Yoshida Metal Industry v EUIPO (EU trade mark - Registration of signs consisting of a surface with black dots : Judgment) [2017] EUECJ C-421/15 (11 May 2017)

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(Appeal - EU trade mark - Registration of signs consisting of a surface with black dots - Declaration of invalidity - Regulation (EC) No 40/94 - Article 7(1)(e)(ii) - Article 51(3))

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 29 July 2015,

Yoshida Metal Industry Co. Ltd, established in Tsubame-shi (Japan), represented by J. Cohen, Solicitor, T. St Quintin, Barrister, and G. Hobbs QC,

European Union Intellectual Property Office (EUIPO), represented by A. Folliard-Monguiral, D. Gaja and J. Crespo Carrillo, acting as Agents,

Bodum Logistics A/S, established in Billund (Denmark), represented by H. Pernez, avocate, and by R. Löhr, Rechtsanwalt,

composed of J.L. da Cruz Vilaça (Rapporteur), President of the Chamber, M. Berger, A. Borg Barthet, F. Biltgen and K. Jürimäe, Judges,

having regard to the written procedure and further to the hearing on 29 September 2016,

after hearing the Opinion of the Advocate General at the sitting on 8 December 2016,

1 By its appeal, Yoshida Metal Industry Co. Ltd (‘Yoshida’) seeks to have set aside the judgment of the General Court of the European Union of 21 May 2015, Yoshida Metal Industry v OHIM (T-331/10 RENV and T-416/10 RENV, not published, ‘the judgment under appeal’, EU:T:2015:302), by which that court dismissed its actions for annulment of the decisions of the First Board of Appeal of the European Union Intellectual Property Office (EUIPO) of 20 May 2010 (Cases R 1235/2008-1 and R 1237/2008-1; ‘the decisions at issue’) relating to invalidity proceedings brought by Pi-Design AG, Bodum France SAS and Bodum Logistics A/S (together, ‘Pi-Design and Others’) concerning two EU trade marks registered by Yoshida.

2 Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark (OJ 1994 L 11, p. 1) was repealed and replaced by Council Regulation (EC) No 207/2009 of 26 February 2009 on the European Union trade mark (OJ 2009 L 78, p. 1), which entered into force on 13 April 2009. However, in view of the time at which the events occurred, the present dispute continues to be governed by Regulation No 40/94, at least as regards provisions which are not strictly procedural (judgment of 6 March 2014, Pi-Design and Others v Yoshida Metal Industry, C-337/12 P to C-340/12 P, not published, EU:C:2014:129, paragraph 2).

3 Article 7 of Regulation No 40/94, entitled ‘Absolute grounds for refusal’, provided:

3. Paragraph 1(b), (c) and (d) shall not apply if the trade mark has become distinctive in relation to the goods or services for which registration is requested in consequence of the use which has been made of it.’

4 Article 51 of that regulation, entitled ‘Absolute grounds for invalidity’, stated:

‘1. ‘A[n EU] trade mark shall be declared invalid on application to [EUIPO] or on the basis of a counterclaim in infringement proceedings:

(a) where the [EU] trade mark has been registered contrary to the provisions of Article 7;

3. Where the ground for invalidity exists in respect of only some of the goods or services for which the [EU] trade mark is registered, the trade mark shall be declared invalid as regards those goods or services only.’

5 The facts behind the dispute are set out in paragraphs 1 to 15 of the judgment under appeal as follows:

‘1 On 3 and 5 November 1999, [Yoshida] filed applications for registration of [EU] trade marks with [EUIPO, pursuant to Regulation No 40/94].

2 The trade marks for which registration was sought are the signs reproduced below:

3 The goods in respect of which registration was sought are in Classes 8 and 21 of the Nice Agreement of 15 June 1957 concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks, as revised and amended (“the Nice Agreement”), and correspond to the following description:

- Class 8: “Cutlery, scissors, knives, forks, spoons, whetstones, whetstone holders, knife steels, fish bone tweezers”;

- Class 21: “Household or kitchen utensils and containers (not of precious metal or coated therewith), turners, spatulas for kitchen use, knife blocks for holding knives, tart scoops, pie scoops”.

