Katadyn North America, Inc. v. Black
Mountain Stores
Claim Number: FA0507000520677
PARTIES
Complainant,
Katadyn North America, Inc. (“Complainant”),
is represented by Miki Griffin of Leonard, Street and Deinard, P.A., 150 South Fifth Street, Suite 2300, Minneapolis, MN 55402. Respondent is Black Mountain Stores (“Respondent”), 1721 N. Texas, Odessa, TX
79761.
REGISTRAR AND DISPUTED DOMAIN NAME
The
domain name at issue is <katadyn.net>,
registered with Network Solutions, Inc.
PANEL
The
undersigned certifies that he has acted independently and impartially and to
the best of his knowledge has no known conflict in serving as Panelist in this
proceeding.
Honorable
Richard B. Wickersham, Judge (Ret.), as Panelist.
PROCEDURAL HISTORY
Complainant
submitted a Complaint to the National Arbitration Forum electronically on July
20, 2005; the National Arbitration Forum received a hard copy of the Complaint
on July 21, 2005.
On
July 22, 2005, Network Solutions, Inc. confirmed by e-mail to the National
Arbitration Forum that the domain name <katadyn.net>
is registered with Network Solutions, Inc. and that the Respondent is the
current registrant of the name. Network
Solutions, Inc. has verified that Respondent is bound by the Network Solutions,
Inc. registration agreement and has thereby agreed to resolve domain-name
disputes brought by third parties in accordance with ICANN’s Uniform Domain
Name Dispute Resolution Policy (the “Policy”).
On
July 26, 2005, a Notification of Complaint and Commencement of Administrative
Proceeding (the “Commencement Notification”), setting a deadline of August 15,
2005 by which Respondent could file a Response to the Complaint, was
transmitted to Respondent via e-mail, post and fax, to all entities and persons
listed on Respondent’s registration as technical, administrative and billing
contacts, and to postmaster@katadyn.net by e-mail.
A
timely Response was received and determined to be complete on August 12, 2005.
On
August 16, 2005, a timely Additional Submission from Complainant was
received.
On August 24, 2005, pursuant to Complainant’s request to
have the dispute decided by a single-member
Panel, the National Arbitration Forum
appointed Richard B. Wickersham, Judge (Ret.), as Panelist.
RELIEF SOUGHT
Complainant
requests that the domain name be transferred from Respondent to Complainant.
PARTIES’ CONTENTIONS
A.
Complainant
Complainant,
Katadyn North America, Inc., is a wholly-owned subsidiary of Katadyn Produkte,
A.G. (collectively, “Katadyn”).
Complainant is the world leader in portable water treatment
products. Since 1928, Katadyn of
Switzerland has manufactured and distributed high-quality water-treatment
products for use wherever safe drinking water is unavailable – for travel, camping,
and humanitarian operations. Katadyn
Produkte A.G. has subsidiaries in the United States, Germany, France, and
Singapore. Additional information about
Complainant’s products and humanitarian efforts may be found at its website at
the <katadyn.com> domain name.
Since
its inception in 1928, Complainant has continuously operated under the KATADYN
name, and has used the KATADYN mark in connection with its products. The KATADYN mark was first registered in the
United States in 1957. Over the years,
Complainant has devoted substantial resources and efforts to building goodwill
in the KATADYN mark and to distinguish Complainant’s products from all other
products in the same class.
Respondent
operates a website at the <katadyn.net> domain name. Via its web site, Respondent sells a variety
of products, including Complainant’s water purification products. Complainant, however, has no relationship
with, nor sponsorship of, Respondent’s site.
In
February 2005, Complainant contacted Respondent by telephone, requesting a
transfer of the <katadyn.net> domain name to Complainant,
and offering to post a link to Respondent’s website on Complainant’s official
site, located at <katadyn.com>.
Respondent refused. On March 15,
2005, Complainant sent a letter to Respondent asking Respondent to voluntarily
transfer the domain to Complainant, and offering to forgive Respondent’s
substantial debt. Respondent did not
reply.
B.
Respondent
Respondent,
Black Mountain Stores, is a sole proprietorship that made its first Katadyn
water filters purchase in June of 1998 from Suunto USA, the North American
distributor for Katadyn, Primus, Suunto and other European-made products. Suunto was the North American representative
for Katadyn products. In 1998, Complianant, Katadyn North America (KNA) had not
yet existed. Katadyn AG (Switzerland), the owner of the KATADYN name, had no
substantial presence in the United States. Katadyn North America was not an
entity in the United States until 2001.
