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Law & Business Podcast Episode 34: What do Trump’s Trademarks in China Teach All Businesses?

Law & Business Podcast with John Eastwood cover art

Law & Business Podcast Episode 27 with John Eastwood

In Episode 34 of the “Law & Business” podcast, Anthony Verna talks to John Eastwood, a partner at Eiger Law in Taipei, Taiwan. They discuss the issuance of the Trump trademarks in China, if there appears to be any issues outside of the normal issuance of trademarks in China, and what any business moving into China should keep in mind about its trademarks.

Ivanka Trump probably didn’t get special treatment from the Chinese: Based on what John Eastwood has seen, it appears that Ivanka’s trademark applications (which will not have much use for her given that she’s announced that she’s shutting down her brand) were approved in a fairly normal time frame. 

The Trump Organization probably did get special treatment, but that doesn’t mean that they shouldn’t have gotten the trademarks: The first part of the case involves the Trump Organization’s application for construction-related services that had languished for something like 10 years of struggles against the weight of several Chinese bad-faith filers who had apparently been using the “TRUMP” name to market all sorts of products.

Now, anybody who’s doing business in China knows that there’s a big industry. Chinese companies and individuals are extremely fast to file for iconic western marks — or even not-so-iconic marks. (Eiger Law and John Eastwood have a lot of clients that are up-and-coming or niche brands, and even they have problems.)

To some folks, it looked suspicious that China approved Trump’s trademark in the first month he was in office as president — it looked bad, like “oh, now you’re president of the United States, here’s your trademark.” This caused folks to worry about there being a breach of the Emoluments Clause, the part of the Constitution (Article 1, Sec. 9, Para. 8), which prohibits federal officeholders from getting anything of value from a foreign state.

Be there also must be an examination at what was happening right before Jan. 2017.

In December 2016, Michael Jordan got good news in a 15-year struggle to get back the Chinese name commonly used to refer to him — “QIAODAN” — from a Chinese company that used the name to sell sports clothing very successfully. Why? Because when Nike started selling Air Jordan products in China, only the English name “JORDAN” got registered by them — they didn’t bother to go for the Chinese name that everybody in China who cares about basketball chose to call him. The lesson for trademark owners is not to skip registering a Chinese name. 

In October 2016, C.F. Martin & Co, the nearly 200-year-old company that’s made the iconic acoustic guitars used in blues, country, folk and rock, famous around the world, finally got back its marks after years of pursuing action through official channels. This was a case that had caused profound annoyance and frustration for IP professionals working in China, as it was used for years as an example of the Chinese government allowing a copycat local company to brand-jack a famous American brand. Part of the problem perhaps was that the old measure for “famous mark” protection was whether you were a true household name in China — you couldn’t just be famous within an industry, among musicians or music lovers, you had to be what John Eastwood used to call “Coca-Cola” famous but now could probably say is “Jordan” famous or “Trump” famous. But the trademark law was amended a few years ago to refer more generally to “bad-faith” trademark filings, and that gave some more room for action. 

OK, so back to Trump — within a relatively quick period, one can see China clearing away a bunch of these cases on their appeals docket that, frankly speaking, were an embarrassment to the country. And you get them releasing their decision in January 2017 when he’d just become president for that mark for construction services, the one that had been part of the decade-long battle.

So where was the special treatment?

Well, a couple of months later in March 2017, China approved 38 more trademarks that the Trump Organization had applied for the previous year. Now, it is true that trademark registration times are getting better, but that was pretty quick — and it appears that they didn’t go through the same hassles that many trademark applicants go through with the very persnickety, extremely specific (and ever-changing) terms that the Chinese Trade Mark Office deems acceptable. The marks cover everything from golf clubs, hotels, restaurants, insurance, finance and real-estate companies, as you’d expect, but the applications also included some other areas sometimes harder to categorize, including spas, massage parlors, bodyguards and escort services. 

But if we go back to the basics of human behavior, what we can probably take home is this: 

Here is a lightly-edited transcript of the episode:

Anthony Verna:
Oh right. Well welcome to the Law and Business podcast. We’re here again with John Eastwood. This time we’re doing some voiceover IP. How are you doing, John?

John Eastwood:
Doing great, Anthony.