4 By decisions of 14 September and 23 November 2000, the examiner rejected those applications for registration on the ground that the signs at issue were devoid of any distinctive character within the meaning of Article 7(1)(b) of Regulation No 40/94 ...

5 Following the annulment of 31 October 2001 by the Second Board of Appeal of [EUIPO] of one of the abovementioned rejection decisions, the examiner on 11 July 2002 withdrew the objection concerning the other application for registration. The trade marks at issue were registered on 25 September 2002 and 16 April 2003.

6 On 10 July 2007, [Pi-Design and Others] applied for those trade marks to be declared invalid pursuant to Article 51(1)(a) of Regulation No 40/94 ..., on the ground that they had been registered in breach of Article 7(1)(e)(ii) of that regulation ... In their observations of 17 December 2007, [they] added that the registration should also be declared invalid on the ground that the trade marks lacked distinctive character.

7 By decisions of 15 and 21 July 2008, the Cancellation Division of [EUIPO] rejected, in their entirety, the applications for a declaration of invalidity.

8 On 25 August 2008, [Pi-Design and Others] filed a notice of appeal against each of those decisions of the Cancellation Division.

9 By [the decisions at issue], the First Board of Appeal of [EUIPO], on the basis of the absolute ground for refusal set out in Article 7(1)(e)(ii) of Regulation No [40/94], upheld the appeals and annulled the decisions of the Cancellation Division.

10 In paragraphs 24 to 28 of the [decisions at issue], the Board of Appeal observed, first, that, at the time the applications for registration were filed, the signs were simply classified as “figurative”, and no description was provided. Following the objections raised by the examiner, the applicant stated that the sign was a two-dimensional representation of the “shape of a product”, namely, the handle of a knife (Case R 1235/2008-1), or that it represented the “design of knife handles” (Case R 1237/2008-1). In correspondence subsequent to the application for a declaration of invalidity filed by [Pi-Design and Others], the sign was, however, described by the applicant as “an arbitrary geometrical figure” or a “pattern of dots” (Case R 1235/2008-1).

11 According to the Board of Appeal, that latter description was made with the specific aim of avoiding the application of Article 7(1)(e)(ii) of Regulation No [40/94], the photographs of the knives marketed by the proprietor confirming that the frame surrounding the black dots represented the contour of a knife handle and that those dots represented dents.

12 The Board of Appeal stated in that context, in paragraph 29 of the [decisions at issue], that “a trade mark must be examined in accordance with the circumstances of the case. Among these circumstances are, of course, the information and the documents voluntarily submitted by the trade mark owner in support of its application.”

13 Next, in paragraphs 30 and 31 of the [decisions at issue], the Board of Appeal stated that “the sign is a figurative mark consisting of the two-dimensional representation of the handle of the products for which registration is sought”. Nevertheless, according to the Board of Appeal, the classification of a mark as figurative did not always rule out the application of Article 7(1)(e)(ii) of Regulation No [40/94].

14 Last, in paragraphs 33 to 41 of the [decisions at issue], the Board of Appeal considered whether the black dots representing dents performed a technical function. Based on the information relating to existing patents, it concluded that the dents were necessary to obtain a non-skid effect and that the fact that the same result could be obtained by other shapes did not preclude the applicability of the ground for refusal in question from applying.

15 Having declared the registrations invalid on the basis of Article 7(1)(e)(ii) of Regulation No [40/94], the Board of Appeal did not consider it necessary to rule on the other ground for invalidity relied on by [Pi-Design and Others], the admissibility of which was disputed by the applicant.’

The proceedings before the General Court and Court of Justice and the judgment under appeal

6 By applications lodged at the Registry of the General Court on 12 August and 15 September 2010, Yoshida brought actions for annulment in respect of each of the decisions at issue. In support of its actions, Yoshida relied on a single plea in law, alleging breach of Article 7(1)(e)(ii) of Regulation No 40/94. That plea was broken down into three parts, the first alleging that the scope of that provision had been misinterpreted; the second, that the subject matter of the trade marks at issue had been incorrectly assessed; and the third, that the ground for refusal in question had been misapplied.

