Intellectual Property Development Corporation Pty Ltd v Malina Schinder and Adrian Schindler
[2016] ATMO 103
•14 November 2016
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by Intellectual Property Development Corporation Pty Ltd to application under section 92 of the Act by Malina Schindler and Adrian Schindler to remove trade mark number 1246124(32) - TERRY'S MOUNTAIN (and DEVICE) - in the name of Intellectual Property Development Corporation Pty Ltd
| Delegate: | Adrian Richards |
| Representation: | Opponent: Chris Round of K&L Gates Applicant: Shauna Ross of Counsel instructed by Higgins Lawyers |
| Decision: | 2016 ATMO 103 Trade Marks Act 1995 (Cth) – section 96 opposition – section 92(4)(b) application for removal of a trade mark successful – use found to be with additions substantially affecting the identity of the trade mark – use not established – Registrar’s discretion not applied – trade mark to be removed |
Background
On 21 August 2014, Malina Schindler and Adrian Schindler (‘the Removal Applicants’) filed an application for removal of registered trade mark number 1246124 (‘the Trade Mark’) for all goods, under s 92(4)(b) of the Trade Marks Act 1995 (Cth) (‘the Act’). The details of the Trade Mark relevant to this decision are set out below:
Trade Mark:
Specification of goods: Class 32: Beer
Registered from: 12 June 2008
The application for removal (‘the Application’) was advertised in the Australian Official Journal of Trade Marks on 28 August 2014. The registered owner of the Trade Mark, Intellectual Property Development Corporation Pty Ltd (‘the Removal Opponent’) filed a notice of intention to oppose the Application on 24 October 2014, followed with a statement of grounds and particulars on 12 November 2014. Having received a copy of the statement of grounds and particulars, the Removal Applicant filed a notice of intention to defend its application for removal on 9 December 2014.
Over the course of 2015, evidence in support, answer and reply were filed in accordance with reg 9.16 of the Trade Marks Regulations 1995 (Cth) (‘the Regulations). The Registrar of Trade Marks (‘the Registrar’) then invited the parties to request to be heard on the opposition, or to file written submissions. Both parties asked to be heard in person, and a hearing was set down for Canberra on 29 July 2016.
I heard this opposition as a delegate of the Registrar. Shauna Ross of Counsel, instructed by Higgins Lawyers appeared on behalf of the Removal Applicants. Appearing for the Removal Opponent was Chris Round of K&L Gates.
At the hearing, in the context of submissions relating to the Registrar’s discretion to allow a trade mark which has not been used to remain on the Register, Mr Round referred to a case which had not been raised in the Removal Opponent’s outline of submissions, namely, CUB Pty Ltd v Elixir Signature Pty Ltd.[1] Ms Ross indicated that she did not have notice to prepare submissions on Elixir and asked for an opportunity to make supplementary submissions after the hearing. I allowed the Removal Applicant a week to provide those supplementary submissions, which it filed accordingly.
[1] [2013] ATMO 74 (‘Elixir’).
Legislative framework
Part 9 of both the Act and Regulations set out most of the regime for the removal of trade marks from the Register of Trade Marks (‘the Register’). The provision invoked by the Removal Applicants is s 92(4)(b), which I have reproduced in its context below:
92 Application for removal of trade mark from Register etc.
(1)Subject to subsection (3), a person may apply to the Registrar to have a trade mark that is or may be registered removed from the Register.
…
(4)An application under subsection (1) or (3) (non-use application) may be made on either or both of the following grounds, and on no other grounds:
…
(b) that the trade mark has remained registered for a continuous period of 3 years ending one month before the day on which the non-use application is filed, and, at no time during that period, the person who was then the registered owner:
(i)used the trade mark in Australia; or
(ii)used the trade mark in good faith in Australia;
in relation to the goods and/or services to which the application relates.
Note 1: For file and month see section 6.
Note 2:If non-use of a trade mark has been established in a particular place or export market, then instead of the trade mark being removed from the Register, conditions or limitations may be imposed under section 102 on the registration of the trade mark so that its registration does not extend to that place or export market.