Anthony Verna:
Good. John is a partner at Eiger Law in Taipei. And thank you for again coming on the podcast. And today we’re going to talk about the Trump organizations, their trademarks in the greater China markets. And mainly because whenever a trademark gets granted these days with Donald Trump being president of the United States, it tends to make some news. And generally the thought is that there are some favors being done by the Chinese government. And let’s talk about that process for most filers in the greater China market and then how special or not special, the Trump organization’s trademarks are.

John Eastwood:
Absolutely. Absolutely. Well, I think one of the funny things is that the question came up and it’s been out there a lot of times and I think people use this in a political standpoint. They look at an official, and I’m not just saying Trump, it would any official who’s in the position, you’re getting a special favor from the Chinese government or are they seeking to get that and so as part of the notion of clean government, just as the United States has its Foreign Corrupt Practices Act where we can’t give things of value to[KR1]  foreign government officials. We have in the United States, of course, there’s this concept for the emoluments clause, which is the idea of somehow taking a benefit from a foreign government or seeking a benefit but I think in looking at this, and to be fair, I’m in no sense of a fan of Trump, but I look at this and I want to be very analytical.

I want to be very careful in how I look at this. And I don’t see necessarily that special treatment was sought. It just at this I think, maybe bad timing. And also, there’s a quirk of famous mark thinking that probably led to the perception because there was a large number of marks that got approved almost immediately after he became president.

Anthony Verna:
Yes. And I think that starts the cynical thinking. How does that sound?

John Eastwood:
Yeah, yeah, yeah. Well, and I think about so if we take the clock, go back to January 2017 in that time, Trump had been engaged in a 10 year battle with mainland Chinese companies that had been selling all sorts of products and usually not the ones that he’s necessarily known for, but they were things such as Trump toilets, Trump condoms, Trump pacemakers.

And there was even an a hotel operator who was trying to do a Trump International hotel, which is kind of right up in this bailiwick.

Anthony Verna:
Right, exactly. But you know, that that doesn’t sound that that particular battle, that particular issue doesn’t sound all that different. Like Apple, if I recall correctly, had the problem with iPad, if I recall, or was it iPhone in China? I forget. Yeah. So that particular problem doesn’t sound all that unique to the Trump organization.

John Eastwood:
Yeah. And if you think about it, I mean, for example, you know, Trump as a word, it has a couple of other meanings aside from being a name. I mean famously his immigrant grandfather arrived, he changed his name from Trumpf to Trump to anglicize it in a sense. But for ages, we’ve had the concept and in card games of, he played the trump card, the British abused it as a…

Anthony Verna:
Certainly. By the way, in the United States, you can find trump trademarks in poker that do not belong to any aspect of the Trump organization at all.

John Eastwood:
Right. And that’s even with him having gotten into the casino business. It’s interesting cause you could actually get the idea of trump as being a word that indicates having an advantage and you could happen upon it without knowing about him. But I think, in most of these cases, the Chinese companies, they did have some sense of him being… I mean from a trademark perspective, Donald Trump is a fascinating say would one will about a political skill or anything else. He’s a master promoter of himself as the idea of being a wealthy person. And whether or not he’s actually wealthy doesn’t even really matter, or maybe it matters even more than if he’s not wealthy. He’s an even better promoter because even when he has said, “Oh, you know, I was in bankruptcy or I had a…” is he famously one time said to Ivanka, Ivanka tells the story that one day he’s walking with  Ivanka down the street and they see a beggar, a homeless guy. And he turns to her and says,  “Believe it or not right now, that guy has millions of dollars more than I do.” because of the hole that he’d gotten in at that moment because of the volatility of the real estate market and the financing and all these other things. So he’s had financially ups and downs, but through it all, he is very often tried to extend his name, his fame, his efforts to tell people I am a wealthy, successful person. And that has played out very well for people being willing to license that name. People have been very willing to for a long time, to I guess pay him license fees in order to say, can I put your name on my property in this other place?

And that, that fame hasn’t always extended to steaks or to certain other business ventures. But in a sense that doesn’t matter because in a sense he did actually believe. And when he does say, when he does say to you he’s been quoted as saying before that his net worth goes up and down based on how he’s feeling. I actually understand that from a trademark perspective because if he’s feeling very bullish about the Trump name or the Trump mark, I’m not saying that like the trademark valuation is an impossible science, but it is a difficult one. But if you do, if you actually feel that people value your brand and you’re feeling good about yourself and your position and the willingness of people to do business with you, that probably is a good sign that your mark’s on the way up.

