[Federal Register Volume 85, Number 203 (Tuesday, October 20, 2020)]
[Proposed Rules]
[Pages 66502-66506]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-22946]


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DEPARTMENT OF COMMERCE

Patent and Trademark Office

37 CFR Part 42

[Docket No. PTO-C-2020-0055]


Request for Comments on Discretion To Institute Trials Before the 
Patent Trial and Appeal Board

AGENCY: Patent Trial and Appeal Board, United States Patent and 
Trademark Office, Department of Commerce.

ACTION: Request for comments.

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SUMMARY: The United States Patent and Trademark Office (Office or 
USPTO)

[[Page 66503]]

seeks public comments on considerations for instituting trials before 
the Office under the Leahy-Smith America Invents Act (AIA). The USPTO 
is considering the codification of its current policies and practices, 
or the modification thereof, through rulemaking and wishes to gather 
public comments on the Office's current approach and on various other 
approaches suggested to the Office by stakeholders. To assist in 
gathering public input, the USPTO is publishing questions, and seeks 
focused public comments, on appropriate considerations for instituting 
AIA trials.

DATES: Comment date: Written comments must be received on or before 
November 19, 2020.

ADDRESSES: For reasons of government efficiency, comments must be 
submitted through the Federal eRulemaking Portal at https://www.regulations.gov. To submit comments via the portal, enter docket 
number PTO-C-2020-0055 on the home page and click ``search.'' The site 
will provide a search results page listing all documents associated 
with this docket. Find a reference to this Request for Comments and 
click on the ``Comment Now!'' icon, complete the required fields, and 
enter or attach your comments. Attachments to electronic comments will 
be accepted in ADOBE[supreg] portable document format or MICROSOFT 
WORD[supreg] format. Because comments will be made available for public 
inspection, information that the submitter does not desire to make 
public, such as an address or phone number, should not be included in 
the comments.
    Visit the Federal eRulemaking Portal (https://www.regulations.gov) 
for additional instructions on providing comments via the portal. If 
electronic submission of comments is not feasible due to a lack of 
access to a computer and/or the internet, please contact the USPTO 
using the contact information below for special instructions regarding 
how to submit comments by mail or by hand delivery, based on the 
public's ability to obtain access to USPTO facilities at the time.

FOR FURTHER INFORMATION CONTACT: Scott C. Weidenfeller, Vice Chief 
Administrative Patent Judge, by telephone at 571-272-9797.

SUPPLEMENTARY INFORMATION:

Background

Development of This Request for Comments

    On September 16, 2011, the AIA was enacted into law (Pub. L. 112-
29, 125 Stat. 284 (2011)), and in 2012, the Office implemented rules to 
govern Office trial practice for AIA trials, including IPR, PGR, 
CBM,\1\ and derivation proceedings pursuant to 35 U.S.C. 135, 316, and 
326 and AIA 18(d)(2). See Rules of Practice for Trials Before the 
Patent Trial and Appeal Board and Judicial Review of Patent Trial and 
Appeal Board Decisions, 77 FR 48612 (Aug. 14, 2012); Changes to 
Implement Inter Partes Review Proceedings, Post-Grant Review 
Proceedings, and Transitional Program for Covered Business Method 
Patents, 77 FR 48680 (Aug. 14, 2012); Transitional Program for Covered 
Business Method Patents--Definitions of Covered Business Method Patent 
and Technological Invention, 77 FR 48734 (Aug. 14, 2012). Additionally, 
the Office published a Patent Trial Practice Guide to advise the public 
on the general framework of the rules and proceedings, including the 
structure and times for taking action in each of the new proceedings. 
See Office Patent Trial Practice Guide, 77 FR 48756 (Aug. 14, 2012). 
Since then, the Office has designated more than 40 decisions in such 
proceedings as precedential or informative, and it has issued several 
updates to the Trial Practice Guide that were subsequently 
consolidated. See Patent Trial and Appeal Board Consolidated Trial 
Practice Guide (Nov. 2019) (Consolidated Trial Practice Guide or CTPG), 
available at https://www.uspto.gov/TrialPracticeGuideConsolidated. In 
its ongoing effort to achieve consistency and fairness, the Office is 
considering promulgating additional rules based on this broad 
experience as it relates to considerations for instituting AIA trials.
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    \1\ Under Section 18 of the AIA, the transitional program for 
post-grant review of covered business method patents sunset on 
September 16, 2020. AIA Sec.  18(a). Although the program has 
sunset, existing CBM proceedings, based on petitions filed before 
September 16, 2020, are still pending.
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Discretion in Deciding Whether To Institute AIA Trials