Black
Mountain Stores incorporated in the State of Texas in January of 1999 to become
Black Mountain Stores, Inc (Respondent).
Respondent has a brick and mortar building at 1721 N Texas Ave, Odessa,
TX and operates from that location.
Respondent
understands that Complainant has devoted substantial resources and efforts
building goodwill in the KATADYN mark, and Respondent contends that they have
done the same. Respondent procured the
<katadyn.net> domain name on June 30, 1998 for the purpose of
driving Katadyn product sales. Garry Vaughn and Denise Hayward have been
with Respondent since it was incorporated. They were aware that if the search
term “katadyn” were in the URL, specifically, the domain name, the website
would be ranked at the top in the search engines. Along with a few other html
programming techniques, Respondent was able to get its website at <katadyn.net>
ranked highly in the major search engines.
Garry has previous experience with water filter technology and sales and
decided the Katadyn filters were the ones that Respondent was going to carry.
Sales skyrocketed. Respondent was ordering Katadyn water filters by the
truckloads. Respondent had not even considered the buying patterns of consumers
because of Y2K. In fact, consumers were purchasing water filters in anticipation
of the bottom falling out at the turn of the millennium. Respondent could not
get them fast enough and Katadyn AG (Switzerland) could not keep up with the
demand. Respondent had hundreds of backorders for customers waiting for Katadyn
water filters.
Respondent
procured the <survivalequipment.net> domain name in January
of 1999, in anticipation of the increased sales due to Y2K. Respondent started with Suunto and Primus
products on the new website; Complainant’s products were kept isolated on
another website at the <katadyn.net> domain name. Katadyn was the
only brand of water filter Respondent carried until the end of 1999. Respondent
was not able to get Katadyn filters due to the high demand worldwide; however,
Respondent had to service its customers. Respondent added the MSR line of water
filters to have another quality water filter available and only listed it at
the <survivalequipment.net> domain name. Katadyn was still Respondent’s
primary product and that is what Respondent focused on.
Respondent
does not dispute that it was contacted by Complainant (by telephone and by
letter), requesting a transfer of the <katadyn.net> domain
name to Complainant. Respondent refused. Complainant offered to forgive a
portion of Respondent’s debt. Until a few months ago, Respondent ordered
Katadyn products directly from Complainant. Because Respondent incurred debt
with Complainant, Complainant and Respondent mutually agreed that Respondent
would not be able to purchase Katadyn products directly from Complainant until
some of the debt could be paid down. Respondent has been making regular
payments towards debt reduction.
Respondent
currently does business with another Katadyn distributor. The Katadyn product
line is a major percentage of its business and there is a possibility that
Respondent would fail if the primary venue it uses to sell Katadyn products is
taken away. Since incorporating in 1999, Respondent has generated $1,025,623 in
sales of Katadyn products. This represents a very high percentage of Respondent’s
revenue. Furthermore, Respondent
ordered over $75,000 worth of Katadyn products from Suunto, the North American
distributor of Katadyn, in the second half of 1998.
Respondent
contends that Complainant has given Respondent authority and implied consent to
use the domain name to generate sales for Complainant. Complainant has assisted
Respondent in generating sales for them and has even expressed appreciation for
the sales Respondent has generated for them.
C.
Additional Submissions
Respondent’s
principle argument in its Response is that Complainant has impliedly consented
to Respondent’s use of the KATADYN trademark as Respondent’s domain name. Even if that were the case, however,
Complainant has clearly revoked any such implied consent. Respondent’s continued use of the KATADYN
mark, in the absence of an express authorization, creates a substantial
likelihood of confusion. Moreover, the
ever-expanding array of competitive products Respondent offers under
Complainant’s name clearly demonstrates that Respondent has no legitimate
interest in the domain name, and is using the domain name in bad faith. This Panel should, therefore, order the
immediate transfer of the domain name to Complainant.
Respondent
is correct in asserting that there is no requirement that a trademark license
be set forth in writing. In fact,
courts have repeatedly recognized that the existence of a trademark license may
be implied from the conduct of the parties.
