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cyberlaw informer #50

Welcome to the 50th issue of the Mishpat Cyberlaw Informer - 

Law on the net newsletter from

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In this issue:

1. Introduction

2. Computer & Internet law news and updates



1. Introduction


I would like to welcome the new subscribers who joined the Cyberlaw

Informer since the previous issue. 


I'm sorry that due to a technical error with my mail server, the

previous issue was sent out 4 times to all subscribers.

This issue is much longer than the regular issues, due to the many

Cyberlaw news items since the previous issue. Therefor I split the

newsletter in to two separate issues. This issue (#50) will include only

technology law news and updates. The next issue (#51) will be sent out

within the next 48 hours and will include two articles an a resource


I hope you enjoy reading the newsletter. Comments, tips, and articles

are always welcome. Send them to

The Mishpat Cyberlaw Informer Archive (issues 1-48) is located at:

Feel free to use any of the material, or forward the newsletter to a

friend. Just don't forget to mention that they can subscribe to the

Cyberlaw Informer by visiting

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2. Cyberlaw news and updates


The Cyberlaw Informer brings you the latest news about online and

technology law, with links to the full reports available on the web.

Top news


* French court orders Yahoo! To block Nazi auctions *

French Judge Jean-Jacques Gomez, ordered Yahoo! to 'make it impossible'

for French surfers to gain access to sales of Nazi memorabilia that

appear on a site it hosts. A auction site puts hundreds of

Nazi or neo-Nazi, and Ku Klux Klan objects up for auction each day,

including films, uniforms, daggers, photos and medals. Under French law,

it is illegal to exhibit or sell objects with racist overtones. Lawyers

representing Yahoo! Claimed that it was not technically possible for the

company to scan the content of all the sites carried on its service.

* Bidder's Edge crawler can not crawl eBay *

U.S. District Court Judge Ronald Whyte sided with eBay, issuing a

preliminary injunction barring Bidder's Edge from using an automated

system to search eBay's site for auction information. Whyte granted the

injunction on the grounds that Bidder's Edge's searches slowed or had

the potential to slow eBay's service.  eBay sued Bidder's Edge in

December, alleging that Bidder's Edge illegally trespassed on its site,

violated its copyright and trademarks and slowed its service for eBay


Whyte denied a broader injunction based on eBay's copyright and

trademark claims. He also left open the possibility that Bidder's Edge

could continue to display links to eBay's auctions on its site.

* Australian murder trial aborted due to online publication *

Two days into a murder retrial in Melbourne, Australia, Justice George

Hampel of Victoria's state Supreme Court discharged the jury and aborted

the trial because he was concerned the proceedings may have been

prejudiced by a downloadable document that detailed the accused's

alleged criminal history, posted in "Criminals Database" on CrimeNet, an

Australian site that sells background information on convicted


* settles with Disney's *

Internet search service announced that Walt Disney Co. and its

Internet portal agreed to pay $21.5 million to settle a trademark

dispute. sued Disney last year, claiming the's old

yellow square and green circle logo, that looked much like a traffic

light, infringed upon's trademark yellow background and green

circle. was ordered by the court to remove the traffic light


* FTC issues online advertising guidelines *

The U.S. Federal Trade Commission (FTC) issued guidelines aimed at

protecting online consumers by ensuring that products and services are

described truthfully in online ads and that consumers get what they pay

for. Under the new guidelines, to make a disclosure clear and

conspicuous, advertisers should, among other actions: 

Place disclosures near, and when possible, on the same screen as the

triggering claim; When using hyperlinks to lead to disclosures, make the

link obvious; Recognize and respond to any technological limitations or

unique characteristics of high tech methods of making disclosures, such

as frames or pop-ups; Prominently display disclosures so they are

noticeable to consumers, and evaluate the size, color and graphic

treatment of the disclosure in relation to other parts of the Web page;

Review the entire ad to ensure that other elements-text, graphics,

hyperlinks or sound-do not distract consumers' attention from the

disclosure;  Repeat disclosures, as needed, on lengthy Web sites and in

connection with repeated claims;  Use audio disclosures when making

audio claims; and more.

* U.S. busts software pirate ring *

A federal grand jury in Chicago indicted 17 people for allegedly

infringing the copyright on more than 5,000 computer software programs.