Director's Discretionary Institution Authority in General

    By way of background, the Patent Trial and Appeal Board (PTAB or 
Board) institutes a trial on behalf of the Director. 37 CFR 42.4(a); 35 
U.S.C. 314. In deciding whether to institute the trial, the Board 
considers, at a minimum, whether a petitioner has satisfied the 
relevant statutory institution standard. Even in cases where a 
petitioner has satisfied the institution standard, the statutes, 
including 35 U.S.C. 314(a) and 324(a), provide the Director with 
discretion to deny a petition. See, e.g., 35 U.S.C. 314(a) (``The 
Director may not authorize an inter partes review to be instituted 
unless . . .''). The Supreme Court held that ``the agency's decision to 
deny a petition is a matter committed to the Patent Office's 
discretion,'' and that there is ``no mandate to institute review.'' 
Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2140 (2016).
    The Director also is given broad discretion under 35 U.S.C. 315(d) 
and 325(d) to determine the manner in which ``multiple proceedings'' 
before the Office involving the same patent may proceed. Specifically, 
``the Director may determine the manner in which the . . . other 
proceeding or matter may proceed, including providing for stay, 
transfer, consolidation, or termination of any such matter or 
proceeding.'' Id.
    Under 35 U.S.C. 316(a) and 326(a), the Director shall prescribe 
regulations for certain enumerated aspects of AIA proceedings, and 
under 35 U.S.C. 2(b)(2)(A), the Director may establish regulations that 
``shall govern the conduct of proceedings in the Office.'' Further, 35 
U.S.C. 316(b) and 326(b) require the Director to ``consider the effect 
of any such regulation [under this section] on the economy, the 
integrity of the patent system, the efficient administration of the 
Office, and the ability of the Office to timely complete proceedings 
instituted under this chapter.''
    Congress designed the AIA ``to establish a more efficient and 
streamlined patent system that will improve patent quality and limit 
unnecessary and counterproductive litigation costs.'' H.R. Rep. No. 
112-98, pt. 1, at 40 (2011), 2011 U.S.C.C.A.N. 67, 69; see also S. Rep. 
No. 110-259, at 20 (2008). At the same time, Congress instructed that 
``the changes made by [the AIA] are not to be used as tools for 
harassment or a means to prevent market entry through repeated 
litigation and administrative attacks on the validity of a patent. 
Doing so would frustrate the purpose of the section as providing quick 
and cost effective alternatives to litigation.'' H.R. Rep. No. 112-98, 
at 48 (2011).
    To achieve the appropriate balance envisioned by Congress, the 
Office has taken into account a variety of factors when determining 
whether to institute a proceeding. In so doing, the Office has also 
taken into account the considerations identified in 35 U.S.C. 316(b) 
and 326(b): The economy, the integrity of the patent system, the 
efficient administration of the Office, and the ability of the Office 
to timely complete instituted proceedings. The Office has also worked 
to address the emergence of repeated administrative

[[Page 66504]]

