Pharmaceutical IP and competition law in Switzerland: overview

A Q&A guide to pharmaceutical IP and competition law in Switzerland.

The Q&A gives a high level overview of key issues including patents, trade marks, competition law, patent licensing, generic entry, abuse of dominance and parallel imports.

For information on pharmaceutical pricing and state funding, manufacturing, marketing, clinical trials, advertising, labelling, and product recall and liability, visit Medicinal product regulation and product liability in Switzerland: overview.

To compare answers across multiple jurisdictions, visit the Pharmaceutical IP and competition Country Q&A tool.

The Q&A is part of the global guide to life sciences law. For a full list of jurisdictional Q&As visit www.practicallaw.com/lifesciences-guide.

Contents

Patents

1. What are the legal conditions to obtain a patent and which legislation applies? Which products, substances and processes can be protected by patents and what types cannot be patent protected?

Conditions and legislation

A patent is a registered proprietary right to an invention that is a new solution to a technological problem. Products and processes can be patented if the invention is:

  • Novel (that is, not already part of the prior art).

  • Not obvious to a person skilled in the art.

  • Suitable for industrial application (commercially applicable, suitable for execution and reproducible).

  • Not legally excluded from protection.

A patent gives its owner protection from another person commercially using his invention without permission.

Swiss patent law is codified in the Federal Patent Act and the related ordinance. The Patent Cooperation Treaty 1970 (PCT), the European Patent Convention 1973 (EPC) and related ordinances also apply to international or European patent applications.

Scope of protection

The Federal Patent Act was revised in 2007 to, among other things, provide rules for the patentability of biotechnological inventions, which are compatible with Directive 98/44/EC on the legal protection of biotechnological inventions (Biotech Directive). New processes for the production of existing products can also be protected by patent.

The following cannot be patented:

  • Ideas, hypotheses, discoveries, scientific theories, mathematical methods, rules of games, lottery systems, teaching methods, organisational procedures, aesthetic creations, computer programs "as such".

  • The human body at its various stages of development, and parts of it, in its natural environment.

  • The sequence (or part) of a gene existing in nature.

  • Methods of surgical or therapeutic treatment and diagnosis applied to humans or animals.

  • Varieties of plants or animals or essentially biological processes for the production of plants or animals.

  • Inventions, the implementation of which is contrary to the dignity of humans or creatures, public order or morality (such as procedures for cloning humans).

A detailed list of exemptions is set out in Article 1a, 1b and 2 of the Federal Patent Act.

Under certain circumstances patent protection is limited by law. In particular it is possible that third parties claim a non-exclusive licence to produce and export pharmaceuticals to a country with insufficient pharmaceutical capacity and in need of the product for combating public health problems.

 
2. How is a patent obtained?

Application and guidance

A national application must be filed with the Swiss Federal Institute of Intellectual Property (SFIIP) (www.ige.ch/en.html). The application fee is CHF200 and the fee for the examination of the application by the SFIIP is CHF500. The fees for an optional search by the SFIIP are CHF500 and CHF200 for an expedited examination. An annual extension fee must be paid after the end of the third year following the date of registration. The fees are CHF100 to CHF900 annually, depending on the year (CHF100 for year four: any subsequent year, the annual fee of the preceding year plus CHF50, up to CHF900).

Applicants can also file a:

  • European patent application with the European Patent Office (EPO) (www.epo.org).

  • Patent Cooperation Treaty application with the SFIIP if domiciled in Switzerland or a Swiss national, or with WIPO (www.wipo.int) or in some cases with the EPO.

All three websites provide application guidance.

Process and timing

The national application must be submitted on the official form. A patent application includes:

  • A description of the invention.

  • At least one formal patent claim.

  • An abstract.

  • If necessary, technical drawings. The technical documentation must be in German, French or Italian.

Once the application is submitted, the SFIIP checks whether the national application meets the formal requirements and whether the application fee has been paid. If this is the case, the applicant receives confirmation of receipt. Priority for further related patent applications can be claimed within one year following the application date. The patent application is published (at www.swissreg.ch) 18 months after filing.

About three to four years after application, the SFIIP examines whether the invention is capable of industrial application. The novelty and inventive steps requirements are not checked. Accelerated examination can be requested. If the statutory requirements are met, the patent is issued, registered and published (at www.swissreg.ch). Decisions of the SFIIP can be appealed before the Federal Administrative Court.