Programs available for downloading to those given access via a secure

Internet protocol included operating systems, applications such as word

processing and data analysis, games and MP3 music files. Four Intel

employees shipped hardware to the site in order to give it more storage

capacity. In exchange, they were to be given access to the pirated

software. Another defendant is a Microsoft employee who allegedly

supplied bootleg copies of Microsoft's products.

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Intellectual Property


* Copycat site copies too much *

Event-listing service Pollstar filed suit against alleging

that the competing concert-listing service routinely crawled Pollstar's

concert listings and inserted them in its own database. To test its

suspicions, Pollstar listed bogus events with fake names for bands,

venues and cities such as Calvin & Hobbes University, and then waited

for them to appear at Gigmania's site.,1367,36070,00.html

* Dr. Dre continues Napster actions *

Rap artist Dr. Dre handed Napster a list of 239,612 usernames of people

he claims illegally made his songs available online. He wants those

usernames banned from the Napster service, or blocked from trading his

songs online. Individuals blocked from Napster and feel they have been

misidentified, can tell Napster, which will then give that information

to the rapper's attorneys. If the artist does not individually sue the

software users, they will be reinstated.

* Ecards looses to E-cards *

Toronto-based, an electronic greeting card business, was hit

with $4 million in damages by a California jury that found against it in

a lawsuit filed by U.S. site Ecards may also loose its

domain name, following the jury's finding that it competed unfairly with


The case raises important questions about whether juries should be

allowed to decide relatively complex issues of Internet and intellectual

property law; and whether Internet firms could use U.S. competition law

to fight rivals that they could not defeat by using cybersquatting laws.

* Connectix beats Sony again * 

Connectix won another partial victory in its legal battle against Sony

over the Virtual Game Station (VGS), a software program that lets

consumers run PlayStation games on a personal computer. Judge Charles

Legge in San Francisco threw out seven of nine counts in a suit brought

by Sony that alleged Connectix violated Sony's

copyrights.                   An appeals court in February threw out a

temporary injunction Sony had received on the copyright claim that would

have prevented Connectix from distributing its software (a full report

about that ruling was published in Cyberlaw Informer #XX).

* Sony goes after another emulator *

Sony is suing Bleem, another software developer, for allegedly

infringing patents with a program designed to allow PlayStation games to

be played on a PC.

* Slashdot fires back at Microsoft *

Open-source site fired back at Microsoft over the software

giant's demand that it remove certain postings from its site. Microsoft

claims that republication on Slashdot of details of the Kerberos Web

security program included in Windows 2000, violated trade secrets, even

though Microsoft published these details on its site.

* 24/7 sues DoubleClick over patent *

Internet media firm 24/7 Media Inc. is suing DoubleClick Inc. for

alleged patent infringement. The lawsuit focuses on ad-serving

technology which serves ads to targeted Internet users. 24/7 Media owns

a patent for "On-Line Interactive System and Method for Providing

Content and Advertising Information to a Targeted Set of Viewers.",4586,2562746,00.html

* threatened by Hasbro *, a humorous site at which users can play the game of

Monopoly just to find that all software properties are owned by

MicroSoft, received a "Cease and Desist" letter from Hasbro Inc.,

requesting that the site be taken offline. Hasbro is the

manufacturer of the popular board-game Monopoly. MS-Monopoly was

featured as site of the week in Cyberlaw Informer #XXX.

* Taiwanese software pirates receive heavy sentence *

A Taiwanese court ruled that Chung Ti Technology, a Taiwanese company,

should pay Microsoft $7.8 million for stealing Windows 95 and other

software. Taiwanese police seized 58,000 copies of pirated software in a

raid of Chung Ti Technology's warehouse in Taipei. In a separate case,

Chung Ti's owner was sentenced to two years in jail for copyright.

* settles with online copier * settled with a copyright violator who had created a

collection of thousands of Penthouse images and posted them to a Usenet

group. The violator wrote a spidering program that crawled through and downloaded new images.,1283,36032,00.html

Domain names


* European Union approves .eu domain *

The European Council of Ministers unanimously approved the ".eu" domain

name. European institutions as well as private users and corporations

will be able to use the new domain.