7 By its judgments of 8 May 2012, Yoshida Metal Industry v OHIM - Pi-Design and Others(Representation of a triangular surface with black dots) (T-331/10, not published, EU:T:2012:220), and Yoshida Metal Industry v OHIM - Pi-Design and Others(Representation of a surface with black dots) (T-416/10, not published, EU:T:2012:222) (‘the judgments of 8 May 2012’), the General Court upheld the second part of the single plea in law relied on by Yoshida and annulled the decisions at issue.

8 By applications lodged at the Registry of the Court of Justice on 16 July 2012, Pi-Design and Others brought appeals by which they asked the Court to set aside the judgments of 8 May 2012, to declare that the trade marks at issue were invalid, to refer the cases back to the General Court with the obligation to refer the case back to the Board of Appeal of EUIPO in the event of annulment of the latter’s decisions, and to order Yoshida to pay the costs. In support of their appeals, Pi-Design and Others put forward a single ground of appeal, alleging infringement of Article 7(1)(e)(ii) of Regulation No 40/94.

9 By applications lodged at the Registry of the Court of Justice on 16 July 2012, EUIPO brought appeals by which it asked the Court to set aside the judgments of 8 May 2012 and to order Yoshida to pay the costs. EUIPO put forward two grounds in support of its appeals, alleging, first, breach by the General Court of its obligation to state reasons and, second, as also alleged by Pi-Design and Others, infringement of Article 7(1)(e)(ii) of Regulation No 40/94.

10 By judgment of 6 March 2014, Pi-Design and Others v Yoshida Metal Industry (C-337/12 P to C-340/12 P, not published, EU:C:2014:129), the Court set aside the judgments of 8 May 2012, referred the cases back to the General Court and reserved the costs.

11 By the judgment under appeal, the General Court rejected the single plea raised by Yoshida and, consequently, dismissed its actions in their entirety.

- in the alternative, set aside the judgment under appeal and annul the decisions at issue in so far as they concern the following goods for which the EU trade marks at issue were registered, namely, in Class 8 of the Nice Agreement, whetstones and whetstone holders and, in Class 21 of the Nice Agreement, household or kitchen utensils and containers (not of precious metal or coated therewith) and knife blocks for holding knives, and,

- in any event, order EUIPO and Pi-Design and Others to pay the costs, including those reserved by the judgment of 6 March 2014, Pi-Design and Others v Yoshida Metal Industry (C-337/12 P to C-340/12 P, not published, EU:C:2014:129).

13 EUIPO contends that the Court should dismiss the appeal and order Yoshida to pay the costs.

14 Pi-Design and Others request the Court to dismiss the appeal and order Yoshida to pay the costs.

The first ground of appeal, alleging infringement of Article 7(1)(e)(ii) of Regulation No 40/94

16 By its first ground of appeal, which is its principal claim, Yoshida criticises the General Court for having contravened Article 7(1)(e)(ii) of Regulation No 40/94, first, in holding, in paragraph 39 of the judgment under appeal, that that provision ‘applies to any sign, whether two- or three-dimensional, where all the essential characteristics of the sign perform a technical function’.

17 In that regard, Yoshida argues that the General Court adopted an approach contrary to the case-law of the Court of Justice (judgment of 14 September 2010, Lego Juris v OHIM, C-48/09 P, EU:C:2010:516, paragraphs 48, 52 and 72), according to which (i) Article 7(1)(e)(ii) of Regulation No 40/94 does not prevent registration of a sign as a trade mark solely on the ground that it has functional characteristics and (ii) the words ‘exclusively’ and ‘necessary’ used in that provision serve to restrict the scope of application of Article 7(1)(e)(ii) more narrowly to signs which are solely shapes of goods which only incorporate a technical solution.

18 Second, Yoshida argues that the General Court was wrong to consider, in paragraphs 64 and 65 of the judgment under appeal, that, for it to be possible to register the signs at issue, the array of black dots had to be ‘a major non-functional element’ of those signs and those signs had to have a ‘clear ornamental character’. According to Yoshida, Article 7(1)(e)(ii) of Regulation No 40/94 does not prevent the registration of ‘hybrid’ signs comprising visually significant decorative design elements which do not only incorporate a technical solution but which also perform a distinguishing function. Such is the case with the signs at issue.