See 2 J. McCarthy, Trademarks & Unfair Competition,
§ 18:43.1 (4th ed. 2004) (“McCarthy”).
See also Villanova Univ. v. Villanova Alumni Educ. Found., Inc., 123
F. Supp. 2d 293, 307 (E.D. Pa. 2000); Birthright v. Birthright Inc., 827 F. Supp. 1114, 1134 (D.N.J.
1993); Univ. Book Store v. Univ. of Wisc.
Bd. of Regents, 33 U.S.P.Q.2d 1385, 1396 (T.T.A.B. 1994); Bishops Bay Founders Group, Inc. v. Bishops
Bay Apartments, LLC, 301 F. Supp. 2d 901, 907 (E.D. Wisc. 2003).
Even
if Complainant had previously authorized Respondent to use the KATADYN mark as
a domain name, such prior authorization does not grant Respondent a legal right
to continue to do so once the implied license has been revoked. “To say that [a] licensee has acquired
rights that survive the legal termination of that license, destroys the entire
concept of a license.” U.S. Jaycees v. Philadelphia Jaycees,
639 F.2d 134, 143 (3rd Cir. 1981). A
licensee acquires no ownership interest through the use of licensed marks
regardless of the duration of such use.
McCarthy at § 18:52 (citing cases).
Accordingly, upon the termination of a license, a licensee is obligated
to discontinue use of the licensor’s mark.
See Bunn-o-matic Corp. v. Bunn
Coffee Service, Inc., 88 F. Supp. 2d 914, 921-22 (C.D. Ill. 2000).
An
implied license of no definite duration, such as the one Respondent argues was
created in this case, is terminable at will.
See Bunn-O-Matic Corp., 88 F. Supp.
2d at 922 (“A license containing no time frame is generally terminable at
will”); Villanova Univ., 123 F. Supp.
2d at 307-09 (finding implied license terminable at will despite 28 years of
use of mark by defendant); Birthright,
827 F. Supp. at 1135 (finding implied license terminable at will despite more
than 20 years of use by defendant); W.K.T.
Distrib. Co. v. Sharp Elects. Corp., 746 F.2d 1333, 1335 (8th Cir. 1984)
(agreements with no fixed term are terminable at will). Respondent
does not contend, and certainly has not demonstrated through any documentary
evidence, that Katadyn authorized Respondent’s use of the KATADYN mark as a
domain name for any definite term.
Accordingly, any license to use the mark as a domain was terminable at
will.
Complainant
terminated Respondent’s right to use the KATADYN mark in February 2005, when it
contacted Respondent requesting a transfer of the domain name. Respondent’s continued use of the mark is
without authorization and constitutes trademark infringement. This Panel should, therefore, order the
immediate transfer of the domain to Complainant. Panel agrees with this Additional Submission by Complainant.
DISCUSSION
Paragraph 15(a) of the Rules for Uniform Domain Name
Dispute Resolution Policy (the “Rules”) instructs this Panel to “decide a
complaint on the basis of the statements and documents submitted in accordance
with the Policy, these Rules and any rules and principles of law that it deems
applicable.”
Paragraph
4(a) of the Policy requires that the Complainant must prove each of the
following three elements to obtain an order that a domain name should be
cancelled or transferred:
(1)
the domain name
registered by the Respondent is identical or confusingly similar to a trademark
or service mark in which the Complainant has rights;
(2)
the
Respondent has no rights or legitimate interests in respect of the domain name;
and
(3)
the domain
name has been registered and is being used in bad faith.
FINDINGS
Complainant
argues that its registrations of the KATADYN mark with the United States Patent
and Trademark Office (“USPTO”) (Reg. No. 2,750,396 issued August 12, 2003; Reg.
No. 1,736,371 issued December 1, 1992; 649,935 issued August 13, 1957) are
sufficient to establish Complainant’s rights in the mark. See Innomed
Techs., Inc. v. DRP Servs., FA 221171
(Nat. Arb. Forum Feb. 18, 2004) (“Registration of the NASAL-AIRE mark with the
USPTO establishes Complainant's rights in the mark.”); see also Vivendi
Universal Games v. XBNetVentures Inc., FA 198803 (Nat. Arb. Forum Nov. 11,
2003) (“Complainant's federal trademark registrations establish Complainant's
rights in the BLIZZARD mark.”).