 
3. How long does patent protection typically last? Can monopoly rights be extended by other means?

Duration and renewal

Patent protection is valid for 20 years from the date when the application is submitted. The first term of protection is three years. Annual maintenance fees are due after then. Patent protection expires after 20 years and cannot be renewed (see below, Extending protection).

Extending protection

Similarly to the EU, a supplementary protection certificate (SPC) can be issued. The option for extending a patent specifically applies to medicinal products and is intended to take into account the period between patent registration and grant of marketing authorisation, during which clinical trials must be carried out.

An application for an SPC must be submitted to the SFIIP no later than six months after the grant of marketing authorisation or within six months from obtaining the patent if it is obtained after marketing authorisation is obtained. The certificate is valid from the date of expiry of the normal patent protection, for a period equal to the time between the date of the patent application and the date marketing authorisation was granted, less five years. The certificate is valid for up to five years and the maximum period of protection from the date on which the marketing authorisation is issued is 15 years. The SFIIP fee for issuing the SPC is CHF2,500. The annual fee is between CHF950 and CHF1,150.

 
4. How can a patent be revoked?

Third parties have nine months from publication of the patent registration to oppose the patent registration with the SFIIP, on the grounds that its subject matter is excluded from the scope of protection. Further grounds of opposition are available in relation to European patents, such as:

  • Lack of novelty, inventive step or industrial application.

  • The patent does not disclose the invention in a manner sufficiently clear and complete for it to be carried out by a person skilled in the art.

  • The subject-matter of the patent extends beyond the content of the application as filed.

Third parties can also submit a nullity claim to the Federal Patent Court, after registration, on the grounds that:

  • The subject matter of the patent is not patentable.

  • The invention is not disclosed in the patent specification in such a way that a person skilled in the art could perform it.

  • The subject-matter of the patent extends beyond the content of the application as filed.

  • The registered owner is not the inventor or his legal successor and has not acquired the right to the patent under another title.

 
5. How is a patent infringed? How is a claim for patent infringement made and what remedies are available?

Conditions for infringement

The patent holder can take legal action under civil law or criminal law against any person who:

  • Unlawfully uses the patented invention (imitation is deemed to be use).

  • Refuses to indicate to the competent authorities the origin and volume of unlawfully manufactured products or of products that have been unlawfully put in circulation in his possession.

  • Removes the patent marking from products or their packages without authorisation from the patentee or the licensee.

  • Aids, abets, participates in or facilitates performance of any of the above acts.

Article 9 of the Federal Patent Act sets out exemptions from the effect of a patent. It includes among other things a research exemption, which states that the effects of the patent do not extend to acts undertaken for research or experimental purposes in order to obtain knowledge about the subject-matter of the invention including its uses, in particular any scientific research concerning the subject-matter of the invention is permitted.

Other exemptions covered by Article 9 of the Federal Patent Act are the private use exception and the educational use exception, stating that the effects of the patent do not extend to acts undertaken within the private sphere for non-commercial purposes or to the use of the invention for teaching purposes at educational institutions.

Applying for marketing authorisation for a medicinal product does not infringe a patent as such an application is not considered a commercial use of the patent. This is specifically mentioned in Article 9 para 1 let. c of the Federal Patent Act which states that the effects of the patent do not extend to acts necessary for obtaining marketing authorisation for a medicinal product in Switzerland or in countries with equivalent medicinal product control.

Claim and remedies

On 1 January 2012 the Federal Patent Court became active. This court replaced the 26 cantonal jurisdictions in patent matters. Its sentences can be appealed to the Federal Supreme Court.

Remedies for a patent infringement include:

  • Injunctions (preliminary or final).

  • Declaratory judgment.

  • Assignment of the patent.

  • Order to disclose the origin and quantity of the objects in the defendant's possession and to disclose the addressees and the extent of any transfer to commercial recipients.

  • Rendering of accounts.

  • Damages, redress or surrender of profits.

  • Publication of the judgment.

  • Destruction of infringing goods and their removal from the market.

  • Criminal sanctions.

  • Assistance from the customs authorities.

Decisions of the Federal Patent Court can be appealed to the Federal Supreme Court.