…
Since this application for removal was filed on 21 August 2014, the Removal Applicants allege that the Trade Mark was not used, or was not used in good faith, in Australia, during a three year period ending on 21 July 2014 (‘the Relevant Period’).
Section 100(1)(c) of the Act places the onus on the Removal Opponent to rebut the Removal Applicants’ allegation. Section 100(3) provides the bases upon which the rebuttal can be made. The relevant parts of s 100(3) are set out below:
100 Burden on opponent to establish use of trade mark etc.
…
(3)For the purposes of paragraph 1(c), the opponent is taken to have rebutted the allegation that the trade mark has not, at any time during the period referred to in that paragraph, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services if:
(a) the opponent has established that the trade mark, or the trade mark with additions or alterations not substantially affecting its identity, was used in good faith by its registered owner in relation to those goods or services during that period; or
…
Note 1:If the registered owner of the trade mark has authorised another person to use it, any authorised use of the trade mark by that person is taken to be a use of the trade mark by the registered owner (see subsection 7(3)).
Note 2: For registered owner see section 6.
For the purposes of s 100(3)(a), the use must be genuine commercial use, but does not require an actual sale of the product.[2] A single bona fide use of the Trade Mark during the Relevant Period may be sufficient basis for a rebuttal.[3] The standard of proof is the ordinary civil standard of the balance of probabilities.[4]
[2] Imperial Group Ltd v Philip Morris & Co [1982] FSR 72.
[3] Woolly Bull Enterprises Pty Ltd v Reynolds (2001) 107 FCR 166.
[4] Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, [133]; Pfizer Products Inc. v Karam (2006) 219 FCR 585, 594 [26].
Use of a trade mark is in part described in s 7 of the Act:
7 Use of trade mark
(1)If the Registrar or a prescribed court, having regard to the circumstances of a particular case, thinks fit, the Registrar or the court may decide that a person has used a trade mark if it is established that the person has used the trade mark with additions or alterations that do not substantially affect the identity of the trade mark.
Note: For prescribed court see section 190.
(2)To avoid any doubt, it is stated that, if a trade mark consists of the following, or any combination of the following, namely, any letter, word, name or numeral, any aural representation of the trade mark is, for the purposes of this Act, a use of the trade mark.
(3)An authorised use of a trade mark by a person (see section 8) is taken, for the purposes of this Act, to be a use of the trade mark by the owner of the trade mark.
(4)In this Act:
use of a trade mark in relation to goods means use of the trade mark upon, or in physical or other relation to, the goods (including second‑hand goods).
(5)In this Act:
use of a trade mark in relation to services means use of the trade mark in physical or other relation to the services.
Questions of what is ‘authorised use’ and who is an ‘authorised user’ of the Trade Mark were raised during the prosecution of this opposition. As mentioned in s 7(3) above, these terms are defined in s 8 of the Act:
8 Definitions of authorised user and authorised use
(1) A person is an authorised user of a trade mark if the person uses the trade mark in relation to goods or services under the control of the owner of the trade mark.
(2) The use of a trade mark by an authorised user of the trade mark is an authorised use of the trade mark to the extent only that the user uses the trade mark under the control of the owner of the trade mark.
(3) If the owner of a trade mark exercises quality control over goods or services:
(a)dealt with or provided in the course of trade by another person; and
(b)in relation to which the trade mark is used;
the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner.
(4) If:
(a)a person deals with or provides, in the course of trade, goods or services in relation to which a trade mark is used; and
(b)the owner of the trade mark exercises financial control over the other person’s relevant trading activities;
the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner.
(5) Subsections (3) and (4) do not limit the meaning of the expression under the control of in subsections (1) and (2).
Evidence
The evidence filed during this opposition consists of:
Evidence in Support
Statutory declaration of Philip Craig Withers, director of the Removal Opponent, made 2 April 2015 with exhibits PCW-1 to PCW-3 and confidential exhibit PCW-4 (‘Withers 1’).
Evidence in Answer
Statutory declaration of Malina Schindler, owner of Zig Zag Brewery, made 25 August 2015 with exhibits MS-1 to MS-3 (‘Schindler’).