Complainant
contends that Respondent’s <katadyn.net> domain name is identical
to Complainant’s KATADYN mark. The
Panel finds that the addition of the generic top-level domain (gTLD) “.net” is
irrelevant for purposes of determining whether a domain name is identical to a
mark. See Rollerblade, Inc. v.
McCrady, D2000-0429 (WIPO June 25, 2000) (finding that the top level of the
domain name such as “.net” or “.com” does not affect the domain name for the
purpose of determining whether it is identical or confusingly similar); see
also Isleworth Land Co. v. Lost in Space, SA, FA 117330 (Nat. Arb. Forum
Sept. 27, 2002) (finding it is a “well established principle that generic
top-level domains are irrelevant when conducting a Policy ¶ 4(a)(i) analysis”).
The
Panel is aware that once Complainant makes a prima facie case in support of its allegations, the burden shifts
to Respondent to show that it does have rights or legitimate interests pursuant
to Policy ¶ 4(a)(ii). See Do The Hustle, LLC v. Tropic Web,
D2000-0624 (WIPO Aug. 21, 2000) (holding that, where the complainant has
asserted that the respondent has no rights or legitimate interests with respect
to the domain name, it is incumbent on the respondent to come forward with
concrete evidence rebutting this assertion because this information is
“uniquely within the knowledge and control of the respondent”); see also G.D. Searle v. Martin Mktg., FA
118277 (Nat. Arb. Forum Oct. 1, 2002) (“Because Complainant’s Submission
constitutes a prima facie case under
the Policy, the burden effectively shifts to Respondent.”).
Complainant
alleges that Respondent is not commonly known by the disputed domain name. The
Panel finds that Respondent is not commonly known by the disputed domain
name. The Panel concludes that
Respondent does not have rights or legitimate interests under Policy ¶
4(c)(ii). See Gallup, Inc. v. Amish Country Store, FA
96209 (Nat. Arb. Forum Jan. 23, 2001) (finding that the respondent does not
have rights in a domain name when the respondent is not known by the mark); see
also Compagnie de Saint Gobain v.
Com-Union Corp., D2000-0020 (WIPO Mar. 14, 2000) (finding no rights or
legitimate interest where the respondent was not commonly known by the mark and
never applied for a license or permission from the complainant to use the
trademarked name).
Complainant
avers that Respondent is not an authorized distributor and is not licensed to
use Complainant’s mark. The Panel finds
that without such authorization, Respondent lacks rights or legitimate
interests in the disputed domain name under Policy ¶ 4(a)(ii). See
Telstra Corp. v. Nuclear Marshmallows, D2000-0003 (WIPO Feb.18, 2000)
(finding (i) the fact that the complainant has not licensed or otherwise permitted
the respondent to use any of its trademarks, and (ii) the fact that the word
TELSTRA appears to be an invented word, and as such is not one traders would
legitimately choose unless seeking to create an impression of an association
with the complainant, demonstrate that the respondent lacks rights or
legitimate interests in the domain name); see
Hewlett-Packard Co. v. Burgar, FA 93564 (Nat. Arb. Forum Apr. 10, 2000)
(finding that the respondent has no rights or legitimate interests in the
<hewlettpackard.com> domain name, because the respondent is not a
licensed dealer of Hewlett-Packard products and has not demonstrated any right
except to declare that he is affiliated with a licensed re-seller of the
complainant’s products).
The
Panel also finds that Respondent’s sales of Complainant’s goods without
Complainant’s authority does not constitute a use in connection with a bona
fide offering of goods or services under Policy ¶ 4(c)(i) or a legitimate
noncommercial or fair use under Policy ¶ 4(c)(iii). See Nat’l Collegiate
Athletic Ass’n v. Halpern, D2000-0700 (WIPO Dec. 10, 2000) (finding that
domain names used to sell the complainant’s goods without the complainant’s
authority, as well as others’ goods, is not bona fide use); see also Chanel, Inc. v. Cologne Zone, D2000-1809
(WIPO Feb. 22, 2001) (finding that use of the complainant’s mark to sell the
complainant’s perfume, as well as other brands of perfume, is not bona fide
use).
