, a delegate of the Commissioner of Patents determined, pursuant to s 32 of the Patents Act 1990 (Cth) (the Act), that Mr Wake was not an inventor, either alone or jointly, in respect of the invention as described and claimed in the Application, and that the Application was to continue to proceed in the name of Cavitus. He also declared pursuant to s 36(1) of the Act that Cavitus was the sole eligible person in relation to the subject invention.
Mr Wake has applied to this tribunal for review of the delegate’s determination under s 32. The tribunal has jurisdiction to review that determination, but has no jurisdiction to review the declaration under s 36(1). However, for reasons explained below, the determination of the within proceedings will effectively determine the question of whether (as he claims) Mr Wake is a joint inventor of the subject invention, and whether the application should proceed in the names of Cavitus and Mr Wake jointly.
The invention that is the subject of the Application was developed for the purpose of cleaning wine barrels (although it can be used on other containers), and has been referred to as the “sheath” invention, because it entails using a sonotrode within a membrane filled with liquid.
The Specification filed in respect of the Application refers, under the heading “Background of the Invention”, to the use of barrels in the wine industry, and the practice of cleaning them to remove bacteria and yeasts that might contaminate the wine that is to be placed in the barrels. Reference is then made to the different methods of cleaning barrels to enable them to be re-used.
Under the heading “Summary of the Invention”, the Specification states:
“According to the present invention there is an ultrasonic apparatus, including a sonotrode that is at least substantially surrounded by a membrane, an ultrasonic generator connected to the sonotrode; and an ultrasonic transducer connected to the ultrasonic generator, such that when in use the sonotrode is placed within the inside of a container, the container containing a first liquid, the sonotrode being at least partially surrounded by a second liquid, the membrane being positioned between the first and second liquids so that the sonotrode is in direct contact with the second liquid and not the first liquid
In preference, the membrane is distensible.
In preference, the membrane forms a bladder at least partially surrounding the sonotrode so that when the bladder is filled with the second liquid it expands.”
The Specification further explains that the “first liquid” placed in the container and which comes in contact with the inner surface of the container would have a temperature range of 25○C to 95○C and the liquid within the membrane, which surrounds the sonotrode, would have a temperature range of 5○C to 50○C. The sonotrode is in direct contact with the second liquid within the membrane, and not the first liquid. Operating the ultrasonic sonotrode induces ultrasonic cavitations within the liquids, and this disinfects the inner surface of the container. The Specification proceeds to describe various alternative embodiments of the invention, including different ways of introducing the sonotrode into the barrel, and the addition of various chemical disinfectants to the water in the barrel.
The Application includes the following independent claims defining the invention:
“1. An ultrasonic apparatus, including:
a sonotrode at least substantially surrounded by a membrane;
an ultrasonic generator connected to the sonotrode; and
an ultrasonic transducer connected to the ultrasonic generator and associated with the sonotrode;
such that when in use the sonotrode is placed within the inside of a container; the container containing a first liquid, the sonotrode being at least partially surrounded by a second liquid, the membrane being positioned between the first and second liquids so that the sonotrode is in direct contact with the second liquid and not the first liquid.
…
13. A method for ultrasonic disinfection, comprising:
placing a first liquid in the temperature range 25○C to 95○C and in particular in the temperature range 30○C and 60○C in contact with a portion of an inner surface of a container;
placing an ultrasonic sonotrode at least substantially surrounded by a membrane, inflating said membrane with a volume of a second liquid in the temperature range 5○C to 50○C and in particular in the temperature range 5○C to 25○C, to fill a void volume of the container;
having an ultrasonic generator connected to the sonotrode; and
an ultrasonic transducer connected to the ultrasonic generator;
such that when in use the sonotrode is placed within the inside of a container the container containing a first liquid, the sonotrode is thus in direct contact with the second liquid and not the first liquid; and
operating the ultrasonic sonotrode to effect cavitations in both the first liquid and the second liquid.
…
18. A method to disinfect an interior of a container having residue in the surface layers of an interior surface including
introducing an ultrasonic sonotrode at least substantially surrounded by a membrane, to the interior of the container though [sic] an opening, the container containing a first liquid in the temperature range 25○C to 95○C and in particular in the temperature range 30○C and 60○C, and the sonotrode being at least partially surrounded by a second liquid in the temperature range of between 5○C to 50○C;
activating the sonotrode to induce cavitations in the liquids during rotation of the container to expose the surface layers of the inner surface and spoilage microorganisms on, in and beneath said layers to ultrasonic energy and heated fluid; and
removing detritus resulting from exposure of the residue to the ultrasonic energy.”