Evidence in Reply
Statutory declaration of Philip Craig Withers, director of the Removal Opponent, made 30 November 2015 with exhibit PCW-5 (‘Withers 2’).
Withers 1 introduces International Consolidated Business Pty Ltd (‘ICB’), an entity that Mr Withers claims is an authorised user of the Trade Mark. He does this by declaring that the Removal Opponent and ICB are each members of a group of companies, referred to in the declaration as the ‘ICB Group’. Mr Withers declares that he ‘is a director of each of the companies in the ICB Group’,[5] and that the Removal Opponent ‘holds much of the intellectual property of the ICB Group’.[6] He states that it is ICB that both ‘ultimately owns’ a business called Thunder Road Brewery and is licensed to use the Trade Mark by the Removal Opponent.[7] A copy of the license agreement has been included in evidence as exhibit PCW-1.
[5] Withers 1, 1 [3].
[6] Ibid.
[7] Withers 1, 3 [14].
The Removal Opponent seeks to rely upon evidence of the sale of beer in relation to the Trade Mark at the Thunder Road Brewery to demonstrate that the Trade Mark has been used. In particular, exhibits PCW-2 and PCW-3 are photographs taken on 19 June 2013 at the Thunder Road Brewery, showing the Trade Mark (with additions) affixed to a tap lens and to bottles (reproduced below). Mr Withers declares that the bottles of the kind pictured ‘are principally given away and not sold’.
(‘PCW-2’)
(‘PCW-3’)
PCW-2 shows two variants of the Trade Mark with additions and alterations. I will refer to the green variant that appears on the tap lens as ‘the Pale Ale Trade Mark’, and the red variant on the bottle as ‘the Sparkling Ale Trade Mark’. PCW-3 shows the two variants from PCW-2, along with a third blue variant which I will call ‘the Lithgow Lager Trade Mark’.
Confidential exhibit PCW-4 supports a finding that use of the Sparkling Ale Trade Mark has occurred during the Relevant Period.
Withers 1 also asserts that there were beer sales that occurred in the Relevant Period in relation to the Trade Mark when customers at Thunder Road Brewery ordered pots or schooners, but concedes that no separate sales figures have been provided.
Schindler sets out the Removal Applicants’ portfolio of registered trade marks, mentions that they are currently prosecuting trade mark application no. 1648372 (image below), indicates that the Trade Mark is preventing registration of said application, and observes that use of the Trade Mark detailed in Withers 1 ‘is limited to the Thunder Road Brewery located in Brunswick, Victoria’.
(‘the Removal Applicants’ Trade Mark’)
The reason the Trade Mark and the Removal Applicants’ Trade Mark are so strikingly similar was hinted at in the 22 September 2010 decision of a delegate of the Registrar in relation to registration of the Trade Mark. An entity called ‘Terry’s Brewery’ used the Trade Mark during the 1940s and 1950s, ceasing in about 1958. Neither the Removal Opponent nor the Removal Applicant claim to have any relationship with Terry’s Brewery, but it appears that both seek to market goods under trade marks that have been inspired by some of the old Terry’s Brewery intellectual property. However, nothing in particular turns on this point.
Withers 2 is chiefly concerned with rebutting the comments in Schindler on localised use. To this end, Mr Withers emphasises that the contents of a growler[8] will be consumed outside of the Thunder Road Brewery, and introduces evidence that the Trade Mark has appeared periodically on the Thunder Road Brewery website. The declaration also annexes website print outs dated 25 November 2015, which Mr Withers declares are ‘representative of the use during the [R]elevant [P]eriod’. The relevant trade marks which appear on these pages are circular rather than oval, but in all other respects share the same appearance as the Pale Ale Trade Mark, the Sparkling Ale Trade Mark and the Lithgow Lager Trade Mark. However, Mr Withers’ assertion as to the appearance of the website during the Relevant Period falls short of the conclusive proof that would establish use.
[8] Mr Round explained at the hearing that a growler is a reusable beer jug which is typically filled from a beer tap and taken away from the premises for later consumption.
As well as dealing with use/authorised use, Withers 1 and Withers 2 also declare that the Trade Mark has continued to be used since the removal application was filed, it remains part of the Removal Opponent’s business plan in Australia, it has a loyal customer base and is considered to be an important asset.