Anthony Verna:
Well in the United States, the standard by which a famous trademark is measured at least by the federal courts is what is the effect or what is the effect that the trademark has on the average consumer? Because you can have a trademark, for example, that same as in a certain industry. And then you mentioned the fact that Trump might not be a famous trademark in steaks or whatever the other industries that aren’t associated with the core might be, but that doesn’t necessarily mean it’s not a famous mark anyway because wouldn’t the average consumer have some kind of reaction to it or some kind of knowledge to that trademark?

John Eastwood:
It is interesting cause we’ve seen there’s iconic like fashion brands and people in Asia will often slap those onto buildings.
Anthony Verna:
And I’m sure we just had a movie all about that that came out.

John Eastwood:
It is pretty funny cause we have people also love wordplay in Chinese. There’s a lot of homophones in the Chinese language. And so, as a result, yeah, many times they can find something that in a local dialect or in Mandarin, will be a sound alike. And to give a kind of a quirky example, some years back there was a motel kind of a hit certain massage places and they liked the name Chanel for the luxury brand because the Chinese equivalent, you could make a kind of a sound alike for …I guess for massage parlors and kind of a little hourly rent motels under the name Shanghai[KR2]  which was sort of like a fragrant breasts.

And, it’s weird, because it was a sound alike for that. Apparently that was one of the things that local companies engaged in Korean[KR3]  activities chose as their marketing and I did talk to the Chanel people. They were not happy about that because it’s not the image they were shooting for. To think about Trump, there’s two aspects that popped to mind is that this 10 years struggle that he had over his mark, the Chinese take an attitude towards fame of a mark; that you have to be something like Coca Cola famous, you have to be ubiquitously like famous even to the common person. Therefore, for example, if you were a provider of automotive parts or sewage pumps or some other kind of thing that not your average person’s going to know the brand for. You could be very famous in your industry. But by Chinese standards under the classical old kind of measure, if these things that would not be considered famous. Anthony Verna: Around here, I find that fame can be a little, at least famous trademarks can be a little inconsistent as well. I kind of wished that we had a really high standard like that. So, because we have some rulings, for example, Entrepreneur magazine has been ruled a famous trademark, really by the ninth circuit. And I sit here and I say, well, I know that they’ve got a lot of sales, but if I go to the average person and I say Entrepreneur, is the first thing popping out of their mind magazine…

John Eastwood:
No.
Anthony Verna:
Right. Exactly, exactly correct. It’s not the same as Chanel. It’s not going to be the same  as Versace. It’s not going to be the same as Michael Jordan. Although I don’t know,

John Eastwood:
He was weak there.

Anthony Verna:
Yes, exactly. Exactly. So, and Time, I don’t know, I think fame might be fleeting there for Time as well, but I think at the very least you can still make that argument that Time is still a famous mark. But still, I mean, I think we have a little less of a standard here in the United States for that famous trademark than there.

John Eastwood:
Well, and I think so what you have is the first part of this involves the Trump organization, they had an application for construction related services that it just languished for some of the 10 years of struggles against the weight of several Chinese bad faith filers who apparently been using. And I say bad faith because I think they knew, he’s been at least pretty famous for internationally for decades. And they were using the Trump name for marketing all sorts of products. And I think they knew what they did because anybody who’s doing business in China does know that, that this is a classic big industry. Chinese companies and individuals are extremely fast to file for these iconic Western marks or for these names not so iconic, I guess.


I mean I’ve got some clients that are quite up and coming are niche brands where there should be no level of confusion, but even they’ve got some serious problems in China and you see some of these guys, like you look into the filing databases in the Chinese trademark office and you’ll see that some guy some lone guy out in the middle of nowhere has gone and filed for a zillion famous brands that for whatever reason have not bothered to register in China and they try to try to address that. I mean the Chinese trademark law got changed to have a provision against bad faith filing and establishing bad faith is those require a little work and some evidence. Right.

Anthony Verna:
I was going to say, what does it take to show bad faith? Because if a company hasn’t moved into the jurisdiction yet, they’re not selling the products with those trademarks.

