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Hi Fibre Textiles (Sugoi) Ltd. v. Peter Anderson [2004] GENDND 657 (3 May 2004)


National Arbitration Forum

DECISION

Hi Fibre Textiles (Sugoi) Ltd. v.Peter Anderson

Claim Number: FA0403000243507

PARTIES

Complainant is Hi Fibre Textiles (Sugoi) Ltd. (“Complainant”), represented by David Wotherspoon, of Fasken Martineau DuMoulin, 2100-1075 West Georgia Street, Vancouver, BC, V6E 3G2, Canada.  Respondent is Peter Anderson (“Respondent”), of 636-205 Kimta Road, Victoria, BC, V9A 6T5.

REGISTRAR AND DISPUTED DOMAIN NAME 

The domain name at issue is <sugoi.com>, registered with Network Solutions Inc. (“Registrar”).

PANEL

The undersigned certifies that he has acted independently and impartially and to the best of his knowledge has no known conflict in serving as Panelist in this proceeding.

James Bridgeman as Panelist.

PROCEDURAL HISTORY

On March 2, 2004 Complainant submitted a Complaint in accordance with ICANN’s Uniform Domain Name Dispute Resolution Policy (the “Policy”) to the National Arbitration Forum (the “Forum”) electronically; the Forum received a hard copy of the Complaint on March 15, 2004.

On March 5, 2004, Registrar confirmed by e-mail to the Forum that said domain name <sugoi.com> is registered with Registrar, that Respondent is the current registrant of the name, that the status of the domain name registration is “active,” that the language of the Service Agreement is English, and that Respondent has submitted in its Registration Agreement to the jurisdiction at the location of the principal office of Registrar for court adjudication of disputes concerning or arising from the use of said domain name.

A Notification of Complaint and Commencement of Administrative Proceeding (the “Commencement Notification”), setting a deadline of April 5, 2004 by which Respondent could file a Response to the Complaint, was transmitted to Respondent via e-mail, post and fax, to all entities and persons listed on Respondent’s registration as technical, administrative and billing contacts.

On April 5, 2004 Respondent filed a Response by fax.

On April 8, 2004 Complainant filed an Additional Submission.

On April 19, 2004, pursuant to Complainant’s request to have the dispute decided by a single-member Panel, the Forum appointed James Bridgeman as Panelist.

RELIEF SOUGHT

Complainant requests that the domain name be transferred from Respondent to Complainant.

PARTIES’ CONTENTIONS

A. Complainant

Complainant holds several trademark registrations for the SUGOI mark, including registrations in the United States, United Kingdom, and Canada.  Complainant registered the SUGOI mark with Canadian authorities on January 27, 1989 (TMA 350434). Complainant has since then carried on an international business and currently has 612 international dealers, 1085 dealers in the United States and 661 dealers in Canada.

Complainant furthermore operates a website at <sugoi.ca> through which consumers worldwide can access information and purchase products bearing Complainant’s SUGOI marks.  In addition, Complainant owns the domain names <sugoi.net>, <sugoi.biz>, and <sugoi.info>. 

South-western British Columbia is Complainant's strongest area of business and the "home base" of the business where Complainant’s SUGOI marks have been used and promoted most extensively for the last 15 years.

In July 2000, Complainant and Respondent were involved in a dispute under the UDRP regarding the domain name <sugoi.com> at issue in these proceedings (eResolution Case No. AF-0232). The administrative panel dismissed that complaint. Complainant submits that said complaint was dismissed without prejudice, against Respondent on the sole basis that Respondent "appeared" to have a legitimate purpose for the said registration as he had a business plan to provide online services to the Japanese market. While the panel had doubts about the "soundness and efficacy of Respondent's plan," it found that there was "no direct evidence that his plan is a sham."  Therefore, the panel dismissed the complaint expressly "without prejudice to Complainant's refiling of a complaint in the event that evidence of illegitimate purpose and bad faith, based solely on conduct of Respondent after the rendering of this decision, arises."

Since that decision Respondent’s website at the <sugoi.com> address has not changed in any way - it remains a static website with a listing of links to miscellaneous other websites. Complainant submits that Respondent's inaction and passive holding of the website over the past three years is evidence of both illegitimate purpose and bad faith. 