 
6. Are there non-patent barriers to competition to protect medicinal products?

Undisclosed data that has been submitted to the authorities for obtaining marketing authorisation, the origination of which involves a considerable effort, is protected against unfair commercial use (Article 39(3), WTO Agreement on Trade-Related Aspects of Intellectual Property Rights 1994 (TRIPS)). In line with this principle, the LTP provides ten years of data exclusivity for original preparations.

Data exclusivity is granted for three years for data filed in support of an authorisation for a new:

  • Indication for an original preparation.

  • Way of administering an original preparation.

  • Galenic form of an original preparation.

  • Dosage of an original preparation.

If the new indication, way of administration, galenic form or dosage leads to a significant therapeutic improvement, the marketing authorisation holder can apply for five years of protection.

 

Trade marks

7. What are the legal conditions to obtain a trade mark and which legislation applies? What cannot be registered as a trade mark and can a medicinal brand be registered as a trade mark?

Conditions and legislation

A trade mark must be a graphically reproducible sign which is distinctive, that is, capable of distinguishing a person's or enterprise's goods or services from those of another, provided no absolute grounds for refusal are given.

Trade mark rights are enforceable from their date of application or their seniority date, provided they will be registered. Trade marks used abroad, and which are well-known in Switzerland within the meaning of Article 6bis of the Paris Convention ("notorious marks"), enjoy the same protection as a registered mark.

The legislation that applies to trade marks includes the Federal Law on the Protection of Trademarks and Indications of Source of 28 August 1992, and the related Ordinance of 23 December 1992.

Scope of protection

Medicinal brands can generally be registered and are examined independently by the SFIIP (trade mark registration) and by Swissmedic (market authorisation).

However, registration can be refused if the mark:

  • Lacks distinctiveness (for example, international non-proprietary names).

  • Is misleading.

  • Is contrary to public order, morality or applicable law.

Registration of a specific shape as a trade mark can also be refused if the shape constitutes the nature of the goods, or the shape of the goods or of their packaging is technically necessary.

 
8. How is a trade mark registered?

Application and guidance

The SFIIP registers trade marks (www.ige.ch/en.html). Guidance is available on its website.

The application fee for a national application is CHF550 and covers up to three product/service classes. There is a supplementary fee of CHF100 for each additional class.

International trade mark registrations are also protected in Switzerland if they have a Swiss designation.

Process and timing

An application for a national trade mark is made on an official form. Provided it is admitted for trade mark protection, the mark is protected as from the application date. The application is examined generally within either:

  • Three to six months after payment of the application fees.

  • Ten working days after its filing, if both:

    • the electronic application is clearly registrable;

    • the list of goods and services only covers those contained in the SFIIP's electronic database of accepted goods and services (preponed examination).

A fast track method with a maximum processing time of one month for the first examination (registration or provisional refusal) and of two months for each further step in the application process is available for all kinds of applications for an additional fee of CHF400. If trade mark registration is refused, it is possible to file an opposition against the refusal. The SFIIP's decision can be appealed. Once registered, the trade mark is published on www.swissreg.ch. Publication triggers a three-month opposition period.

 
9. How long does trade mark protection typically last?

The registration is valid for ten years from the date of application.

The registration of a trade mark can be renewed indefinitely for further ten-year periods. The renewal fee for a national trade mark is CHF700.

 
10. How can a trade mark be revoked?

If the trade mark is not being used for a continual period of five years without important reasons, it becomes vulnerable to cancellation. Third parties can file a cancellation action for non-use with the competent court.

Third parties can also file a nullity court action if they believe that the mark should not have been registered due to absolute grounds of refusal, or because it has become generic.

A collective trade mark or guarantee mark is cancelled if either:

  • The regulations do not satisfy or no longer satisfy the legal requirements, and the owner does not remedy this within the deadline set by the court.

  • The owner tolerates repeated use that infringes essential provisions of the regulations and does not remedy this within the deadline set by the court.

Finally, the Swiss designation of an international registration is revoked following a successful central attack on the foreign basic registration.

 
11. How is a trade mark infringed? How is a claim for trade mark infringement made and what remedies are available?

Conditions

A trade mark is infringed if both:

  • The earlier (senior) trade mark is identical or confusingly similar to the later (junior) sign (mark, company name or domain name).

  • The senior trade mark claims protection for goods and/or services which are identical or of the same kind as the goods and/or service for which the junior sign is registered or used in the course of trade.