It appears that positioning the sonotrode inside the membrane and filling the membrane with the second liquid at a colder temperature has the purpose of enabling the ultrasonic energy from the sonotrode to be transmitted more efficiently, that is there is less propagation loss than would be the case if the sonotrode were used directly into the heated water, and so the transfer of ultrasonic energy from the sonotrode to the wetted surfaces of the container is enhanced, resulting in more effective cavitation at the wetted surfaces of the container. The Specification also states that the presence of the sheath also serves to reduce the volume of disposable liquid required for the cleaning and disinfection of the barrel interior.
Involvement of the applicant
The relationship between Cavitus, the co-inventors named in the Application, a company called Soniclean Pty Ltd (Soniclean) and Mr Wake is summarised in the delegate’s decision. It is not necessary for present purposes to refer to the relationship between all of the parties. It suffices to record that Mr Wake was engaged as an unpaid consultant by Soniclean to further their business interests, and that Soniclean’s core business at that time was the sale of ultrasonic cleaning machines to the medical and dental industries. Mr Wake had had prior experience and expertise in the wine industry, and after attending a high-power ultrasonics seminar in Adelaide in January 2003, he instigated investigations into the use of ultrasonics to disinfect and clean wine barrels using sonotrodes.
As a result of his investigations and in the course of his consultation with Soniclean, he invented a process of cleaning wine barrels by inserting a sonotrode with a diameter of 40mm through a standard bung hole in the barrel. This was a smaller diameter sonotrode than was then commercially available, and he procured it from a company in Germany. As far as he is aware, no sonotrode of that size had ever previously been supplied to anyone in Australia. Mr Wake called this his “key inventive steps” invention (the KIS invention), and it became the subject of patent applications.
In a statement lodged with the tribunal on 31 August 2012 in connection with the present dismissal application, Mr Wake describes in some detail his working relationship with Mr Richard McLoughlin (who is one of the four persons named in the Application as co-inventors) over a period of 21 months commencing in January 2003 and concluding on 16 September 2004. Mr Wake’s version of events, as I have understood it, is as follows. In the course of his consultancy with Soniclean, he made his KIS invention, which I described in the preceding paragraph. In the course of his continuing work, Mr McLoughlin had unfettered access to this KIS invention. After testing this invention, he and Mr McLoughlin then investigated improvements to the invention involving using a pulsating bladder within the liquid inside the barrel and located away from the sonotrode, with the bladder being able to be filled with liquid and emptied in order to “pulse”. The purpose of the bladder was to improve the ultrasonic action of the sonotrode by breaking up standing waves that were caused by the sonotrode. Different sizes and types of bladders were tried, with the intention in each case of enhancing the cavitational effect of the sonotrode. Further, different sized tubes were tried in order to pump cleaning fluid in and out of the oak barrel. They also tried placing the bladder in different positions.
Mr Wake accordingly contends that Mr McLoughlin and the other co-inventors who claimed to have invented the invention referred to in the Cavitus Application did not start from a “blank canvas”, but rather, “the sheath” invention incorporated novel inventive steps that included the KIS invention and the use of a bladder to enhance the cavitational effect of the sonotrode.
Other Party’s contention
Dr Angus, a patent attorney, represented Cavitus Pty Ltd, and applied for an order that Mr Wake’s application for review should be dismissed pursuant to s 42B of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act) on the grounds that it is frivolous or vexatious. Dr Angus referred to what he described as significant differences between the sheath concept and the KIS invention to which Mr Wake referred. In particular, Dr Angus referred to: (a) the two-phase environment which was inherent in the sheath concept, that is the sonotrode is located within the membrane, in order to make the cavitational effect of the sonotrode more efficient by operating on colder liquids; and (b) the apparatus referred to in the Cavitus Application did not use a pulsating bladder, because there is no suggestion in the specifications or claims included in the Application that the membrane would pulsate in the manner which Mr Wake described.
Potential relevance of the membrane and the bladder
I referred in paragraph 9 above to the purpose of positioning the sonotrode within the membrane. It is also relevant to refer to a further paragraph in the Cavitus Specification, which states as follows:
“It is found that the presence of the bladder serves to, by way of partial internal reflection of the ultrasonic waves generated by the sonotrode, enhance the resultant cavitations cleaning and disinfection effects arising from the ultrasonic energy transmitted into the free water contained within the barrel.”[1]
[1] Specification, page 8.
Mr Wake was apparently prevented by ill health from attending the hearing before the delegate. I note that the delegate made the following comment:
“McLoughlin’s account of how the sheath concept came to him is short on detail but plausible, and I accept his statement that this concept was derived to address problems not previously considered by Mr Wake. On this basis I am satisfied that the sheath concept does not merely form part of a preferred working embodiment of Wake’s invention.”[2]
[2] Paragraph 84 of the delegate’s decision.