Complainant further submits that the only apparent purpose for Respondent's holding of the domain is to frustrate Complainant in reflecting its trademarks in a corresponding domain name - <sugoi.com>. Respondent's use is illegitimate, made in bad faith and causes confusion with Complainant's trademarks.

Complainant submits that the following is the chronology of the key events that are relevant to this administrative proceeding:

· October 15, 1987 - Complainant began using its SUGOI marks. 

· 1994 - Complainant began what has become extensive and continuous sale of its products under the SUGOI marks in Japan. Complainant has annexed documentation to the Complaint supporting this assertion.

· September 1998 - Approximately a decade after Complainant began using its SUGOI marks, Respondent registered the domain name <sugoi.com> with Network Solutions Inc.

· Spring 1999 - Mr. David Hollands, on behalf of Complainant, contacted Respondent in connection with Respondent’s registration of the <sugoi.com> domain name.  Respondent did not state that it had any plans to use the domain name.  Respondent verbally indicated, and admitted in writing, its willingness to sell the domain to Complainant for an amount in excess of Respondent’s out-of-pocket costs directly related to the domain name.

· June 1999 - Respondent was a principal in a company called "Axess Mail Order Depot Ltd." Although the company had used that name since 1994, Respondent caused the company name to be changed in June 1999 to "Sugoi Online Internet Services Ltd."  This change followed very shortly after Complainant contacted Respondent concerning the domain name.

· September 1998 to April 2000 - Prior to April 30, 2000 Respondent displayed some photographs of himself and his motorcycle on the website established at the  <sugoi.com> address and provided links to an apparently unrelated business called "Commission Junction." The Commission Junction website linked users to a list of links to "All Merchants," some of which dealt in wares similar or identical to the wares of Complainant.

· April 11, 2000 - Complainant's lawyer, Mr. Wotherspoon, contacted Respondent by e-mail letter, demanding that Respondent transfer said <sugoi.com> registration to Complainant.

· April 17, 2000 - Respondent's lawyer, Mr. Van Cuylenborg, replied to Mr. Wotherspoon indicating that his client would not agree to transfer said <sugoi.com> registration and that Respondent had commercial plans for the site.

· April 30, 2000 - Respondent changed its use of the website established at said <sugoi.com> address to provide links to various other web pages. Again, this change followed very shortly after Complainant and Respondent exchanged correspondence concerning the disputed domain name.

· May 2000 - Complainant filed a complaint against Respondent with eResolution (said eResolution AF-00232). In those proceedings Respondent contended that it had a business plan to use the site for online services aimed at the Japanese market. No copy of a business plan was submitted as part of the Response in that case.

· July 25, 2000 - The eResolution panelist determined that in light of Respondent's statements regarding his plan for <sugoi.com>, the panelist could not order the transfer of the domain name. The panelist expressed doubts about the "soundness and efficacy of Respondent's plan," but could find no direct evidence that his plan was a sham.  Therefore, the panelist expressly stated that the decision in that case (the "2000 Decision") was without prejudice to Complainant's ability to file another complaint against Respondent at a later date.

· July 25, 2000 to July 25, 2003 - Contrary to Respondent's alleged business plan, Respondent has not developed the <sugoi.com> website during the last three (3) years in any way.  The content of <sugoi.com> has remained unchanged since April 30, 2000.  The static site is composed of a simple list of links to four (4) Internet search engines, and forty (40) Japanese manufacturers and hotels.

· January 2003 to January 2004 - Complainant received complaints from people who had attempted to access Complainant's website through a link at a second website ("Non- affiliated Website") in an attempt to receive information about Complainant's products. The Non- affiliated Website attempted to link to Complainant’s Sugoi brand, but instead placed a link to Respondent's website at the <sugoi.com> address in each of the following examples,

i.          <thesportingwoman.com/friends.shtml>;

ii.         <theshoregroup.com/bio/elladee.htm>;

iii.        <travelsport.tv/manufacturers.html>; and

iv.         <ecospirit.ca/updates/update.2002.07.24.htm>.

Complainant submits that the contested domain name is virtually identical to the distinctive portion of all of Complainant's registered trademarks.