Other grounds of infringement include using a guarantee or collective mark in a manner contrary to the applicable regulations.

Claim and remedies

The owner of the senior trade mark can file an opposition with the SFIIP against the registration of the junior trade mark, within three months of the date on which the junior trade mark is published. Opposition proceedings are inexpensive and quick. The SFIIP's decision can be appealed to the Federal Administrative Court.

As long as there is no forfeiture of claim, a civil or criminal action can be filed in court against a trade mark infringer.

Remedies for trade mark infringement include:

  • Injunctions (preliminary or final).

  • Declaratory judgment.

  • Assignment of the trade mark.

  • Order to disclose the origin and quantity of the objects in the defendant's possession and to disclose the addressees and the extent of any transfer to commercial recipients.

  • Rendering of accounts.

  • Damages, redress or surrender of profits.

  • Publication of the judgment.

  • Destruction of infringing goods and their removal from the market.

  • Criminal sanctions.

  • Assistance from the customs authorities.

 
12. Outline the regulatory powers and enforcement action against counterfeiting in the pharmaceutical sector.

Swiss legislation provides for several means to combat the counterfeiting and illegal distribution of medicines. The LTP prohibits the distribution of medicinal products that are not authorised and provides for severe sanctions. The customs authorities are entitled to hold back shipments of pharmaceutical products at the Swiss border or in a customs warehouse if they suspect an infringement of the LTP (Article 66 para 4, LTP). Customs authorities will then call upon the enforcement authorities (Swissmedic or cantonal authorities) to make further inquiries and take the necessary measures. Swissmedic has made combating the illegal trade of medicinal products a priority and is in close contact with foreign authorities. Switzerland signed the Medicrime Convention of the Council of Europe in 2011. Changes of the law necessary for its ratification are currently being prepared.

Swissmedic and the cantons monitor compliance with manufacturing and marketing authorisations. They verify by periodic inspections that the conditions for the authorisations are met. Swissmedic and the cantons can also, without incurring costs, take samples, request essential information and documents, and ask for any necessary help.

Swissmedic and the competent authorities of the cantons can generally take any administrative measure necessary to enforce the LTP. With regard to breaches of the manufacturing licence, Swissmedic can

  • Raise objections and set an appropriate time period for re-establishment of the lawful situation.

  • Suspend or revoke the licence (this decision will be published by Swissmedic).

  • Close down the establishment.

  • Seize, hold in official storage or destroy pharmaceuticals which endanger health or which do not conform to the LTP.

  • Prohibit the distribution, supply, import, export and trade in foreign countries of pharmaceuticals, order their immediate recall from the market, or order the publication of recommendations of conduct to prevent damage.

Apart from such administrative measures, Swissmedic and the competent cantonal courts can also impose criminal sanctions.

 

IP and competition law issues

13. Briefly outline the competition law framework in your jurisdiction and how it impacts on the pharmaceutical sector. In particular, the competition authorities and their regulatory powers, key legislation, whether pharmaceutical investigations are common, key recent activity and case law.

The relevant legislation in the field of competition law is the:

  • Federal Act of 6 October 1995 on Cartels and other Restraints of Competition (Cartel Act, CartA).

  • Ordinance of 17 June 1996 on the Control of Concentrations of Undertakings (Merger Control Ordinance, MCO).

  • Ordinance of 12 March 2004 on Sanctions imposed for Unlawful Restraints of Competition (Cartel Act Sanctions Ordinance, CASO).

The competent administrative authority for the enforcement of Swiss competition law is the Swiss Competition Commission (ComCo). ComCo acts on its own accord or upon complaint by anyone.

In case of unlawful agreements among competitors on prices, territories or quantities, unlawful vertical agreements on absolute territorial protection or resale price fixing or abuse of a dominant position, ComCo can impose fines going up to 10% of the turnover of the last three business years of the undertaking concerned.

Private parties can also sue other parties in civil courts. Any person hindered by an unlawful restraint of competition from entering or competing in a market is entitled to request the elimination of or desistance from the hindrance, damages and satisfaction and/or surrender of unlawfully earned profits, in accordance with the provisions on agency without authority.