The delegate also concluded from the information before him that “the only common thread between Wake’s invention and the subject invention is the use of a single sonotrode which is inserted through the bung hole of a wine barrel”.[3] It accordingly appears that Mr Wake did not place any information before the delegate as to the further inventive steps that Mr Wake has described to me involving the use of a bladder to render the cavitational effects of the sonotrode more effective. It was on the above understandings that the delegate decided that Mr Wake’s invention did not lead to the introduction of the sheath concept, and that the sheath concept did not merely form part of a preferred working embodiment of Mr Wake’s invention.
[3] Paragraph 83 of the delegate’s decision.
LEGISLATIVE PROVISIONS
Under s 29 of the Act, a person may apply for a patent for an invention by filing, in accordance with the regulations, a patent request and such other documents as are prescribed. Under s 31, two or more persons may make a joint application.
On the face of it, there seems to be some overlapping between ss 32 and 36(1) of the Act, as both sections deal with the issue of who are interested persons in relation to an invention. Those sections provide relevantly as follows.
32. Disputes between applicants etc.
If a dispute arises between any 2 or more interested parties in relation to a patent application whether, or in what manner, the application should proceed, the Commissioner may, on a request made in accordance with the regulations by any of those parties, make any determinations the Commissioner thinks fit for enabling the application to proceed in the name of one or more of the parties alone, or for regulating the manner in which it is to proceed, or both, as the case requires.
...
36. Other applications by eligible persons
(1) If:
(a) a patent application has been made and, in the case of a complete application, the patent request and complete specification have not been accepted; and
(b) an application for a declaration by the Commissioner is made by one or more persons (the section 36 applicants) in accordance with the regulations; and
(c) the Commissioner is satisfied, in relation to an invention disclosed in the specification filed in relation to the application for the patent:
(i)that the nominated person is not an eligible person, but that the section 36 applicants are eligible persons; or
(ii)that the nominated person is an eligible person, but that the section 36 applicants are also eligible persons;
the Commissioner may declare in writing that the persons who the Commissioner is satisfied are eligible persons are eligible persons in relation to the invention as so disclosed.
...
(4) If a complete application is made under section 29 by one or more of the declared persons, the priority date of the claims of a patent for the invention granted to the person, or persons, as the case may be, must be determined under the regulations.
Regulation 3.8(d) of the Patents Regulations 1991 (Cth) (the Regulations) provides as follows:
Time within which applications are to be made following certain decisions and declarations
An application under section 29 of the Act must be made:
...
(d) in the case of an application of the kind described in section 36 of the Act – within 3 months of the declaration of the Commissioner under subsection 36(1) of the Act.
The expression “interested party”, in relation to a patent application, is defined in Schedule 1 of the Act to mean the applicant or a joint applicant, or a person who claims to be entitled to the grant of a patent on the application, either alone or jointly with another person. The expression of “eligible person”, in relation to an invention, is defined in Schedule 1 to mean a person to whom a patent for the invention may be granted under s 15. Section 15 makes provision for who may be granted a patent and includes the inventor (as well as persons deriving title from the inventor).
Under s 224(1) of the Act, and application may be made to this tribunal for review of various decisions of the Commissioner, including a decision under s 32. As mentioned above, there is no right of review by this tribunal of a declaration made under s 36(1), but under s 36(5), an appeal lies to the Federal Court of Australia against such a declaration.
CONSIDERATION
In reviewing a reviewable decision made by the Commissioner, this tribunal may exercise all of the powers and discretions that are conferred by the Act on the Commissioner, and stands in the Commissioner’s shoes.[4] The tribunal must conduct a hearing de novo, that is, hear the matter afresh, and must arrive at the correct or preferable decision on the material before it, and not by reference to the material before the delegate.[5] The focus of the review by this tribunal is not the correctness or otherwise of the decision under review, and there is no presumption that that decision is correct. Further, the decision-maker may seek to support the decision on grounds that are different from those upon which it was originally made, and equally an applicant may seek to have the decision set aside on grounds that are different from those originally put to the decision-maker.[6]
[4] Shi v Migration Agents Registration Authority (2008) 235 CLR 286.
[5] Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60 and Shi.
[6] Re Lavery and Registrar, Supreme Court (Qld) [No.2] (1996) 23 AAR 52 at 56.