Submissions
Under reg 9.20(5), the Removal Opponent was required to file its summary of submissions first. The summary discusses all of the evidence, characterising Withers 1 and Withers 2 as providing ‘conclusive proof of the use of the Trade Mark’, while picking up on the language of Schindler, which appears to concede that the Trade Mark has been used. The Removal Opponent’s submissions conclude with a discussion of the principles relating to the discretion to allow a trade mark to remain on the Register where use has not been established.
The final document filed in preparation for the hearing was the Removal Applicants’ summary of submissions. It is within these pages the nub of the dispute finally comes to light. The main argument therein is that even if use by Thunder Road Brewery is established, this is not use by an authorised user. The submissions in this regard follow two lines. The first points to vagaries in the Removal Opponent’s evidence on the ownership and control of the various corporate entities mentioned, and the second to inadequacies in the license agreement. The Removal Applicants’ submissions also question whether the examples of use put forward by the Removal Opponent are in relation to the goods, and whether they are of the Trade Mark.
It is unfortunate that the hearing was the first opportunity for the Removal Opponent to address what the Removal Applicants refer to as their ‘primary submission’. That said that this state of affairs is due to the statutory process as it stands, and not the actions of either party. The Regulations prescribe the order in which the parties are to present their evidence and submissions. At any rate, as a result of this, much of the hearing was taken up with discussion of authorised use and authorised user. As mentioned earlier, the Removal Applicants with my permission also filed submissions on the Registrar’s discretion after the hearing.
Discussion
Based on the sworn declaration of use appearing in Withers 1, which is corroborated by sales figures in PCW-4 and examples of use in PCW-2 and PCW-3, I am satisfied that growlers of beer were likely offered and sold at the Thunder Road Brewery throughout the Relevant Period in relation to the Sparkling Ale Trade Mark. I have not been similarly satisfied that the Removal Opponent has demonstrated use of the Pale Ale Trade Mark or the Lithgow Lager Trade Mark. The evidence from Mr Withers in relation to the latter two trade marks is an assertion that bottles bearing those trade marks have been given away to employees of the ICB Group. Whilst free distribution can in some circumstances amount to use of a trade mark, giving these products to employees in the manner described does not appear to have been for the purpose of trade. My discussion below therefore deals with the Removal Applicant’s arguments as to why it claims this demonstrated use of the Sparkling Ale Trade Mark was not use of the Trade Mark.
Use of the Trade Mark
As I have pointed out during my discussion of the evidence, the only examples of trade mark use put forward by the Removal Opponent are uses of the Trade Mark with additions and alterations. I must therefore be satisfied that the additions and alterations do not substantially affect the identity of the Trade Mark. The test to be applied here is whether there is substantial identity between the Trade Mark and the Sparkling Ale Trade Mark:[9]
In considering whether marks are substantially identical they should, I think, be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison.[10]
[9] Link Recruitment Pty Ltd v Link Employment And Training Inc (2006) 69 IPR 614, 619 [21]-[22].
[10] Shell Co (Aust) Ltd v Esso Standard Oil (Aust) Ltd (1963) 109 CLR 407, 414.
To assist the side by side comparison I have reproduced the Trade Mark and the Sparkling Ale Trade Mark below:
The similarities are reasonably obvious, but for ease of reference I will list them. Both trade marks are oval with a narrow lighter outer annulus surrounding a darker oval, they contain the words TERRY’S and MOUNTAIN, they include the same drawing of a waterfall surrounded by trees and a mountain in the background, in both trade marks the drawing is laid on top of five horizontal stripes which in turn are adorned with two five pointed stars.
Turning to the differences, beginning with alterations, the words that are in common are not in the same font. In the Trade Mark, the letters in the word TERRY’S are of irregular thickness, giving them a hand drawn appearance. In contrast, the letters of TERRY’S in the Sparkling Ale Trade Mark are generally bolder and are of a more uniform thickness, such that they appear to be typeset. MOUNTAIN is relatively closer in appearance, but there are still several differences in the detail. For example, in the Trade Mark the positioning of the cross on the letter ‘t’ is lower, the ‘o’ and ‘a’ are both drawn with an incomplete loop, and the letters ‘u’ and ‘n’ have sharper curves when compared with their equivalents in the Sparkling Ale Trade Mark.