Complainant further submits that Respondent does not have any rights or legitimate interests in the contested domain name.  Pursuant to Paragraphs 4(c)(i), (ii) and (iii) of the Policy, Respondent has not used the domain name in connection with the bona fide offering of goods or services; Respondent has not been commonly known by the domain name; and Respondent is not making a legitimate non-commercial or fair use of the domain name.

 

Furthermore, Complainant submits that Respondent has made no bona fide offering of goods on its website established at the <sugoi.com> address and the fact that Respondent has been engaged in passive holding of the site for over three years belies its previous statements regarding its planned use of said <sugoi.com> domain. Said passive holding is disrupting the business of Complainant and preventing Complainant from reflecting its trademark in a corresponding domain name.

Considering Respondent's failure to develop the site in the intervening period, Respondent's bald assertion of a "plan" is insufficient to show a bona fide offering of goods or services.  In Tourism and Corporate Automation Ltd. v. TSI Ltd., AF-0096 (eRes. Mar. 26, 2000), the panel held that "it will not be sufficient for a domain holder to merely assert that it has plans for the commercial use of the domain name" since "a domain name holder in a domain name dispute easily could make an assertion of planned use."

The following circumstances cast a colorable shadow on Respondent’s claim to have a legitimate interest in the domain name:

· The crystallization of Respondent's commercial plans to use the domain name came after Complainant contacted Respondent;

· The change in Respondent's company name after it was contacted by Complainant;

· The change in content of the web-page immediately after Respondent received a letter from Complainant's lawyer;

· Respondent is not commonly known by the domain name.  Although Respondent changed the name of its company to "Sugoi Online Internet Services Ltd." in June 1999, there is no local address or telephone number listed for this business in the white pages, yellow pages or Canada 411 Internet directories;

· Respondent's company - "Sugoi Online Internet Services Ltd." - appears to be in default as the last annual report filed was on November 8, 2001, and

· Furthermore, the incorporation of the name "Sugoi Online Internet Services Ltd." cannot be used to show Respondent is known by that name since the name was only incorporated after Respondent became aware of Complainant's concerns. In this regard Complainant cites the decision in Credit Management Solutions Inc. v. Collex Resource Management, D2000-0029 (WIPO Mar. 21, 2000);

· Respondent's current passive holding of the site is not a legitimate, non-commercial or fair use of the domain name as required by Paragraph 4(c)(iii) of the Policy. The April 30, 2000 changes to Respondent’s website do not constitute legitimate non-commercial use of the site.

Respondent's passive holding of the <sugoi.com> domain name prevents Complainant from reflecting its registered SUGOI marks in a corresponding domain name.

Passive holding of a domain can amount to bad faith use in the right circumstances: Telstra Corporation Limited v. Nuclear Marshmallows, D2000-0003 (WIPO Feb. 20, 2000). Respondent's passive holding of <sugoi.com> is in and of itself evidence of bad faith registration and use of the <sugoi.com> domain: American Home Products Corporation v. Haymont Veterinary Clinic, D2000-0502 (WIPO Aug. 2, 2000).  In Awesome Kids LLC v. Selavy Communications, D2001-0210 (WIPO Apr. 20, 2001), the administrative panel found that, "continuing retention and minimal use of the contested domain name, now over a period stretching approximately 18 months amounts to passive holding which, while being fully cognizant of Complainant's trade-mark rights, evidences bad faith use."

There is no apparent development by Respondent of a commercial online service for Japan as was claimed at the time.  The only apparent use now is that the domain is being passively held in bad faith to prevent Complainant from pursuing a legitimate business interest in the domain.

Since at least the Spring of 1999, and well before Respondent registered <sugoi.com>, Respondent has been well aware of Complainant's trademark rights. Given the close geographic proximity of Respondent to the most intensive area of Complainant's business, Respondent must be deemed to have known about Complainant's SUGOI marks prior to registering the domain. 

While passive holding is alone sufficient to establish bad faith, there are several other indicia of Respondent's bad faith and use of <sugoi.com>. Although Respondent was careful not to make a clear offer to sell the domain to Complainant, there is strong circumstantial evidence to suggest that Respondent registered the domain for the primary purpose of selling it to Complainant.  Respondent verbally indicated and admitted in writing its willingness to sell the domain to Complainant for an amount in excess of Respondent’s out-of-pocket costs directly related to the domain name.