19 Third, Yoshida argues that the General Court’s statement, in paragraph 65 of the judgment under appeal, that the registration of the signs at issue ‘would improperly reduce the possibilities for competitors to bring to the market alternative product shapes incorporating the same non-skid technical solution’ disregards the presence of the decorative design elements which perform a distinguishing function.

20 EUIPO and Pi-Design and Others contend that Yoshida’s line of argument must be rejected.

21 In the first place, in so far as Yoshida argues that the signs at issue constitute ‘hybrid signs’, it seeks to call into question the factual findings made by the General Court following the examination of the relevant evidence, in particular in paragraphs 46 to 50 and 63 to 65 of the judgment under appeal, relating to the essential characteristics of the signs at issue.

22 However, under Article 256(1) TFEU and the first paragraph of Article 58 of the Statute of the Court of Justice of the European Union, an appeal is limited to points of law. The General Court has exclusive jurisdiction to find and appraise the relevant facts and to assess the evidence. The appraisal of those facts and the assessment of that evidence thus do not, save where the facts or evidence have been distorted, constitute a point of law which is subject, as such, to review by the Court of Justice on appeal (judgment of 26 October 2016, Westermann Lernspielverlage v EUIPO, C-482/15 P, EU:C:2016:805, paragraph 35).

23 In that regard, given the exceptional nature of a complaint of distortion, both the provisions referred to and Article 168(1)(d) of the Rules of Procedure of the Court of Justice require, in particular, that an appellant indicate precisely the elements alleged to have been distorted by the General Court and show the errors of appraisal which, in its view, led to that distortion. Such a distortion must be obvious from the documents in the file, without there being any need to carry out a new assessment of the facts and the evidence (see, to that effect, judgment of 20 October 2011, PepsiCo v Grupo Promer Mon Graphic, C-281/10 P, EU:C:2011:679, paragraphs 78 and 79).

24 In the present case, Yoshida, which limits itself, in essence, to stating that the signs at issue contain significant decorative and distinctive elements, does not support its argument with elements from the file that are capable of clearly establishing that the General Court distorted the facts and evidence in not reaching the conclusion that the specific configuration of the array of black dots had a sufficiently significant ornamental character for them to be considered an essential non-functional element of the signs at issue.

25 In the second place, to the extent that Yoshida argues that it is apparent from paragraphs 39, 64 and 65 of the judgment under appeal that the assessment made by the General Court for the purposes of the application of Article 7(1)(e)(ii) of Regulation No 40/94 is contrary to the case-law arising from the judgment of the Court of Justice of 14 September 2010, Lego Juris v OHIM (C-48/09 P, EU:C:2010:516), its criticisms stem from a selective reading of that judgment.

26 It follows from that judgment that, by restricting the ground for refusal set out in Article 7(1)(e)(ii) of Regulation No 40/94 to signs which consist ‘exclusively’ of the shape of goods which is ‘necessary’ to obtain a technical result, the legislature duly took into account that any shape of goods is, to a certain extent, functional and that it would therefore be inappropriate to refuse to register a shape of goods as a trade mark solely on the ground that it has functional characteristics. By the terms ‘exclusively’ and ‘necessary’, that provision ensures that solely shapes of goods which only incorporate a technical solution, and whose registration as a trade mark would therefore actually impede the use of that technical solution by other undertakings, are not to be registered. Such a registration would unduly impair the opportunity for competitors to place on the market goods whose shapes incorporate the same technical solution (judgment of 14 September 2010, Lego Juris v OHIM, C-48/09 P, EU:C:2010:516, paragraphs 48 and 59).

27 As regards the condition relating to the fact that the ground for refusal covers any sign consisting ‘exclusively’ of the shape of goods which is necessary to obtain a technical result, the Court has held that the presence of one or more minor arbitrary elements in a sign, all of whose essential characteristics are dictated by the technical solution to which that sign gives effect, does not alter the conclusion that the sign consists exclusively of the shape of goods which is necessary to obtain a technical result. In addition, the ground for refusal under Article 7(1)(e)(ii) of Regulation No 40/94 is applicable only where all the essential characteristics of the sign are functional, with the result that such a sign cannot be refused registration as a trade mark under that provision if the shape of the goods at issue incorporates a major non-functional element, such as a decorative or imaginative element which plays an important role in the shape (see, to that effect, judgment of 14 September 2010, Lego Juris v OHIM, C-48/09 P, EU:C:2010:516, paragraph 52).