* Academy wants Oscar domain names *

The Academy of Motion Picture Arts And Sciences (AMPAS) is going after

domain names related to the organization's famous "Oscar" Academy

Awards. Lawyers for AMPAS filed a trademark infringement lawsuit against

50 individuals and businesses holding domain names such as, and

* Microcell loses domain dispute *

Montreal based Microcell Solutions, lost in an arbitration procedure

regarding the domain name to B-Seen Design Group Inc. of

Toronto. The arbitrators sided with B-Seen, in a decision that seems to

suggest those who own trademarks to commonly used words may not

automatically see those trademark rights extended into cyberspace. The

arbitrators said that Microcell failed to prove its claim that B-Seen

was using in bad faith.

* Verizon want *

Verizon, recently launched by Bell Atlantic and Vodaphone Airtouch,

registered the domain name to thwart anyone from

mocking Verizon's wireless service. Verizon's lawyers' sent a letter to

Emmanuel Goldstein, publisher of 2600 Magazine, who registered However, 2600 doesn't want to "profit" from, only to mock a large company, which means that

the anti-cybersquatting law does not apply. To prove his point,

Goldstein registered,1367,36210,00.html

* goes after *, a leading online venture capital company, sued alleging infringement of the trademark and

unfair competition, claiming that chose its name to

mislead and confuse consumers.

* wants reel domains *

Online movie giant demanded that operators of two sites that

use the word "reel" in their names either license or stop using

those domain names. and declined a

royalty-free license offered as a means of avoiding a court battle.,1151,14946,00.html

* ICANN approves new registrars *

The Internet Corporation for Assigned Names and Numbers (ICANN)

announced that fourteen additional companies have qualified to be

accredited as domain name registrars in the .com, .net and .org domains.

The new registrars are from New Zealand, Korea, UK, Australia, Israel,

Canada, Hong Kong and the US. This brings the total number of companies

that have met the criteria for accreditation to 124.

* ICANN approves new dispute resolution provider *

ICANN announced that the CPR Institute for Dispute Resolution has been

designated an approved provider under their Uniform Dispute Resolution

Policy (UDRP) for domain name disputes. CPR, an alliance of 500 general

counsel of global corporations and partners of major law firms, is the

fourth dispute resolution provider to be designated by ICANN to handle

domain disputes. 

The CPR website:

Cyber crime


* Love virus suspects face minor offence *

Computer programmers and students suspected of having unleashed the

destructive "Love Virus" face only minor charges due to the lack of a

cybercrime law in the Philippines.

* International cooperation in fighting cybercrime *

The G8, the Group representing the world's leading industrialized

countries and Russia, agreed at their Paris meeting to increase

cooperation to fight cyber crime. The group backed France's call to

extend the powers of Interpol to fight not only illegal acts committed

with the help of new technologies, but cyber attacks against the systems


* U.S. launches online fraud center *

The U.S. Department of Justice announced a new center where the FBI and

other authorities will collect and analyze consumer complaints about

suspected fraud on the Internet. The Internet Fraud Complaint Center

(IFCC) was set up to assist people who fall victim to con artists,

illegal get-rich-quick schemes and other criminals who use the Internet

to advance their operations.

* Student arrested for online blackmail *

Nelson Robert Holcomb, a graduate student at Colorado State University

was arrested and accused of trying to extort money, a car and free

downloads from a company that sold digital books over the Internet.

Holcomb sent the company emails claiming he had discovered how to

download the books for free and would not reveal the weakness in return

for a sum equal to the retail value of the content on the company's Web

site, a 2001 Volvo wagon, two digital audio players, and unlimited free

downloads of the company's content.

* Canadian teenager pleads guilty to hacking *

A Montreal teenager pleaded guilty to hacking computer systems of

several Canadian and foreign institutions, including NASA, Harvard

University and the Massachusetts Institute of Technology (MIT). The

teenager now works for company developing e-commerce networks. Judge

Isabelle Lafontaine sentenced him to 240 hours of community work and one

year probation, during which he cannot log on to the sites he attacked.

The teen also agreed to give a talk to warn students about the evils of

cyber mischief.

* Journalist accused of hacking into rivals computer *

Jeffrey Hirschorn, a reporter with, an Internet site

concentrating on initial stock offerings, allegedly sabotaged the

computer system of rival Wall Street Source, his former employer, the

company claims in a lawsuit.