John Eastwood:
Yes. Yeah, yeah. So sometimes it could be things like if they did certain big fashion shows and they did certain things and they were able to show … one thing could be also internet sales, but that is difficult. So oftentimes the faster way to fight that is to look at a non-use. Because if the mark from the other side is say three years old, the guy’s been camping on it for awhile. Sometimes what you can do is go for a non-use cancellation against the other side at the same time you filed for your mark. And there is often a kind of a funny dance where the non-use cancellation will not be fully handled by the time that it is that mark is actually cited to knock out temporarily. So, you have to do this thing of appeals, but eventually you can win. I mean, we’ve done that quite a few times for clients.

Anthony Verna:
What takes 10 years? What takes 15 years for a group that is supposedly that big to get their trademarks through in China?

John Eastwood:
Well, the system is pretty slow and there’s a lot of ways that you can try to file and refile but basically, if you’re very persistent, I would say this is a testament in the companies that are famous for persistence. Their stories are all about 10, 12, 15 years of fighting, fighting, fighting until the law actually changed and they got a chance. And maybe sometimes some evidence surfaces of an attempt by the other company to… What I’d say is that for me this is a fascinating thing in here that this case, China approved Trump’s trademark for construction services in the first month that they use in his office as president. And you know, it looked bad because you could take this, and I think a lot of media outlets did.


They said, “Oh, well, China treated this like, Oh, you’re now you’re president of the United States. Here’s your trademark.” and people thought then the moment about like emoluments clause, “Oh, was this a gift from China?” They’re somehow treating them specially and giving them something of value, which is a trademark. I would actually say that he should have gotten the trademark years ago and in this chain of things January 2017 is actually part of a movement by China to try to get its act together because just the previous month, Michael Jordan got really good news and his 15 years struggles and the perseverance Meeks[KR4]  is it means a lot. He finally managed to get back the Chinese name, commonly used to refer to him a child down[KR5] , from a Chinese company that had been using the name to sell sports clothing very successfully. And you might wonder why didn’t they register that? And it’s because when Nike started selling Air Jordan products in China, only the English named Jordan got registered by them. They didn’t bother to go for the Chinese name that everybody in China who cares about basketball chose to call Michael Jordan. So that’s a lesson for trademark owners is don’t skip the Chinese name.

Anthony Verna:
But that’s also a cultural lesson as well. You can say don’t skip the Chinese name, but you got to know what it is too.

John Eastwood:
Right. Or if you don’t choose your name, the market will find one for you. And you can maybe choose a better name. Coco Cola is the Chinese name for Coca Cola and I think it was actually …

Anthony Verna:
…getting a bite. The Max Tadpole reference here.

John Eastwood:
I think that’s their second time around. I think they actually had a… I think if I remember right, Coca-Cola had a different Chinese name when it first went on the market and then they subtly changed it. So they could have actually gone, in terms of the the phonetic sounding words. They could have gone something but it wouldn’t have meant so much. But Coco Cola actually has a good, very good meaning in terms of making your mouth happy and stuff like the flavor and everything.


So it’s actually is a very smart bit of branding and companies that choose …that work a little bit to come up with a cute way to say something. They can either go with a transliteration, which is the way to sound like their own name. If they can’t do that because of certain vowels… Sorry, certain consonants are not really being used too often in Chinese because certain sounds that may not be used then at least you can come up with a Chinese name that captures the meaning or the feel of your brand. And if you choose it, then it’s much better than someone else choosing it. Because if someone else chooses it, by the time the market has a name for it. And if you have any reputation…someone… go back to that thing about the Chinese industry based around of the sheer number of people who will go and register marks. So, people will move, companies will move, individuals will move really fast to go and register a trademark that will use exactly the same characters that the market’s calling you.

Anthony Verna:
I mean, I think that’s a good lesson that kind of transects everything we’re talking about here, which is if you’re going to file in China, you need to understand, or if you just register the English word you need to understand how that could be transliterated.

John Eastwood:
Right, right. And you’re looking at chow done, with Michael Jordan’s Chinese name. There was a lot of registrations for Trump type names using the Chinese characters that are used for his name. Hillary Clinton is known as she all the. Obama has two different Chinese names Obama and Obama and people, especially for someone who’s famous out in the world, they show up in the newspaper. The newspapers not going to just write the name out in English. They’ll come up with a name for them. And I think that’s Trump in January 2017, Michael Jordan, just the month before in December 2016, and the two months before that, there’s this case involving the CF Martin and Co. It’s a company that’s been in Nazareth, Pennsylvania since 1833.