In considering the submissions of each party in relation to the matters raised by the Commissioner, I bear in mind that proceedings in this tribunal are administrative proceedings, and where (as in the present matter) the relevant legislation does not impose, expressly or by implication, an onus of proof, neither party bears such an onus.[7] However, it remains necessary for a party asserting facts to adduce evidence which would support a finding by the tribunal that those facts exist, since as a matter of common sense, if there is no such evidence, the finding cannot be made. This proposition was clearly explained by SM Todd in Re Eckersley and Minister for Capital Territory as follows:
I think that this is an instance in which, while no general responsibility of proof rests upon an applicant in an application to the Tribunal for review … yet, when either party to such an application raises a specific fact for consideration, a situation can arise in which the responsibility of proving the existence of that fact must be accepted as falling upon the party who asserts its existence, in particular where that fact is, or has been, peculiarly within his own knowledge. [8]
[7] Bushell v Repatriation Commission (1992) 175 CLR 408 at 425 per Brennan J.
[8] (1979) 2 ALD 303 at [18].
Similarly, in McDonald v Director General of Social Security,[9] Woodward J said:
(The AAT) must act on the material which is before it but, as I have already pointed out, it is not bound by rules of evidence and may inform itself on any matter in such manner as it thinks appropriate.
It is true that facts may be peculiarly within the knowledge of a party to an issue, and a failure by that party to produce evidence as to those facts may lead to an unfavourable inference being drawn – but it is not helpful to categorise this common-sense approach to evidence as an example of an evidential onus of proof. The same may be said of a case where a good deal of evidence pointing in one direction is before the Tribunal, and any intelligent observer could see that unless contrary material comes to light that is the way the decision is likely to go. Putting such cases to one side there can be no evidential onus of proof in proceedings before the AAT unless the relevant legislation provides for it, and in the present case the Social Security Act 1947 (Cth) does not.
[9] (1984) 1 FCR 354 at 358.
The relationship between ss 32 and 36(1)
At an earlier stage of the proceedings, I was concerned that because this tribunal had no jurisdiction to review the delegate’s declaration under s 36(1) of the Act, the tribunal decision on the review of the delegate’s determination under s 32 would have no practical utility. I was mindful that in a recent case, the tribunal said that these two sections of the Act potentially deal with resolving disputes relating to entitlement, and said that it was not entirely clear how ss 32 and 36 interact when a question concerning entitlement to be granted a patent arises as part of an issue concerning the parties to a patent application.[10] I accordingly asked the Australian Government Solicitor, who is representing the Commissioner of Patents, to provide a submission on the extent of the Commissioner’s powers under ss 32 and 36 of the Act, and the practical utility of any review undertaken by the tribunal of the delegate’s determination under s 32 of the Act in view of the declaration under s 36(1), which could not be the subject of an application for review by this tribunal, and was not the subject of an appeal to the Federal Court.
[10] Re Lee and Commissioner of Patents and Komipharm International Co., Ltd (joined party) [2011] AATA 818 at 14.
Mr Andrew Schatz from the Australian Government Solicitor helpfully summarised the Commissioner’s position as follows:
The Respondent submits that her power to make a determination under s 32 is independent of her power to make a declaration under s 36 of the Act. The factual matrix underpinning a determination under s 32 would normally be expected to lead to a consistent declaration under s 36. However, if an application is made under s 32 after a declaration has been made under s 36, and different evidence is submitted in support of that application, the Respondent considers that she would not be bound to ensure that her s 32 determination is consistent with the s 36 declaration made earlier.
The Commissioner’s submission went on to state that the effect of a declaration under s 36 is explained in s 36(4) and regulation 3.8(d). That is, a successful s 36 applicant can make a new patent application under s 29 of the Act that takes the priority date of the original application, provided the new application is made within three months of the s 36 declaration. An s 36 declaration is therefore a procedural requirement to enable a new patent application to gain an earlier priority date, but it has no other effect.
The Commissioner further acknowledged that if the tribunal in the present matter makes a determination under s 32 that the patent application should proceed in the names of Mr Wake and the Other Party jointly, the Commissioner could give effect to that determination by recording a change in the name of the applicant in the records of the Patent Office. If the Commissioner did this, she would also ask Mr Wake and Cavitus to supply a single address for service of documents, and a single address for all future correspondence, and Mr Wake and Cavitus would also need to jointly correspond with the Commissioner about the patent application. The Commissioner would not consider any such change to the records of the Patent Office to conflict with the earlier s 36 declaration, because that declaration merely gave Cavitus a right to file a new application under s 29 of the Act claiming priority from the earlier patent application, but that right had not been exercised.