Although due to the price regulation of reimbursed medicinal products the pharmaceutical sector is to a wide extent excluded from the scope of application of the Cartel Act, there have been a number of investigations. In 2000 ComCo decided that the market regulations established by the Sanphar association infringed Cartel law. The market regulations provided among others for rebate band widths for manufacturers and wholesalers and margins for pharmacies and self-dispensing doctors. Soon after this decision, the Sanphar association was dissolved.

Also in 2000, ComCo decided that the price fixing cartel regarding vitamins was illegal.

In 2010, ComCo held that price recommendations for retail prices of the drugs Viagra, Cialis and Levitra amounted to unlawful resale price maintenance. The prices of these drugs are not subject to governmental price control. The reasons for the decision were among others that the recommendations were followed by more than 80% of pharmacies and that the retail prices were entered into a very widely used IT system. The three companies in question were fined with a total of over CHF5 million. A first decision of the Federal Administrative Court, which annulled ComCo's decision based on the reasoning that the Cartel Act was not applicable, was revoked by the Federal Supreme Court in 2015. Now the case is again pending before the Federal Administrative Court.

Besides these cases, many mergers of pharmaceutical companies have undergone Swiss merger control.

ComCo has been conducting a preliminary investigation regarding the distribution of pharmaceutical products in Switzerland since September 2010. Apart from a final report of 11 May 2015 on a partial aspect of the preliminary investigation (regarding allegations of abuse of market dominance against Alloga, the biggest pre-wholesaler in Switzerland) no findings have become known yet.

 
14. Briefly outline the competition issues that can arise on the licensing of technology and patents in a pharmaceutical context.

According to the Cartel Act, agreements fixing prices or quantities and agreements allocating geographical markets or customer groups between effective or potential competitors are defined as "hard core" cartels and are subject to a direct sanction regime.

Also vertical agreements stipulating minimum or fixed sales prices as well as distribution systems with exclusive sales territories excluding sales by other approved suppliers are critical and subject to the direct sanction regime. These types of restraints may be contained in licence agreements. There is only little guidance in case law and literature about in which situations such restraints may be justified.

Further, the abuse of a dominant market position can also be directly sanctioned. Refusals to grant a license, unfairly high royalties and discrimination among licensees or customers may constitute abusive practices, if such conduct cannot be justified by legitimate business reasons.

 
15. Are there competition issues associated with the generic entry of pharmaceuticals in your jurisdiction?

There are no particular competition issues associated with the generic entry of pharmaceuticals and there is no corresponding case law.

Due to the price regulations for reimbursed products, generic entry as a rule leads to a considerable price reduction for the originator product.

 
16. Have abuse of dominance issues arisen in the pharmaceutical sector in your jurisdiction?

In a preliminary investigation, ComCo assessed in 2006 whether the price for the pharmaceutical Thalidomid Pharmion was abusively high. In a prima facie analysis ComCo came to the conclusion that there were no indications of abusive pricing. ComCo specifically mentioned that the question would become moot once its price has been reviewed by the FOPH and accepted for reimbursement.

In 2015 ComCo issued a final report on a preliminary investigation regarding Alloga, the biggest pre-wholesaler in Switzerland, in connection with the allegation that the pre-wholesaler had abused its dominant position by threatening counterparties to stop delivery if they did not agree to provide substantial securities. ComCo found indications for a market dominant position of the pre-wholesaler and for abusive behaviour, but did not open an in-depth investigation because the pre-wholesaler agreed in a settlement to change its practice.

 
17. Have parallel imports of pharmaceuticals raised IP and competition law issues in your jurisdiction?

The LTP requires that a parallel importer obtains a marketing authorisation for pharmaceuticals imported from other countries. Such marketing authorisation can only be granted if the products originate from a country with an equivalent marketing authorisation system.

Under patent law, generally the principle of regional exhaustion in the European Economic Area (EEA) applies (Article 9a, Federal Patent Act). The patent cannot be opposed either if the proprietor of the patent has placed patent-protected goods on the market outside the EEA or consented to their placing on the market outside the EEA and if the patent protection for the functional characteristics of the goods is only of subordinate importance. Subordinate importance is presumed unless the proprietor of the patent provides prima facie evidence to the contrary.

However, the Swiss patent owner's consent to parallel imports of patent protected products is always required if the price of the product in question is determined by public authorities in Switzerland or the country of origin.