Anthony Verna:
Yes. While I don’t have a Martin guitar, I definitely have bought many Martin guitar strings in my time.

John Eastwood:
And have to admit I aspire some day to getting a Martin guitar there. They’re beautiful instruments and some years back I did actually meet at one of the industry shows, Christopher Martin, the fourth, you know, same family. They’d been running the business forever. And I know that back at that time they were extremely frustrated to hopefully, now they’re very happy because in October 2016, two months before Michael Jordan, three months before Donald Trump, they won on their trademark battle in China. Their epic decade long fights and they went through a lot of official channels and things like that. But this had caused a huge annoyance and frustration for IP professionals working in China because it had been used for years. As an example, the Chinese government just totally allowing a copycat local guitar company to brand hijack a famous American brand.

Anthony Verna:
And when you say that, I mean Martin is a famous brand in China or is it not? I mean how …it certainly isn’t going to be Chanel or Versace.

John Eastwood:
Well, the key point I think is that the trademark law was amended a few years ago to refer more generally to bad faith trademark filings. And I think it didn’t have to necessarily be like Coca Cola or you could even say instead of that, you could probably say Jordan or Trump famous. I mean, that gets into the second aspect, which is that when you become president of the United States there’s another aspect to, he might’ve been famous for the TV show Apprentice. And I think it doesn’t even matter whether or not that show was shown in China. He’d already been a figure in pop culture for a while before that, which is how he got the Apprentice show.


But he didn’t have to, it wasn’t just like he went with the election being becoming the president of the United States. I mean, that’s a hell of a lot of fame right there. Yeah, that’s pretty crazy. They are in the history books. So, I think it was just simply too embarrassing for China. I know that you could say like, wow, legally speaking that 10 year battle is something  that shouldn’t have happened for him and it shouldn’t have happened to Michael Jordan. It shouldn’t have happened at the CF Martin and Co, guitar makers, like this kind of stuff is all things that nobody deserved to have happened to them. And then you add in the extraordinary fame that a person who becomes elected to the United States presidency gets. And you add on a third element, which it doesn’t have to officially be a reason, but if I was China looking at this situation, it would just be horrendously embarrassing and a stupid bit  for a country that already is frequently at odds with the United States on intellectual property protections.

Sitting out there and having local companies camping out on the Trump name. I mean when you have meetings between, now with recent news and it seems that the meetings between the Xi Jinping and Trump are already awkward enough whether or not there’s more terrorists or fewer terrorists or what’s going to be the future. And militarily we have the South China seas, but imagine going in and if there was a guy in the United States who was going around, doing something completely outrageous with the Xi Jiping branded toilet brush or some kind of horrible kind of thing that the Chinese would take as an insult to them personally. And that’s just no way to try to build goodwill between nations. And so, I could see why the Chinese would try to remove this sort of an obstacle from relations between world leaders.

Anthony Verna:
I think one of the perceptions that a lot of Americans have is that trying to fight this in China is useless, that the Chinese IP system feels arbitrary when you’re sitting from this side of the Pacific Ocean. And it’s really hard for maybe a smaller American company to truly understand and appreciate what the system is, especially when it really does feel like it happened at a time that the simple faraway narrative could have been its favor. But when you look and you dig deep, it’s not, but I think a lot of Americans feel is if they’re doing business in China and even if they’re just manufacturing products in China, that the IP system feels maybe a little arbitrary when it’s not.

John Eastwood:
One of the most difficult things that I think companies dealing with China trademark, there is a little bit of an arbitrariness in terms of office actions. Because even skilled professionals find it hard to get the specifications just right. And we frequently, depending on the whims of the examiners, we have to amend things and try to find a way to classify goods and services in a way that will be acceptable. And I think if there was a favor that he got, because once he got that first mark through  the CTMO, the Chinese Trademark Office had no really good reason to hold back on the other marks that had been filed in 2016 and so then you get a flood of cases coming a few months later and I can see how that happened.