(Free registration with the NY Times required)

* Former employee convicted of source code theft *

David Hawkins, a former employee of Cisco Systems, was convicted by a

jury in Santa Clara of stealing the source code for a Cisco product,

called Private Internet Exchange (PIX), estimated to be worth billions

of dollars.

* Singaporean sends thousands of messages to government agencies *

Kendrick Tan sent more than 7,500 messages to three computer servers of

the Singaporean Housing and Development Board (HDB) in just over two and

a half hours last December. Tan, who was newly wed at the time, was

anxious for action on his application to buy a flat, which was delayed

after the HDB apparently misplaced some documents. He has been charged

with three counts of interfering with the lawful use of the HDB's e-mail


* Russians go to jail for sending hoax alarm *

Two Russians were sentenced to a year each in prison for posing on the

Internet as nuclear rocket commanders with plans to wipe out cities in

Europe. The hoax triggered the alarm of the U.S. FBI and police in

Austria, who both asked Russia to investigate. The two were convicted

under a statute that outlaws alarmist hoaxes causing material damage or

danger to the public.

* Former employee guilty of planting e-bomb

A jury in New Jersey found Tim Lloyd, 37, guilty of setting a software

time bomb that crippled his former employer's manufacturing capabilities

and cost the company more than $12 million. Lloyd, who worked at Omega

for 11 years until he was fired on July 1996, was the computer system

manager, and  the only employee responsible for maintaining, securing

and backing up the server. Lloyd was said to have destroyed the only

backup tapes.

* NHL hacked during playoffs *

The National Hockey League's (NHL) site was attacked and disabled in the

midst of the Stanley Cup playoffs. The league filed a formal complaint

with the FBI.

* Apache Site hacked *

Apache, provider of free Web-server software, suffered from server

misconfigurations, that enabled a hacker to replace Apache's logo and

its "Powered by Apache" tagline with a Microsoft logo and credit.,1283,36170,00.html

Policy & Regulation


* Indian parliament approves IT Bill *

India's lower house of parliament passed the information technology

bill. The bill would also enable the acceptance of electronic records

and digital signatures in government agencies. The IT bill, which also

changes evidence rules, must now be passed by the upper house.,1283,36360,00.html

* French auctioneers must license *

French buyers have been barred by a Paris court from taking part in

online auctions unless they use a state-approved auctioneer and pay

French value added tax (VAT). The ruling means that the state-controlled

monopoly of the auctioneering profession should apply to online sales

accessible in France.

* Committee votes to extend tax moratorium *

The U.S. House Judiciary Committee voted 29-8 to ask the full House to

approve a five-year extension of the current moratorium on Internet

sales taxes. The legislation would extend the ban that forbids state and

local governments from taxing online commerce. 36 state governors called

Congress to dump the moratorium and allow them to tax Web transactions


* Antitrust investigation against airline tickets *

The online ticketing venture soon to be launched by the largest airlines

in the U.S., is  facing an antitrust hearing before the Senate Commerce

Committee. It's also about to be investigated by the U.S. Department of

Justice (DOJ).

Privacy Spam and Consumer protection


* Producers of violent games are not liable for shooting *

The U.S. District Court for the Western District of Kentucky ruled that

intangible thoughts, ideas, and messages contained within games, movies,

and Web site materials are not products for purposes of strict products


Michael Carneal, then 14 years old, killed three girls and wounded five

others. Police seized Carneal's computer, and found that he went online

to consume material that was obscene, obscene for minors, pornographic,

sexually violent, and/or violent in content. Carneal was also a consumer

of violent computer and video games. The court dismissed negligence

charges against Internet, video game, and motion picture defendants

concluding that it was unreasonable to expect the defendants to have

foreseen the plaintiffs' injuries from Carneal's actions and, because

the injuries were unforeseeable, the defendants did not owe a duty of

care upon which liability can be imposed.