28 As regards the condition that registration of a shape of goods as a trade mark may be refused under Article 7(1)(e)(ii) of Regulation No 40/94 only if the shape is ‘necessary’ to obtain the technical result intended, that condition does not mean that the shape at issue must be the only one capable of obtaining that result (judgment of 14 September 2010, Lego Juris v OHIM, C-48/09 P, EU:C:2010:516, paragraph 53).

29 The Court has also held that the correct application of Article 7(1)(e)(ii) of Regulation No 40/94 requires that the essential characteristics of the sign at issue - that is, the most important elements of the sign - be properly identified by the authority deciding on the application for registration of the sign as a trade mark. Once the sign’s essential characteristics have been identified, the competent authority has to ascertain whether they all perform the technical function of the goods at issue (see, to that effect, judgment of 14 September 2010, Lego Juris v OHIM, C-48/09 P, EU:C:2010:516, paragraphs 68, 69 and 72).

30 Contrary to what Yoshida claims, it follows from those considerations that the fact that the sign concerned has ornamental and fanciful aspects does not preclude the ground for refusal under Article 7(1)(e)(ii) of Regulation No 40/94 from applying, in so far as those aspects do not play an important role in the shape of goods at issue, all the essential characteristics of which must perform a technical function.

31 Accordingly, the General Court was right to conclude, in paragraph 39 of the judgment under appeal, that Article 7(1)(e)(ii) of Regulation No 40/94 applies where all the essential characteristics of the sign perform a technical function. Similarly, the General Court’s assessment, in paragraphs 64 and 65 of the judgment under appeal - essentially intended to ascertain whether the specific configuration of the array of block dots constituted a major non-functional element of the signs at issue - correctly reflects the position of the Court of Justice recalled in paragraphs 26 to 28 of the present judgment.

32 In the third place, in so far as Yoshida maintains that the distinctiveness of the signs at issue precludes the application of Article 7(1)(e)(ii) of Regulation No 40/94, it wrongly confuses the specific ground for refusal of registration set out in that provision and the ground provided for in Article 7(1)(b) of that regulation, according to which trade marks which are devoid of any distinctive character are not to be registered.

33 In that regard, it should be noted that the inclusion in Article 7(1) of Regulation No 40/94 of the prohibition of registration as a trade mark of any sign consisting of the shape of goods which is necessary to obtain a technical result ensures that undertakings may not use trade mark law in order to perpetuate, indefinitely, exclusive rights relating to technical solutions (judgment of 14 September 2010, Lego Juris v OHIM, C-48/09 P, EU:C:2010:516, paragraph 45).

34 Moreover, the legislature has laid down with particular strictness that shapes necessary to obtain a technical result are unsuitable for registration as trade marks, since it has excluded the grounds for refusal listed in Article 7(1)(e) of Regulation No 40/94 from the scope of the exception under Article 7(3) of that regulation. It thus follows from Article 7(3) of the regulation that, even if a shape of goods which is necessary to obtain a technical result has become distinctive in consequence of the use which has been made of it, it is prohibited from being registered as a trade mark (judgment of 14 September 2010, Lego Juris v OHIM, C-48/09 P, EU:C:2010:516, paragraph 47).

35 Consequently, Article 7(1)(e)(ii) of Regulation No 40/94 constitutes an obstacle that may prevent a sign consisting exclusively of the shape of goods which is necessary to obtain a technical result from being registered as a trade mark, even though that sign is capable of performing the essential function of a trade mark, that of guaranteeing the identity of the origin of the goods or services in question to the consumer by enabling him, without any possibility of confusion, to distinguish those goods or services from others which have another origin (see, to that effect, judgments of 15 September 2005, BioID v OHIM, C-37/03 P, EU:C:2005:547, paragraph 60, and of 16 September 2015, Société des Produits Nestlé, C-215/14, EU:C:2015:604, paragraph 38).