B. Respondent

Respondent relies on the finding of the panel in eResolution AF-0232 that it has rights and legitimate interests in the <sugoi.com> domain name.  Moreover, Respondent asserts that it is primarily using the domain name for web hosting and e-mail services.

Respondent refutes Complainant’s allegation that Respondent attempted to sell the <sugoi.com> domain name registration.  Respondent asserts that Complainant contacted Respondent and attempted to induce Respondent to solicit an offer for the domain name registration. 

Respondent claims that it has lacked the resources to develop the site beyond its current state, but has plans to do so in the future. Respondent has provided no evidence of these plans. Also, Respondent states that it has been reluctant to further develop the website for fear of reprisal from Complainant.  Respondent is willing to post a disclaimer on the website to reduce confusion and provide a link to Complainant’s website.

Respondent further submits that Complainant’s mark is generic.  Respondent asserts that the word “sugoi” is a Japanese word that translates to “cool” or “awesome.”

Respondent primarily relies on the previous panel’s finding that the <sugoi.com> domain name was not registered or used in bad faith.

Furthermore, Respondent asserts that it did not register the <sugoi.com> domain name in order to sell the domain name registration to Complainant for a profit.  Respondent argues that it did not register or use the domain name in bad faith pursuant to Paragraph 4(b)(i) of the Policy because Complainant initiated the discussion of selling the domain name.

Moreover, Respondent asserts that it is willing to provide a disclaimer and link to Complainant’s website.

 C.        Additional Submissions

In Additional Submissions, Complainant submits that Respondent’s submissions omit certain required elements.  Most significantly, they fail to include the required certification that the contents are complete and accurate.  This is a material failing on the part of Respondent.  Complainant submits that arbitration should proceed as though no Response had been filed.

FINDINGS

Most of the facts are not in dispute. The significant areas of conflict between the Parties relates to the inferences that can be taken from the matters discussed at the alleged conversation between Complainant’s representative and Respondent and whether Respondent had a bona fide business plan to develop a website at the <sugoi.com> Internet address.

This Administrative Panel makes no finding of fact in relation to said alleged conversation, but for reasons given below, finds that on the balance of probabilities Respondent did not have a bona fide business plan for said domain name.

DISCUSSION

Paragraph 15(a) of the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”) instructs this Panel to “decide a complaint on the basis of the statements and documents submitted in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable.”

Paragraph 4(a) of the Policy requires that Complainant must prove each of the following three elements to obtain an order that a domain name should be cancelled or transferred:

i. the domain name registered by Respondent is identical or confusingly similar to a trademark or service mark in which Complainant has rights;

ii. Respondent has no rights or legitimate interests in respect of the domain name; and

iii. the domain name has been registered and is being used in bad faith.

Preliminary Procedural Issues

There are two procedural issues to be addressed in this decision.

Res Judicata

Both parties previously were involved in a dispute over the said <sugoi.com> domain name viz. Hi Fibre Textiles (Sugoi) Ltd. v. Anderson, AF-0232 (eRes. July 25, 2000).  The administrative panel in that case found that Respondent had a business plan for the domain name and therefore had rights and legitimate interests in the domain name.  The administrative panel took a most unusual step however and dismissed the complaint “without prejudice to Complainant’s filing of a Complaint in the event that evidence of illegitimate purpose and bad faith, based solely on conduct of Respondent after the rendering of this decision, arises.” This was clearly because of the administrative panel’s reservations relating to Respondent’s defence.

Because that complaint was rejected without prejudice to Complainant’s right to refile in those circumstances, and because the subject matter of these proceedings relate primarily to the inference that can be taken from inactivity by Respondent subsequent to the earlier decision, the issue of res judicata does not arise in this case.  See Cluett, Peabody & Co., Inc. v. Sanford Bus Writing Serv., FA 95842 (Nat. Arb. Forum Dec. 12, 2000) (allowing a Complaint to be refiled because the previous Panelist had “expressly reserved the right of Complainant to recharge bad faith registration and use of the domain name in or [at] issue”); see also Jones Apparel Group Inc. v. Jones Apparel Group.com, D2001-1041 (WIPO Oct. 16, 2001) (allowing refiling as the previous Panelist gave the “green light in the clearest possible way to refiling the Complaint [emphasis in original]”).