For pharmaceutical products this is often the case. With regard to trade marks, the principle of international exhaustion applies according to the rules developed by the Swiss Federal Supreme Court. Although the Kodak decision of the Swiss Federal Supreme Court mentions that the use of a patent might amount to an abuse of a dominant position, there are no cases in which such an abuse was found.

 
18. Does a patent or trade mark licence and payment of royalties under it to a foreign licensor have to be approved or accepted by a government or regulatory body? How is such a licence made enforceable?

There is generally no such requirement.

 

Contributor profiles

Frank Scherrer

Wenger & Vieli AG

T +41 58 958 58 58
F +41 58 958 59 59
E f.scherrer@wengervieli.ch
W www.wengervieli.ch

Professional qualifications. Licence en droit, University of Neuchâtel, Switzerland, 1991; LL.M. in European Legal Studies, University of Exeter, UK, 1993; Dr.iur., University of Zurich, Switzerland, 1996; admitted to the Bar in Switzerland, 1999

Areas of practice. Pharmaceutical and health law; contract law; unfair competition and cartel law; advertising law; product liability law.

Recent transactions

  • Advising and representing pharmaceutical companies on a regular basis regarding marketing authorisation and reimbursement, contracts, advertising, sponsoring and gifts, clinical trials and data protection.
  • Representing pharmaceutical companies in appeal proceedings regarding price decreases and revisions of marketing authorisations.
  • Advising and representing pharmaceutical companies in disputes concerning contracts, product liability and unfair competition.
  • Advising pharmaceutical companies concerning outsourcing.

Languages. German, English, French

Caroline Müller Tremonte

Wenger & Vieli AG

T +41 58 958 58 58
F +41 58 958 59 59
E c.mueller@wengervieli.ch
W www.wengervieli.ch

Professional qualifications. Lic.iur., University of Zurich, Switzerland, 2004; admitted to the Bar in Switzerland, 2008; LL.M. International Business Law, National University of Singapore, 2012

Areas of practice. Pharmaceutical and health law; life sciences; data protection law; product liability law; unfair competition and cartel law; employment law.

Recent transactions

  • Advising pharmaceutical companies on a regular basis regarding contracts, advertising, sponsoring and gifts, and data protection.
  • Performing the legal review for the advertising and PR material of a multinational pharmaceutical company concerning Switzerland.
  • Advising and representing pharmaceutical companies in legal proceedings concerning product liability and regarding marketing authorisations.
  • Advising and representing pharmaceutical companies in appeal proceedings regarding price decreases and revisions of marketing authorisations.

Languages. German, English

Claudia Keller

Wenger & Vieli AG

T +41 58 958 58 58
F +41 58 958 59 59
E c.keller@wengervieli.ch
W www.wengervieli.ch

Professional qualifications. Lic.iur., University of Basel, Switzerland, 2001; LL.M. at University of Hastings, College of the Law, San Francisco, 2004, admitted to the Bar in Switzerland, 2006; CAS Brand Management (HSLU) 2007; Social Media Management (Somexcloud), 2011.

Areas of practice. Intellectual property law; advertising law; media law; life sciences; data protection law; product safety and liability law; unfair competition.

Recent transactions

  • Advising companies on a regular basis regarding intellectual property law, in particular trademark and copyright law including licensing contracts, advertising.
  • Advising companies on advertising regulation and data protection.
  • Advising and representing companies in legal proceedings concerning product safety and product safety compliance.

Languages. German, English

Caspar Humm

Wenger & Vieli AG

T +41 58 958 58 58
F +41 58 958 59 59
Ec.humm@wengervieli.ch
W www.wengervieli.ch

Professional qualifications. Lic.iur., University of Zurich, Switzerland, 2009; admitted to the Bar in Switzerland, 2014.

Areas of practice. Pharmaceutical and health law; life sciences; product liability law; corporate and commercial law; information technology and data protection law; intellectual property law; unfair competition law; litigation.

Recent transactions

  • Advising pharmaceutical companies and manufacturers of medical devices regarding contracts, co-operation with other stakeholders in the health sector, clinical trials and data protection on a regular basis.
  • Advising and representing pharmaceutical and other companies in legal proceedings concerning product liability.
  • Advising and representing pharmaceutical companies in appeal proceedings regarding price decreases and revisions of marketing authorisations.

Languages. German, English


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