Another alteration is the shape of the stars. In the Sparkling Ale Trade Mark all of the points of both stars appear to be the same length. In contrast, the stars in the Trade Mark are irregular, with the lower two points appearing longer and the top point shorter than the rest.
Turning to additions, the lower half of the Sparkling Ale Trade Mark is filled with additional text. ‘SPRING’ and ‘SPARKLING ALE’ are the largest of the additions. Appearing in black text on the red portion of the label beneath ‘SPARKLING ALE’ is the following:
BREWED & BOTTLED UNDER LICENSE
WITH THE FINEST MALT, HOPS AND
PURE WATER BY
TERRY’S MOUNTAIN SPRING
BEER COMPANY
5.2% ALC/VOL 330ml
The text appearing in the lower quadrant of the white annulus reads: ™ INTELLECTUAL PROPERTY DEVELOPMENT CORPORATION PTY LTD © 2008.
The Removal Applicant submits that this additional text is dominant, and together with the altered font used in the words TERRY’S and MOUNTAIN substantially affect the identity of the Trade Mark. The Removal Opponent’s submits that none of these additions or alterations substantially affect the identity of the Trade Mark. More specifically, with regard to the additions, Mr Round argued that the upper half of the label contains the trade mark matter, and the material in the lower half is merely descriptive.
I consider the alterations I have described above to be very minor and as such are insufficient to affect the identity of the Trade Mark. As for the additions, Mr Round’s submission that the extra text is descriptive is I think true for much of that text. There is, however, one additional word which is problematic for the Removal Opponent. The word ‘SPRING’ appears twice on the label and in both instances attaches itself to the trade source.
The first appearance is very large, altering the reading of the textual elements of the Trade Mark so it would no longer be read as TERRY’S MOUNTAIN, but as TERRY’S MOUNTAIN SPRING. The term ‘mountain’ conveys a rather different concept to the term ‘mountain spring’. In the context of the landscape depicted on the label, TERRY’S MOUNTAIN SPRING is likely to be associated with the stream and waterfall, and TERRY’S MOUNTAIN with the white peak in the background. This is not to say the landscape is an ‘illustration of the word[s]’,[11] but simply that it contains a number of different visual elements that serve to emphasise the conceptual difference between a mountain and a mountain spring.
[11] E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2010] HCA 15, 170 [69].
In referring to the beer as having been ‘BREWED AND BOTTLED BY … TERRY’S MOUNTAIN SPRING BEER COMPANY’, the second appearance of the word ‘SPRING’ on the Sparkling Ale Trade Mark only serves to reinforce the notion that the trade source is something called TERRY’S MOUNTAIN SPRING.
On this basis, I find that the Trade Mark and the Sparkling Ale Trade Mark are not substantially identical. It follows that the examples of use of the Sparkling Ale Trade Mark which have been forward are not use of the Trade Mark. There being no other examples of use purporting to be of the Trade Mark during the Relevant Period, I am left to conclude that the Removal Opponent has failed to discharge its onus under s 100(3)(a). I therefore find that the ground for removal under s 92(4)(b) has been established.
Authorised Use
As mentioned above, the Removal Applicants’ main arguments at the hearing related to authorised use. Ms Ross raised concerns about the adequacy of the licence agreement as evidence of control, and vagaries around the explanations offered as to how the use of the Sparkling Ale Trade Mark at Thunder Road Brewery relates back to the Removal Opponent. Mr Round in response sought to highlight the fact that Mr Withers is a director of both the Removal Opponent and ICB, urging that use of the Trade Mark would instinctively accord with the wishes of the Removal Opponent.[12] Given my finding that the evidence does not show use of the Trade Mark, it is not necessary to explore these issues in any further detail.
[12] Ibid, [98].