attacks on the patentability of the same patent claims and the 
harassment of patent owners.
    The case-specific analysis the Office has developed attempt to 
balance Congress's intent for AIA proceedings to be ``quick and cost 
effective alternatives to litigation,'' on the one hand, with ``the 
importance of quiet title to patent owners to ensure continued 
investment resources,'' on the other hand. H.R. Rep. No. 112-98, pt. 1, 
at 48 (2011). For example, the Office has set forth, in various 
precedential PTAB decisions, various factors used in its case-specific 
analysis. See, e.g., General Plastic Co., Ltd. v. Canon Kabushiki 
Kaisha, IPR2016-01357, 2017 WL 3917706, at *7 (PTAB Sept. 6, 2017) 
(precedential) (providing a nonexclusive list of factors that the Board 
considers when evaluating discretionary denial of follow-on petitions, 
also known as ``serial'' petitions, under 35 U.S.C. 314(a)); Valve 
Corp. v. Elec. Scripting Prods., Inc., IPR2019-00062, -00063, -00084, 
2019 WL 1490575 (PTAB Apr. 2, 2019) (precedential) (Valve I) 
(explaining that the Board considers any relationship between 
petitioners when weighing the General Plastic factors); Valve Corp. v. 
Elec. Scripting Prods., Inc., IPR2019-00064, -00065, -00085, 2019 WL 
1965688 (PTAB May 1, 2019) (Valve II) (applying the first General 
Plastic factor to a petitioner that joined a previously instituted IPR 
proceeding and, therefore, is considered to have previously filed a 
petition directed to the same claims of the same patent); Apple Inc. v. 
Fintiv, Inc., IPR2020-00019, 2020 WL 2126495 (PTAB Mar. 20, 2020) 
(precedential) (summarizing the factors the Office has considered when 
a patent owner argues for discretionary denial under NHK Spring Co., 
Ltd. v. Intri-Plex Techs., Inc., IPR2018-00752, 2018 WL 4373643 (PTAB 
Sept. 12, 2018) (precedential) due to an earlier trial date).
    These same considerations are also represented in various 
informative decisions. See, e.g., Sand Revolution II, LLC v. 
Continental Intermodal Group-Trucking LLC, 2020 WL 3273334 (PTAB June 
16, 2020) (informative) (applying the factors set forth in the 
precedential Fintiv decision to grant institution); Apple Inc. v. 
Fintiv, Inc., IPR2020-00019, 2020 WL 2486683 (PTAB May 13, 2020) 
(informative) (applying the factors set forth in the precedential 
Fintiv decision to deny institution); Adaptics Ltd. v. Perfect Co., 
IPR2018-01596, 2019 WL 1084284 (PTAB Mar. 6, 2019) (informative) 
(applying discretion to deny a petition where the petition lacks 
particularity in identifying the asserted challenges that resulted in 
voluminous and excessive grounds); Deeper, UAB v. Vexilar, Inc., 
IPR2018-01310, 2019 WL 328753 (PTAB Jan. 24, 2019) (informative) 
(applying discretion to deny a petition where the petitioner 
demonstrates a reasonable likelihood of prevailing only as to 2 claims 
out of 23 claims challenged and only as to 1 of 4 asserted grounds of 
unpatentability); Chevron Oronite Co. v. Infineum USA L.P., IPR2018-
00923, 2018 WL 5862245 (PTAB Nov. 7, 2018) (informative) (applying 
discretion to deny a petition where the petitioner demonstrates a 
reasonable likelihood of prevailing only as to 2 claims out of 20 
claims challenged).
    As the Office explained in the Consolidated Trial Practice Guide, 
consideration of this case-specific analysis is ``part of a balanced 
assessment of all relevant circumstances in the case, including the 
merits.'' CTPG at 58 (discussing consideration of the merits as part of 
a balanced assessment of the General Plastic factors); see also Fintiv, 
2020 WL 2126495, at *2-3, 6-7 (discussing consideration of the merits 
in the context of discretionary denial).
    Informed by similar considerations, the Office has also provided 
guidance on the number of petitions typically required by a petitioner 
to challenge the same patent at or about the same time. See CTPG 59-61 
(first introduced in Trial Practice Guide Update (July 2019) at 26-28, 
available at https://www.uspto.gov/TrialPracticeGuide3 (requiring 
petitioners to rank multiple petitions filed at the same time that seek 
to challenge the same patent)). The Board explained that, based on its 
prior experience, ``one petition should be sufficient to challenge the 
claims of a patent in most situations.'' Id. at 59. In some cases, 
depending on circumstances, ``two petitions by a petitioner may be 
needed, although this should be rare.'' Id. The Board, however, 
concluded that it is ``unlikely that circumstances will arise where 
three or more petitions by a petitioner with respect to a particular 
patent will be appropriate.'' Id.
    The Office is now considering promulgating rules based on the 
framework of the guidance provided in these decisions and in the 
Consolidated Trial Practice Guide, or a modified framework as 
appropriate, based on public input and further analysis. These 
considerations form the impetus for this request for comments and the 
questions presented below.