Admissibility of Response

Complainant has alleged that Respondent’s failure to include the certification statement required by ICANN Rule 5(b)(viii) makes the Response deficient. In the view of this Administrative Panel it would be inappropriate to rule the Response inadmissible due to such a minor formal deficiency. As this Administrative Panel is finding for Complainant it would be pointless in the circumstances to ask Respondent to file a Response in proper form.  See Strum v. Nordic Net Exch. AB, FA 102843 (Nat. Arb. Forum Feb. 21, 2002) (finding that "[r]uling a Response inadmissible because of formal deficiencies would be an extreme remedy not consistent with the basic principles of due process").

Identical and/or Confusingly Similar

Complainant has established that it has rights in the SUGOI trademark through its various registrations. It is noteworthy that there is a limitation on the United Kingdom registration to the effect that the registration gives Complainant no right to the exclusive use of the word SUGOI and that the word “sugoi” means “awesome” in Japanese. Nonetheless, Complainant’s registrations are sufficient to establish its rights for the purposes of the first element in the test required under the Policy.  See Janus Int’l Holding Co. v. Rademacher, D2002-0201 (WIPO Mar. 5, 2002) (finding that Panel decisions have held that registration of a mark is prima facie evidence of validity, which creates a rebuttable presumption that the mark is inherently distinctive.  Respondent has the burden of refuting this assumption).

Respondent’s domain name is identical to Complainant’s mark. The domain name <sugoi.com> consists of Complainant’s trademark with the addition of “.com.” The presence of the “.com” element is irrelevant in making this determination. This is not an issue in dispute between the parties.  See Pomellato S.p.A v. Tonetti, D2000-0493 (WIPO July 7, 2000) (finding <pomellato.com> identical to Complainant’s mark because the generic top-level domain (gTLD) “.com” after the name POMELLATO is not relevant); see also Rollerblade, Inc. v. McCrady, D2000-0429 (WIPO June 25, 2000) (finding that the top-level of the domain name such as “.net” or “.com” does not affect the domain name for the purpose of determining whether it is identical or confusingly similar).

The domain name is clearly identical to Complainants mark.

Respondent’s Rights or Legitimate Interests

There has been no change in Respondent’s website for over three years. It is common cause that Respondent has an active site at the domain address consisting essentially of links to other sites. Complainant has alleged that this amounts to passive holding. The fact that the content is not changing does not mean that the site is inactive. Because the site has been active, notwithstanding that the content has remained unchanged, this Administrative Panel rejects Complainant’s claim that Respondent has been engaged in passive holding of the domain name.

Respondent’s inactivity over the past three years is however relevant to the issue of whether Respondent has any rights or legitimate interest in said domain name. In earlier proceedings Respondent claimed to have a business plan for the site. He succeeded in those proceedings primarily for that reason. At that time, the administrative panel clearly held some doubts as to whether that was a bona fide defense and clearly expressed these concerns.

Respondent claims that it has lacked the resources to develop the site beyond its current state, but has plans to do so in the future. Respondent further states that it has been reluctant to further develop the website for fear of reprisal from Complainant. Respondent has not furnished any evidence of these alleged plans.

Furthermore in a letter dated April 17, 2000, a copy of which has been submitted as an annex to the Complaint, Respondent’s lawyers state that it “has been actively engaged in technology and ‘internet’ business for eight (8) years.” This being the case, on balance it is more likely that Respondent would have had sufficient resources to develop the site to some extent if it had the mind to do so.

In the circumstances Respondent’s explanation is not convincing and consequently this Administrative Panel accepts that Complainant has established on the balance of probabilities that Respondent has no rights or legitimate interests in the said domain name. See Wal-Mart Stores, Inc. v. Walmarket Canada, D2000-0150 (WIPO May 2, 2000) (finding that Respondent had no rights or legitimate interests where he decided to develop the website for the sale of wall products after receiving Complainant’s “cease and desist” notice); see also Household Int’l, Inc. v. Cyntom Enter., FA 95784 (Nat. Arb. Forum Nov. 7, 2000) (holding that Respondent’s “vague and unsupported assertion of ‘plans to sell household goods, supplies and appliances over the Internet’” was insufficient to be considered proof of a legitimate business plan); see also Open Sys. Computing AS v. Alessandri, D2000-1393 (WIPO Dec. 11, 2000) (finding that Respondent did not establish rights and legitimate interests in the domain name where Respondent mentioned that it had a business plan for the website at the time of registration but did not furnish any evidence in support of this claim); see also LFP, Inc. v. B & J Props., FA 109697 (Nat. Arb. Forum May 30, 2002) (finding that despite suffering significant injuries as a result of an accident, “the Panel would not only need to excuse the Respondent’s past 2+ year delay but also sanction that delay to extend for an indefinite amount of time into the future. This the Panel will not do.”).