Alternatively,
Complainant contends that even if Respondent is deemed to be an authorized
distributor, merely being a distributor does not confer rights or legitimate
interests to use Complainant’s mark under Policy ¶ 4(a)(ii). See Procter
& Gamble Co. v. Hlad, FA 126656 (Nat.
Arb. Forum Nov. 20, 2002) (“Respondent, merely a distributor of PUR brand
products, has no authorization to use the PUR mark for any trademark purpose,
such as the use in the domain name.”); see also Carlon Meter Co. v. Jerman,
D2002-0553 (WIPO July 30, 2002) (“Respondent may well be an important distributor
of Complainant's products, but its right to use the trademarks of Complainant
do not necessarily extend to a right to use the globally extensive domain name
system by incorporating these trademarks in the Domain Names in a manner which
links them to Respondent's web site.”).
Moreover,
Complainant suggests that Respondent is using the <katadyn.net>
domain name to sell competing water filter brands. The Panel finds that the diversion of Internet users away from
Complainant to Respondent’s website for Respondent’s benefit is not a bona
fide offering of goods or services under Policy ¶ 4(c)(i) and is not a
legitimate noncommercial or fair use under Policy ¶ 4(c)(iii). See Bank of Am. Corp. v. Nw. Free Cmty.
Access, FA 180704 (Nat. Arb. Forum Sept. 30, 2003) (“Respondent's
demonstrated intent to divert Internet users seeking Complainant's website to a
website of Respondent and for Respondent's benefit is not a bona fide offering
of goods or services under Policy ¶ 4(c)(i) and it is not a legitimate noncommercial
or fair use under Policy ¶ 4(c)(iii).”); see also Am. Online, Inc. v.
Advanced Membership Servs., Inc., FA 180703 (Nat. Arb. Forum Sept. 26,
2003) (“Respondent's registration and use of the <gayaol.com> domain name
with the intent to divert Internet users to Respondent's website suggests that
Respondent has no rights to or legitimate interests in the disputed domain name
pursuant to Policy Paragraph 4(a)(ii).”).
Furthermore,
the Panel finds that Respondent’s use of a disclaimer on the website at the
<katadyn.net> domain name is insufficient to diminish the effect
of using Complainant’s KATADYN mark in the domain name. Consequently, the Panel finds that using a
disclaimer does not imply that Respondent is using the disputed domain name in
connection with a bona fide offering of goods or services under Policy ¶
4(c)(i) or a legitimate noncommercial or fair use under Policy ¶ 4(c)(iii). See AltaVista
Co. v. AltaVista, FA 95480 (Nat.
Arb. Forum Oct. 31, 2000) (finding that since a disclaimer does not, and could
not, accompany the domain name, then the “domain name attracts the consumer’s
initial interest and the consumer is misdirected long before he/she has the
opportunity to see the disclaimer”); see
also DaimlerChrysler Corp. v. Bargman,
D2000-0222 (WIPO May 29, 2000) (finding that addition of a disclaimer, when the
domain name consists of the complainant’s well-known trademark, does not
counter the expectation of Internet users that the domain name is sponsored by
the complainant); see also Las
Vegas Sands, Inc. v. Red Group,
D2001-1057 (WIPO Dec. 6, 2001) (justifying the conclusion that the respondent
wishes to trade on the fame of the complainant’s trademark, regardless of the
presence of a small-print disclaimer that is unavailable to Internet users until
they have already entered the gambling site, because the disclaimer fails to
remedy initial confusion).
Complainant
professes that in addition to selling Complainant’s goods, Respondent is using
the disputed domain name to sell goods that compete with Complainant’s. The Panel finds that capitalizing on
Complainant’s mark to sell competing goods disrupts Complainant’s business and
is evidence of bad faith use and registration for purposes of Policy ¶
4(b)(iii). See Lambros v. Brown, FA
198963 (Nat. Arb. Forum Nov. 19, 2003) (finding that the respondent registered
a domain name primarily to disrupt its competitor when it sold similar goods as
those offered by the complainant and “even included Complainant's personal name
on the website, leaving Internet users with the assumption that it was
Complainant's business they were doing business with”); see also S. Exposure v.
S. Exposure, Inc., FA 94864 (Nat. Arb. Forum July 18, 2000) (finding the
respondent acted in bad faith by attracting Internet users to a website that
competes with the complainant’s business).