Discretion Under 35 U.S.C. 314(a) and 324(a)

Addressing Serial Petitions
    In General Plastic, the Board recognized the goals of the AIA and 
also ``recognize[d] the potential for abuse of the review process by 
repeated attacks on patents.'' 2017 WL 3917706, at *7 (citing H.R. Rep. 
No. 112-98, pt. 1, at 48 (2011)). To aid the Board's assessment of 
``the potential impacts on both the efficiency of the IPR process and 
the fundamental fairness of the process for all parties,'' General 
Plastic enumerated a number of nonexclusive factors that the Board will 
consider in a case-specific analysis for exercising discretion on 
instituting an IPR, especially as to ``follow-on'' or ``serial'' 
petitions challenging the same patent as challenged previously in an 
IPR, PGR, or CBM proceeding. Id. at *8. The General Plastic 
nonexclusive factors include: (1) Whether the same petitioner 
previously filed a petition directed to the same claims of the same 
patent; (2) whether, at the time of filing of the first petition, the 
petitioner knew of the prior art asserted in the second petition or 
should have known of it; (3) whether, at the time of filing of the 
second petition, the petitioner had already received a patent owner's 
preliminary response to the first petition or received the Board's 
decision on whether to institute review in the first petition; (4) the 
length of time that elapsed between the time the petitioner learned of 
the prior art asserted in the second petition and the filing of the 
second petition; (5) whether the petitioner provides an adequate 
explanation for the time elapsed between the filings of multiple 
petitions directed to the same claims of the same patent; (6) the 
finite resources of the Board; and (7) the requirement under 35 U.S.C. 
316(a)(11) to issue a final determination not later than one year after 
the date on which the Director notices institution of review. Id. at 
*7.
    Since General Plastic, the Office has explained that the 
application of the first General Plastic factor is not limited to 
instances where multiple petitions are filed by the same petitioner. 
For instance, in Valve I, the Board denied institution when a party 
filed follow-on petitions for IPR after the denial of an earlier IPR 
request of the same claims filed by the party's co-defendant. Valve I, 
2019 WL 1490575, at *4-5. The Board held that when different 
petitioners challenge the same patent, the Board considers the 
relationship, if any, between those petitioners when weighing the 
General Plastic factors. Id. The Office also explained, in Valve II, 
that the first General Plastic factor