36 Consequently, the first ground of appeal must be rejected as partly inadmissible and partly unfounded.

The second ground of appeal, alleging infringement of Article 51(3) of Regulation No 40/94

37 By its second ground of appeal, raised in the alternative, Yoshida complains that the General Court contravened Article 51(3) of Regulation No 40/94 in that it failed to examine, as is apparent from paragraphs 48 and 53 of the judgment under appeal, whether the conditions for the application of Article 7(1)(e)(ii) of that regulation were fulfilled in relation to each of the goods for which the signs at issue had been registered.

38 In addition, Yoshida submits that the General Court could not satisfy the requirement laid down in Article 51(3) of Regulation No 40/94 by applying the findings made in the judgment under appeal to the goods at issue which lacked handles, namely, in Class 8 of the Nice Agreement, whetstones, whetstone holders and, in Class 21 of the Nice Agreement, household or kitchen utensils and containers (not of precious metal or coated therewith) and knife blocks for holding knives. According to Yoshida, so far as those goods are concerned, Article 7(1)(e)(ii) of Regulation No 40/94 is not applicable, as the signs at issue constitute two-dimensional marks that may be used as logos.

40 It is apparent from the decisions at issue that the First Board of Appeal of EUIPO concluded that the signs at issue were figurative marks consisting of the two-dimensional representation of the handle of the goods for which registration had been sought.

41 It can also be seen from the decisions at issue that that Board of Appeal of EUIPO declared the registrations of the signs at issue as EU trade marks invalid on the basis of Article 7(1)(e)(ii) of Regulation No 40/94 with regard to all the goods for which those signs had been registered.

42 However, the analysis of the file submitted to the Court shows that Yoshida did not, at any stage of the proceedings before the General Court, invoke the incompatibility of the decisions at issue with Article 51(3) of Regulation No 40/94.

43 Yoshida limited itself to arguing, under its single plea raised at first instance alleging infringement of Article 7(1)(e)(ii) of Regulation No 40/94, that the signs at issue represented a simple decorative pattern with no functional value, which was why they could not be considered to consist exclusively of the shape of goods which is necessary to obtain a technical result within the meaning of that provision.

44 In that regard, the examination of the file before the Court reveals that, while Yoshida argued at first instance that the registrations of the signs at issue covered various goods in Classes 8 and 21 of the Nice Agreement, it did so for the sole purpose of disputing in a general manner the applicability of Article 7(1)(e)(ii) of Regulation No 40/94 to the signs at issue.

45 However, by its second ground of appeal, Yoshida essentially criticises the General Court for not having reviewed the legality of the decisions at issue in the light of Article 51(3) of Regulation No 40/94, and claims that the conditions of application set by Article 7(1)(e)(ii) of that regulation are not met as regards certain specific goods allegedly lacking handles.

46 According to the settled case-law of the Court of Justice, to allow a party to put forward for the first time before the Court of Justice pleas and arguments which it did not raise before the General Court would be to authorise it to bring before the Court of Justice, whose jurisdiction in appeals is limited, a case of wider ambit than that which came before the General Court. In an appeal, the jurisdiction of the Court of Justice is thus confined to a review of the assessment of the General Court of the pleas and arguments debated before it (see, in particular, judgment of 8 November 2016, BSH v EUIPO, C-43/15 P, EU:C:2016:837, paragraph 43 and the case-law cited).

47 In those circumstances, the second ground of appeal must be rejected as inadmissible.

48 It follows from all of the foregoing that the appeal must be dismissed in its entirety.

49 Under Article 184(2) of the Rules of Procedure, where the appeal is unfounded the Court is to make a decision as to costs.

50 Under Article 138(1) of those rules, which applies to appeal proceedings by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since EUIPO and Pi-Design and Others have applied for costs to be awarded against Yoshida and Yoshida has been unsuccessful, it must be ordered to pay the costs of the appeal proceedings.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Yoshida Metal Industry v EUIPO (EU trade mark - Registration of signs consisting of a surface with black dots : Judgment) [2017] EUECJ C-421/15 (11 May 2017) URL: http://www.bailii.org/eu/cases/EUECJ/2017/C42115.html Cite as: ECLI:EU:C:2017:360, EU:C:2017:360, [2017] EUECJ C-421/15

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