(Copy & Paste full URL)

* Wrongful death suit against online information site *

A wrongful-death lawsuit was filed against, for allegedly

selling information to a stalker. The man used it to track down and kill

a woman at her office. On his own site, the murderer detailed his plans

for the murder, including how he found her: "I found an internet site to

do that, and to my surprise everything else under the Sun. Most

importantly: her current employment. It's actually obscene what you can

find out about a person on the internet.",2294,500202018-500279400-501487274-0,00.html

* Anonymous Surfer Sues Yahoo Over Privacy *

An anonymous Internet user filed a lawsuit against Yahoo, charging the

company with violating federal and state law, as well as its own privacy

policy. The lawsuit alleges that Yahoo gave the plaintiff's personal

information to AnswerThink, an online consulting group, in response to a

subpoena, without first notifying "John Doe" that it was doing so. Yahoo

received the subpoena after AnswerThink filed a defamation suit against

the anonymous poster. Doe is a former AnswerThink employee who was fired

in March and denied a "significant cash payment and a large block of

stock" after AnswerThink learned his real identity from Yahoo.

* French government wants to register Internet publishers *

Critics of the proposed French Liberty of Communication Act, say the

government-sponsored legislation would encourage an "Internet mass

emigration", by requiring that the names of all who publish on the

Internet be registered with authorities. The legislation, passed by the

House and being debated in the Senate, would apply to any company that

hosts web pages viewable by the public.

* Bidders sue Ubid *

A group of disgruntled bidders filed a lawsuit against uBid, charging

that the online auctioneer defrauded them by canceling their low bids

for computers. The suit stems from an auction for Pentium III 733-MHz

computers in April. According to the suit, the winning bids ranged from

$53 to $353. But instead of shipping the items, uBid later sent a

follow-up email canceling the orders and offering a $50 coupon for

another uBid purchase, the suit alleges.

* FTC published online financial privacy rule *

The U.S. Federal Trade Commission (FTC) published a financial-services

privacy rule, that will for the first time regulate the

information-sharing practices of some Internet sites. The 159-page rule

requires financial institutions, such as online mortgage brokers, real

estate brokers and tax preparers, to notify customers about the

collection of personal information and to offer some a choice as to how

that data is shared. The FTC's rule is scheduled to take effect July




* Australian Stock Tips Publisher sent to jail *

Stephen Lewis Matthews, the operator of The Chimes, an Australian site

that included unlicensed securities reports, was sent to three months in

jail for contempt of court. The Supreme Court of New South Wales issued

injunctions in March preventing Matthews from dealing in securities,

including any dealing on the Internet. It also demanded Matthews publish

a notice on the Web site saying he is not licensed to deal in securities

or provide investments advice. The Court found Matthews guilty of

contempt of court after he continued to publish online in breach of the


* AOL to pay $3.5 million fine *

America Online (AOL), settled charges it improperly accounted for

certain advertising costs and agreed to pay a $3.5 million civil

penalty, the U.S. Securities and Exchange Commission (SEC) announced.

AOL reported profits for six of eight quarters during fiscal 1995 and

1996 instead of the losses it would have reported had advertising costs

associated with acquiring new customers been accounted for as expenses

instead of being deferred.

* Australian's charged with online stock manipulation *

The Australian Securities and Investments Commission (ASIC) accused

Steven George Hourmouzis of, Victoria, and Wayne John Loughnan of 

Queensland, with 19 criminal charges relating to spam emails and web

board postings that contained information on a U.S. company called

Rentech. ASIC alleges that the information was false and misleading and

was made to induce investors to purchase Rentech stock.

* E-Trade fined $20,000 * 

The National Association of Securities Dealers (NASD) Regulation, the

body that oversees all U.S. stock brokerages, handed a $20,000 fine to

E-Trade Securities, one of the largest online trading firms, for failing

to respond promptly to regulators' requests for information relating to

customer complaints.

Online Speech


* Playboy wins U.S. Supreme Court cable ruling *

The U.S. Supreme Court handed Playboy Enterprises a major victory,

striking down a law that required sexually explicit cable television

channels to completely block their signals to non-subscribing

households. In a 5-4 vote, the court agreed with Playboy's arguments

that the law was too broad and violated constitutional free-speech

rights. The court pointed to an alternative possibility that requires

cable channel operators to block any channel, free of charge, only if a

customer requests it. 