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applies to a later petitioner when this petitioner previously joined an 
instituted IPR proceeding and, therefore, was considered to have 
previously filed a petition directed to the same claims of the same 
patent. Valve II, 2019 WL 1965688, at *4-5. The relationships between 
petitioners in follow-on petition scenarios depend on the circumstances 
of the follow-on petition scenario.
Addressing Timely Completion of Proceedings and Efficient 
Administration of the Office
    General Plastic also includes additional factors that are not 
limited to the follow-on petitions but are more generally directed 
toward the timely completion of proceedings and efficient 
administration of the Office. Under SAS, if the Board decides to 
institute based on one claim, it must institute on all claims and 
grounds set forth in the petition. SAS, 138 S. Ct. at 1359-60; Adidas 
AG v. Nike, Inc., 894 F.3d 1256, 1258 (Fed. Cir. 2018) (``[e]qual 
treatment of claims and grounds for institution purposes has pervasive 
support in SAS''). As explained in the Consolidated Trial Practice 
Guide, however, the Board may decide not to institute the petition if 
it determines that the petition meets the standards for institution in 
relation to fewer than all the challenges presented, even when the 
petition includes at least one claim subject to a challenge that 
otherwise meets the criteria for institution. CTPG at 64 (discussing 
Deeper and Chevron). Likewise, the Board may decide not to institute 
where deficiencies in the petition, such as a lack of particularity in 
identifying the asserted challenges, result in voluminous and excessive 
grounds. See Adaptics, 2019 WL 1084284, at *7-10.
Addressing Parallel Petitions
    As explained in the Consolidated Trial Practice Guide in relation 
to parallel petitions challenging the same patent at or about the same 
time, in the Board's experience, one petition should be sufficient for 
a petitioner to challenge the claims of a patent in most situations. 
CTPG at 59. The Office has explained that ``[t]wo or more petitions 
filed against the same patent at or about the same time (e.g., before 
the first preliminary response by a patent owner) may place a 
substantial and unnecessary burden on the Board and the patent owner 
and could raise fairness, timing, and efficiency concerns.'' Id. The 
Office has also explained that ``multiple petitions by a petitioner are 
not necessary in the vast majority of cases.'' Id. (``To date, a 
substantial majority of patents have been challenged with a single 
petition.'').
    Nonetheless, the Office explained that circumstances may exist in 
which more than one petition may be necessary, including, for example, 
when a patent owner has asserted a large number of claims in litigation 
or when there is a dispute about priority date, thereby requiring 
unpatentability challenges under multiple prior art references. Id. 
``In such cases two petitions by a petitioner may be needed, although 
this should be rare.'' Id. The Office also explained that ``based on 
prior experience, the Board finds it unlikely that circumstances will 
arise where three or more petitions by a petitioner with respect to a 
particular patent will be appropriate.'' Id. To aid the Board in this 
case-specific analysis for determining whether more than one petition 
is necessary, the Office directed the parties to address the issue in 
their pre-institution filings. Id. at 59-60.
Addressing Proceedings in Other Tribunals
    The Consolidated Trial Practice Guide explains that events in other 
proceedings related to the same patent, either at the Office, in U.S. 
district courts or at the U.S. International Trade Commission (ITC), 
may also impact the institution decision. CTPG at 58. In a prior 
precedential decision, for example, the Board found that the advanced 
state of a district court proceeding was a factor weighing in favor of 
not instituting under 35 U.S.C. 314(a), in addition to arguments under 
35 U.S.C. 325(d). NHK, 2018 WL 4373643, at *7. Such advanced 
proceedings in other tribunals have the potential to undermine the 
intent that AIA proceedings be quick and cost-effective alternatives, 
and instead may add costs, lengthen the proceedings, and risk 
coordinate branches of the Government having different outcomes on 
similar facts.
    Since designating NHK as precedential, the Board has applied 
nonexclusive factors that it considers in a case-specific analysis when 
a patent owner raises an argument for discretionary denial based on a 
parallel proceeding in another tribunal, such as a U.S. district court. 
The Board recently summarized these factors in Fintiv: (1) Whether the 
court granted a stay or evidence exists that one may be granted if a 
proceeding is instituted; (2) proximity of the court's trial date to 
the Board's projected statutory deadline for a final written decision; 
(3) investment in the parallel proceeding by the court and the parties; 
(4) overlap between the issues raised in the petition and in the 
parallel proceeding; (5) whether the petitioner and the defendant in 
the parallel proceeding are the same party; and (6) other circumstances 
that impact the Board's exercise of discretion, including the merits. 
Fintiv, 2020 WL 2126495, at *2-3. The Board explained that ``[t]hese 
factors relate to whether efficiency, fairness, and the merits support 
the exercise of authority to deny institution in view of an earlier 
trial date in the parallel proceeding.'' Id. at *3.
Public Input
    The Office already has received input from stakeholders on the 
Office policies discussed above and on use of the Office's discretion 
in institution of an AIA trial. The most prevalent input that the 
Office has received from stakeholders is that the case-specific 
analysis outlined in the foregoing precedential opinions and the 
Consolidated Trial Practice Guide achieves the appropriate balance and 
reduces gamesmanship. Among other things, stakeholders have indicated 
that the Office's use of discretion as outlined above helps to ensure 
that (a) AIA proceedings do not create excessive costs and uncertainty 
for the patent owner and the system, while (b) meritorious challenges 
by petitioners can be maintained.
    However, some stakeholders have proposed that the Office adopt a 
bright-line rule that it should use its discretion to preclude claims 
from being subject to more than one AIA proceeding, regardless of the 
circumstances. In other words, once a trial is instituted against 
certain claims, this proposal would preclude the Office from 
instituting further AIA trials that include challenges by any party to 
any of the same claims if the patent owner opposes institution.
    Other stakeholders have proposed that the Office should only permit 
more than one AIA proceeding if the follow-on petitioner is unrelated 
to the prior petitioner. A petitioner, a petitioner's real parties in 
interest, and privies of a petitioner would be limited to filing a 
single petition for a challenged claim, regardless of the 
circumstances.
    By contrast, the Office has received input from some stakeholders 
proposing that the Office adopt a bright-line approach that there 
should be no limits on the number of petitions that can be filed or the 
number of AIA trials that can be instituted against the claims of a 
patent, so long as the petition complies with statutory timing 
requirements, e.g., the one-year bar under 35 U.S.C. 315(b), and meets 
the particular institution