The Commissioner’s submission further explained that when examining a patent application, the Commissioner must be satisfied of the entitlement of the applicant, and can report on any entitlement that has not been established. The Commissioner can also refuse to accept an application if a ground of objection has not been overcome.[11] However, the Commissioner must accept an application if all grounds of objection have been overcome.[12] If the tribunal determines under s 32 of the Act that the Application should proceed in the names of Mr Wake and Cavitus jointly, the Commissioner could simply proceed with the application on that basis, and the presence of an earlier declaration under s 36, based on different evidence, would not be regarded as an impediment to acceptance of the Application.
[11] s 49(2) of the Act.
[12] s 49(1).
I consider that the above submissions correctly reflect the intended operation of ss 32 and 36 of the Act, and I am satisfied that there will be practical utility in the tribunal determining the within proceedings.
Are the proceedings frivolous or vexatious
In Re Filsell and Comcare[13], I summarised a number of principles derived from the authorities as to how applications for dismissal under s 42B of the AAT Act should be approached. I said in that case at [33] (omitting citations):
“(a) The word “frivolous” in combination with “vexatious” is a technical legal term, which means that there is no legal basis for the proceedings; it does not necessarily connote that an applicant has acted frivolously in bringing proceedings … .
(b) The expression “vexatious” can include proceedings brought with the intention of annoying or embarrassing or harassing the other party, or for some collateral purpose other than having the court or tribunal adjudicate on the issues raised by the proceedings, or, irrespective of the motive of the litigant, if the proceedings are “so obviously untenable or manifestly groundless as to be utterly hopeless” … or if the proceedings have “no reasonable prospect at all of success” …
(c) The power of the tribunal to dismiss proceedings under s 42B is a power that should be used cautiously. Unless the tribunal is satisfied that the application is frivolous or vexatious in the sense referred to in subparagraphs (a) and (b) above, an applicant should not be denied the right to have the tribunal review the decision in issue on the merits, by conducting a hearing de novo and considering the evidence that the applicant can properly adduce at that hearing … .
(d) However, if proceedings have no reasonable prospect at all of success, they should be dismissed under s 42B, since it would be futile for the proceedings to continue, and inappropriate to use the time and resources of this tribunal, and to put the respondent to the expense that would be involved in the matter proceeding to a hearing.
(e) Conversely, applications to dismiss under s 42B should not be made except in appropriate cases, since otherwise the parties will be put to additional expense, the tribunal’s time and resources will be wasted, and the tribunal’s ability to provide a mechanism of review that is fair, just, economical, informal and quick (as required by s 2A of the AAT Act) will be impeded.”
[13] (2009) 109 ALD 198
The delegate included in his decision a very helpful summary of authorities dealing with the law on inventorship.[14] He refers in particular to the principle that a co-inventor’s role could occur at any stage in the development of the invention, so that where one person makes an initial step leading towards the invention and his or her work is taken up and finalised by another, both may be considered to have jointly contributed to the invention.[15]
[14] See paragraphs 53-60 of the delegate’s decision.
[15] See paragraph 55 of the delegate’s decision.
The various inventive steps that were involved in the development of the sheath concept, and the precise role which each person played in that development have not at this stage been the subject of detailed evidence. On the material before me, I appreciate the force of Cavitus’ contention that the sheath concept involves certain important features which Mr Wake frankly concedes form no part of the joint endeavours in which he engaged with Mr McLoughlin. Nevertheless, on the material provided by Mr Wake, he was the inventor of the KIS invention and was jointly involved in incorporating the use of a bladder in conjunction with the KIS invention with the objective of increasing the efficiency of the cavitational energy of the sonotrode. In these circumstances, I am not satisfied that the application for review has no reasonable prospect of success, and I have concluded that Mr Wake should not be denied the right to have the delegate’s decision reviewed by conducting a hearing in this tribunal in the usual way.
Mr Wake, who is self-represented, has filed voluminous documentary material in the proceedings to date. As at presently advised, it seems to me that much of this material will not be relevant to the issues that will arise for determination. Further, some of the material which Mr Wake has filed indicates that further evidence of matters he asserts can be made available at the hearing. I will accordingly arrange a further directions hearing shortly with a view to defining the issues in this matter, and identifying the documents that will be relevant and required in order for this matter to be set down for hearing..
DECISION
The tribunal refuses the respondent’s application to dismiss the application for review pursuant to s 42B of the AAT Act.
I certify that the preceding 36 (thirty -six) paragraphs are a true copy of the reasons for the decision herein of
Deputy President D G Jarvis... [Signed] ...
Associate
Dated 3 October 2012
Date(s) of hearing 11 September 2012 Applicant In person Solicitors for the Respondent Excused from attending hearing Advocate for the Other Party Dr D Angus Solicitors for the Other Party Collison & Co
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