John Eastwood:
I mean, if we’re going back to the basics of human behavior, what we probably can take home is this –  China was already taking some steps to clear away some of its most embarrassing trademark cases like chow done, like Jordan and Martin guitars and Trump’s fame within China skyrocketed in recent years, making the trademark application for construction services a potential embarrassment for them to be holding back on that. And once Trump’s older case got resolved, the CTMO had no really good reason to hold back on the other marks that he filed in 2016. And probably, if there would be one observation to make is that they probably let the mark slide through a little easier than they normally would have. It’s hard to measure that, but given how persnickety the individual trademark examiners can be it is kind of hard because they do request like little changes here and there and there and there.


And I’ve even had clients that if they make the changes requested by the examiner, and then once they’ve made the changes requested by the examiner, the trouble they landed in is that then the examiner rejects it because it’s too similar to another mark’s subclasses. And if they had actually stuck to their guns earlier on, they would’ve had less of a problem if they had said, well, no, actually we don’t do power transformers but the Chinese government requested power transformer that such and such term be slightly changed. So it’s really hard sometimes you have to know when to stick to your guns and try to look at the classifications, the specifications very, very carefully.

Anthony Verna:
Yeah, I was about ready to sit there and disagree with you and say, “Well, gee, that doesn’t sound all that different from my filings.” and, until you hit like, yes, well then, then when we change it, then it’s rejected for something. All right. All right. You’re right. You’re right. That does, you’re right. It does sound a little arbitrary. I was about ready to fight you there, John. then,

John Eastwood:
But the question here is should you try to register? Well, first off, my philosophy is that you should always register in the countries where you’re doing business. If you’re making goods, if you’re selling goods, or if your competitors who are going to be pirating your goods or something like that are located there and we’ve had a lot of trademarks go through quite smoothly. So, I mean, in one sense you shouldn’t skip it because many times it does work and every so often you do get an epic battle or you get into like kind of a little thing. And it’s important to pay attention to the details of their sub-classifications because they’re so persnickety about that. But otherwise, don’t ever let the examiner pull you too far away from your core.


It’s sometimes simpler is better sometimes we have clients that want to throw in the kitchen sink for all sorts of stuff. And you have to really be very realistic about the client really is known for for making say pens and ink cartridges. But if they’re not planning to do anything with writing paper or some other kinds of stationary products, better to leave some of those out if you know that they’re not a paper maker, if you know that they don’t have really any plans because you don’t know… You have to be very careful not to step on something else. And it’s very easy to do that in charter.

Anthony Verna:
Right. So, John, other than the takeaway of it seems as if the Trump organization had a typical fight for their trademarks in China. We’re hitting the 30 minute mark, so, we’ll not the extend this because we’d like to keep our episodes at 30 minutes. But what other takeaways do you think other American firms should have for moving the IP into the greater China market?

John Eastwood:
Well, for the greater China thing, I think that you should work with your marketing people, work with some native speakers, as your local council. We’ve helped a lot of clients over the years come up with a variety of possible names. And we’re not in a marketing gurus, but if you are working with like an ad agency or something like that on the launch in China, big corporations have the money for that, the small companies usually don’t. But it’s usually good to ask and say, “Hey, is there a neat turn of phrase? Is there something I can use that would express what my company does? It sounds somewhat like my brand name.” Cause if you don’t choose your name, you know the market, will choose one for you.


So that would be one of the most important things. I would emphasize, definitely register the Chinese trademark; the Chinese character trademark. It’s crazy when people don’t and maintain consistency across the greater China market. So for example, if you have one Chinese trademark that you use on mainland China, plan it out so that you could still use that in Hong Kong, Macau, Taiwan, because I’ve seen large brands many years ago, say like about 18, 17 years ago or so. I remember that I think Intel used to be using two different names. It was a [inaudible] [KR6] in one market and in diary[KR7]  in another one. And it was all because of, of the way that things were filed and what marks had been there before. And you know, just for consistency of branding, it’s important. It’s good to be able to have materials that will work in one environment, websites that will work in one environment and will work in another.

Anthony Verna:
Right. Right. John, thank you so much and look forward to having you on another episode for a fun cross Pacific chat.

John Eastwood:
That sounds great. Thank you so much for having me,

Anthony Verna:
John. Thanks. Talk to you soon.

John Eastwood:
All the best.


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