Full text at:

* gives high rating to racist sites *

The Simon Wiesenthal Center, a prominent Jewish anti-hate group, is

furious at search engine for giving racist sites high ratings. searches a database of sites and rates them by looking a

numerical criteria such as how often the site is bookmarked, how many

votes it receives, how much time people spend on the site, and how often

they come back. spokesman said that  differentiating on the

basis of content is equivalent to censorship. However the Wiesenthal

center argues that is already in the business of judging content

by rating the sites' quality.,1283,36499,00.html

* Chinese financial site punished by authorities *

Chinese authorities punished "China Finance Information Network", a

financial website, for spreading rumors that damaged the government's

image. The website was suspended from service for 15 days and was fined


* UK allows libel tourism *

The UK's highest court, the House of Lords, gave Russian businessman

Boris Berezovsky leave to bring a libel action against Forbes Magazine.

In a 3-2 ruling, the court ruled that Berezovsky had reputations to

protect in England and that English courts had jurisdiction, even though

the American magazine's circulation in the UK is small, noting that many

people would have read the article on the internet, lifting readership

of the December 1996 issue in England beyond the 2,000 copies that were

sold there.

Microsoft News


* Judge Jackson suggests three-way split *

U.S. District Court Judge Thomas Penfield Jackson rejected Microsoft's

plea that the company be allowed more time to prepare a defense to the

government's proposal to split the company in two. Jackson, who gave

strong indications that he supports splitting the company, also

dismissed Microsoft's request for summary judgment, which asked the

judge to immediately dismiss the breakup plan. The DOJ and 17 state

attorneys general want Judge Jackson to order Microsoft be split into a

company that handles operating systems and another for all other

software applications. Judge Jackson indicated that prefers a

friend-of-the-court brief filed by the Software and Information Industry

Association (SIAA) and the Computer and Communications Industry

Association (CCIA), that calls for breaking the company into three, with

one entity focused on operating systems, a second on Internet

applications and a third on other applications.

* Sun looses round in Microsoft Java dispute *

Sun Microsystems was dealt another loss in its legal battle with

Microsoft over the Java programming language. U.S. District Court Judge

Ronald Whyte dismissed Sun's claim that Microsoft infringed on Sun's

Java-related copyrights. Last month, the judge rejected Sun's claim that

it didn't have to deliver Java upgrades that were compatible with

Microsoft's version of the programming language.

Misc. cyberlaw news


* Fox sues *

Fox News Network sued financial news site over's plans to cancel a TV show the two companies jointly

produce. said last week that it plans to cancel the show

because a new policy by Fox News prevents commentators from discussing

stocks they own and because of negative comments Fox officials made

about in a newspaper article.,1367,36514,00.html

* Chase Manhattan sues mortgage technology provider *

Chase Manhattan Mortgage Corp. is suing online mortgage technology

provider Mynd Corp. for more than $20 million, claiming that Mynd's

mortgage software was late and didn't perform as promised.

* Intel gets injunction against Broadcom and former employees *

A judge granted a preliminary injunction in Intel's suit against

Broadcom, that will force Broadcom to monitor information it obtains

from new employees about competitors. The court found that three former

Intel employees didn't disclose any confidential information to

Broadcom. But the court also found that Broadcom used the job interview

process to try to extract trade secrets.

* Fiber-optic network leads to mega-suit *

Global Crossing, an international communications carrier, sued Tyco

Submarine Systems, for $1 billion in damages. The suit is related to

agreements to install an undersea fiber-optic network linking the U.S.

and South America.

* Alaska moves from print to digital *

All Alaskan state agencies are now required by law to post all public

notices on the Internet. The system replaces the Alaska Administrative

Journal, a weekly publication of the lieutenant governor's office.

* Oracle sued for age discrimination *

Randy Baker, 55, a former executive vice president at Oracle, sued the

database software giant for age discrimination and wrongful termination.

Baker is seeking $18.5  million in lost compensation and damages.

* Death row inmate tries to sell execution tickets online *

Michael Toney, an inmate on death row for killing three people,

unsuccessfully tried to sell five seats for his execution on auction

site The posting was removed four hours after Toney posted his

offer. Condemned inmates in Texas are allowed five witnesses at their


That is all for this issue. The next issue including cyberlaw articles

will follow shortly.

Yedidya (Didi) M. Melchior 



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