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threshold of showing that at least one claim of the patent is 
unpatentable.
    The Office has also received input from stakeholders proposing that 
the Office adopt a bright-line rule that precludes institution of an 
AIA trial against challenged claims if the patent owner opposes 
institution and any of the challenged claims are or have been asserted 
against the petitioner, the petitioner's real party in interest, or a 
privy of the petitioner in a district court or ITC action that is 
unlikely to be stayed.
    By contrast, the Office also has received input from other 
stakeholders proposing that the Office adopt a bright-line rule to 
eliminate any consideration of the state of any district court or ITC 
actions involving the challenged patent, so long as the petition 
complies with statutory timing requirements and meets the particular 
institution threshold of showing that at least one claim of the patent 
is unpatentable.
    In light of the various contrasting views from some stakeholders, 
the Office solicits further public input on what should be considered 
as part of a balanced assessment of the relevant circumstances when 
exercising its discretion to institute an AIA trial.
Issues for Comment
    The USPTO seeks comments on considerations for instituting AIA 
trials as it relates to serial and parallel AIA petitions, as well as 
proceedings in other tribunals. The questions enumerated below are a 
preliminary guide to aid the USPTO in collecting relevant information 
to assist in modifications, if any, to its current practices, and in 
the development of any possible rulemaking on this subject. The 
questions should not be taken as an indication that the USPTO has taken 
a position or is predisposed to any particular views. The USPTO 
welcomes comments from the public on any issues believed to be relevant 
to these topics, and is particularly interested in answers to the 
following questions:

Serial Petitions

    1. Should the Office promulgate a rule with a case-specific 
analysis, such as generally outlined in General Plastic, Valve I, Valve 
II and their progeny, for deciding whether to institute a petition on 
claims that have previously been challenged in another petition?
    2. Alternatively, in deciding whether to institute a petition, 
should the Office (a) altogether disregard whether the claims have 
previously been challenged in another petition, or (b) altogether 
decline to institute if the claims have previously been challenged in 
another petition?

Parallel Petitions

    3. Should the Office promulgate a rule with a case-specific 
analysis, such as generally outlined in the Consolidated Trial Practice 
Guide, for deciding whether to institute more than one petition filed 
at or about the same time on the same patent?
    4. Alternatively, in deciding whether to institute more than one 
petition filed at or about the same time on the same patent, should the 
Office (a) altogether disregard the number of petitions filed, or (b) 
altogether decline to institute on more than one petition?

Proceedings in Other Tribunals

    5. Should the Office promulgate a rule with a case-specific 
analysis, such as generally outlined in Fintiv and its progeny, for 
deciding whether to institute a petition on a patent that is or has 
been subject to other proceedings in a U.S. district court or the ITC?
    6. Alternatively, in deciding whether to institute a petition on a 
patent that is or has been subject to other proceedings in district 
court or the ITC, should the Office (a) altogether disregard such other 
proceedings, or (b) altogether decline to institute if the patent that 
is or has been subject to such other proceedings, unless the district 
court or the ITC has indicated that it will stay the action?

Other Considerations

    7. Whether or not the Office promulgates rules on these issues, are 
there any other modifications the Office should make in its approach to 
serial and parallel AIA petitions, proceedings in other tribunals, or 
other use of discretion in deciding whether to institute an AIA trial?

Andrei Iancu,
Under Secretary of Commerce for Intellectual Property and Director of 
the United States Patent and Trademark Office.
[FR Doc. 2020-22946 Filed 10-19-20; 8:45 am]
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