Discretion
Despite my above finding that grounds for removal of the Trade Mark have been established, s 101(3) grants the discretion allow it to remain on the Register:
If satisfied that it is reasonable to do so, the Registrar or the court may decide that the trade mark should not be removed from the Register even if the grounds on which the application was made have been established.
The nature of the discretion has been described as ‘a broad one, subject to no express fetters, and constrained only in its exercise by the subject-matter, scope and purpose of the Act and Pt 9 in particular’.[13] These constraints alluded to in the previous excerpt have been characterised in the following terms:
The purpose of Part 9 is to provide for the removal of unused trade marks from the Register. In that regard it is plainly designed to protect the integrity of the Register, and in this way, the interests of the consumer. At the same time, however, it seeks to accommodate, where reasonable, the interests of the registered trade mark owners. Otherwise, there would be no need for the discretion.[14]
[13] Dick Smith Investments Pty Ltd v Ramsey [2016] FCA 939, [180].
[14] Austin, Nichols & Co Inc v Lodestar Anstalt [2012] FCAFC 8, [38].
The onus falls on the Removal Opponent to make out the case for an exercise of the discretion:
…as s 101(3) makes clear, the court (or the registrar, as the case might be) may only decide that the trade mark should not be removed from the register “if satisfied that it is reasonable to do so”. This requires, in my view, the court (or the registrar) to be positively satisfied of that condition. In my view it is the opponent for removal who bears the burden of persuasion on that issue.[15]
[15] Optical 88 Limited v Optical 88 Pty Limited (No. 2) (2010) 275 ALR 526, 580 [273]
In support of an exercise of the discretion, the Mr Withers has declared that:
·The Removal Opponent has used and intends to continue to use the Trade Mark
·The Trade Mark is ‘an important asset’ of the Removal Opponent and the ICB Group
·The Trade Mark is ‘part of [the Removal Opponent’s] business plan in Australia’
·‘Goods sold by reference to the Trade Mark have a devoted following amongst fans of the Thunder Road Brewery.’
·‘The private interests of the ICB Group would be greatly impacted if the Trade Mark was removed’
As I have found above, use of the Trade Mark is not demonstrated in the evidence, and the evidence fails to link use of the Sparkling Ale Trade Mark to the Removal Opponent. Given this, the first four bullet points above are not well supported.
The fifth bullet point also lacks support. The evidence provides no information around the structure of the so-called ICB Group. Perhaps the removal of the Trade Mark would greatly impact the ‘private interests’ (whatever they may be) of the ICB Group. However, the doctrine of separate legal identity which is central to corporations law in Australia means that the Removal Opponent would have to clearly demonstrate, in fact and in law, why the various bodies corporate to which Mr Withers has referred in his evidence should be taken as a whole.[16]
[16] See, eg, Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692, 694-5.
As discussed above, the Removal Opponent has offered very little insight into how the ownership and control of the various corporate entities named in the evidence have been structured, and even less about the various business names that appear in the evidence. The submissions amount to an unsupported declaration that Mr Withers is a director of each of the companies in the supposed group. On this basis it is not possible to form a view as to how the private interests of the membership of the ICB Group, or the group as a whole (if indeed it could be established that the interests of that group are in alignment), might be impacted.
The Removal Opponent has failed to satisfy me of the public interest or other circumstances which would make it reasonable to exercise the discretion to allow the Trade Mark to remain on the Register, and I decline to do so.
Decision
I direct that trade mark 1246124 be removed from the Register one month from the date of this decision. If the Registrar is served with a notice of appeal of this decision before that time, I direct that removal shall not occur until the appeal has been withdrawn or discontinued. Otherwise the disposition of the application should be in accordance with the Court’s order or direction.
Costs
The Removal Applicant has requested an award of costs. The ordinary rule is that costs follow the event.[17] I see no reason to depart from the normal course in the present case, and so award costs against the Removal Opponent in accordance with the official scale.[18]
[17] Milne v Attorney-General (Tas) (1956) 95 CLR 460.
[18] Trade Marks Regulations 1995 (Cth), sch 8.
Adrian Richards
Hearing Officer
Oppositions and Hearings
Trade Marks and Designs Group
17 November 2016
Key Legal Topics
Areas of Law
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Intellectual Property
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Commercial Law
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