The
Panel finds that Respondent is not authorized to sell Complainant’s goods, and
the Panel also finds that such sale is evidence of bad faith use and
registration under Policy ¶ 4(b)(iii). See
Wall v. Silva, FA 105899 (Nat. Arb. Forum Apr. 29, 2002) (finding that
despite respondent’s claim that it used the
<josephinewall.com> domain name, which was identical to complainant’s
JOSEPHINE WALL mark, to help complainant become popular in the United States,
the Panel found that the respondent’s use of the domain name to sell the
complainant’s artwork in the United States constituted disruption pursuant to
Policy ¶ 4(b)(iii)); see also G.D. Searle & Co. v.
Celebrex Cox-2 Vioxx.com, FA 124508 (Nat. Arb. Forum Oct. 16, 2002)
(“Unauthorized use of Complainant’s CELEBREX mark to sell Complainant’s
products represents bad faith use under Policy ¶ 4(b)(iii).”).
Additionally,
Complainant contends that Respondent attracts Internet users to its website for
commercial gain by creating a likelihood of confusion with Complainant’s
KATADYN mark. The Panel finds that
Respondent’s use of Complainant’s mark to increase its customer base is evidence
of bad faith use and registration under Policy ¶ 4(b)(iv). See Procter & Gamble Co. v. Hlad,
FA 126656 (Nat. Arb. Forum Nov. 20, 2002) (finding that the disputed domain
name was registered and used in bad faith where the respondent, a distributor
of the complainant’s products who was not a licensee of the complainant, used
the complainant’s mark in its domain name, suggesting a broader relationship
with the complainant and fostering the inference that the respondent was the
creator of the complainant’s products rather than a mere distributor); see
also Identigene, Inc. v. Genetest
Labs., D2000-1100 (WIPO Nov. 30, 2000) (finding bad faith where the
respondent's use of the domain name at issue to resolve to a website where
similar services are offered to Internet users is likely to confuse the user
into believing that the complainant is the source of or is sponsoring the
services offered at the site).
Moreover,
Complainant reasons that Respondent had actual knowledge of Complainant’s
rights in the KATADYN mark due to Respondent’s placement of the trademark
symbol next to the KATADYN mark on its website. The Panel finds that Respondent had actual knowledge of
Complainant’s rights; the Panel also finds that such knowledge is evidence of
bad faith use and registration for purposes of Policy ¶ 4(a)(iii). See Associated Materials, Inc v. Perma
Well, Inc., FA 154121 (Nat. Arb. Forum May 23, 2003) (finding that the
respondent’s actual knowledge of the complainant’s rights in the ULTRAGUARD
mark, inferred from the fact that the respondent was a distributor of the
complainant, along with the respondent being on notice of its own lack of
rights evidenced that the domain name was registered in bad faith); see also
Pfizer, Inc. v. Suger, D2002-0187 (WIPO Apr. 24, 2002) (finding that
because the link between the complainant’s mark and the content advertised on
the respondent’s website was obvious, the respondent “must have known about the
Complainant’s mark when it registered the subject domain name”).
In
addition, Complainant maintains that most Internet users are not likely to see
Respondent’s disclaimer. The Panel
finds that Respondent’s use of the disclaimer is not sufficient to negate a
finding of bad faith registration and use under Policy ¶ 4(a)(iii). See Ciccone v. Parisi, D2000-0847 (WIPO Oct. 12, 2000) (“Respondent’s use of a disclaimer on its website
is insufficient to avoid a finding of bad faith. First, the disclaimer may be ignored or misunderstood by Internet
users. Second, a disclaimer does
nothing to dispel initial interest confusion that is inevitable from
Respondent’s actions. Such confusion is
a basis for finding a violation of Complainant’s rights.”); see also Thomas & Betts Int’l, Inc. v. Power
Cabling Corp., AF-0274 (eResolution Oct. 23, 2000) (finding bad faith based
upon initial interest confusion despite disclaimer and link to the
complainant’s website on the respondent’s website).
DECISION
Having
established all three elements required under the ICANN Policy, the Panel
concludes that relief shall be GRANTED.
Accordingly, it is Ordered that the <katadyn.net>
domain name be TRANSFERRED from Respondent to Complainant.
___________________________________________________
Honorable Richard B. Wickersham, Judge
(Ret.), Panelist
Dated: September 7, 2005
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