Registration and Use in Bad Faith

In the earlier proceeding the panel was not convinced that Respondent had registered and was using the domain name in bad faith, but the panelist clearly had concerns on this aspect also and stated: “The Panel finds no credible evidence that the mark was registered in bad faith … The panel … recognizes that the non-testimonial procedures do not afford the ability to test and evaluate credibility. An ability to probe the credibility of Respondent’s protestations and Complainant’s assertions could well advance the question. That alternative is not available here. The indicia of bad faith relied upon by Complainant in this case (e.g. timing of registration, geographic proximity to Complainant) create only a hint that Respondent knew of Complainant’s mark. Standing alone, that does not suffice. However under the prevailing rules, and in the light of counteravailing explanations, and the ability to evaluate credibility, none of the assertions of Complainant establish bad faith …

The fact that Respondent has not made any changes to the content of the website in over three years allows this Administrative Panel to infer that the concerns of the panel in Hi Fibre Textiles (Sugoi) Ltd. v. Anderson, AF-0232 (eRes. July 25, 2000) were well founded and Respondent never had any bona fide intentions of putting a business plan into place.

It would appear that there was no substantial evidence of such a business plan provided to the administrative panel in the earlier proceedings and Respondent has not provided any such evidence in these proceedings.

In the circumstances, and given the clear reservations expressed by the administrative panel in the earlier proceedings, the explanations given by Respondent for its inaction over the past three years are not convincing.

Complainant has established that on the balance of probabilities, Respondent was aware of Complainant’s business and presumably its trademark rights when Respondent registered said domain name. Respondent may have also been aware that the word means “awesome” in the Japanese language, as it would appear that Respondent lived in Japan for a period of time; however, the evidence relating to the content of Respondent’s website prior to Complainant’s first challenge would seem to indicate that the focus on Japan was not the reason for the registration in the first place.  See Digi Int’l v. DDI Sys., FA 124506 (Nat. Arb. Forum Oct. 24, 2002) (“there is a legal presumption of bad faith, when Respondent reasonably should have been aware of Complainant’s trademarks, actually or constructively.”); see also Orange Glo Int’l v. Blume, FA 118313 (Nat. Arb. Forum Oct. 4, 2002) (“Complainant’s OXICLEAN mark is listed on the Principal Register of the USPTO, a status that confers constructive notice on those seeking to register or use the mark or any confusingly similar variation thereof.”); see also Pfizer, Inc. v. Papol Suger, D2002-0187 (WIPO Apr. 24, 2002) (finding that because the link between Complainant’s mark and the content advertised on Respondent’s website was obvious, Respondent “must have known about the Complainant’s mark when it registered the subject domain name”).

On the balance of probabilities Respondent has registered said domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to Complainant who is the owner of the SUGOI trademark and service mark or to a competitor of Complainant, for valuable consideration in excess of Respondent’s documented out-of-pocket costs directly related to the domain name.  See Pocatello Idaho Auditorium Dist. v. CES Mktg. Group, Inc., FA 103186 (Nat. Arb. Forum Feb. 21, 2002) ("[w]hat makes an offer to sell a domain [name] bad faith is some accompanying evidence that the domain name was registered because of its value that is in some way dependent on the trademark of another, and then an offer to sell it to the trademark owner or a competitor of the trademark owner"); see also Little Six, Inc v. Domain For Sale, FA 96967 (Nat. Arb. Forum Apr. 30, 2001) (finding Respondent's offer to sell the domain name at issue to Complainant was evidence of bad faith).

DECISION

Accordingly, it is Ordered that the <sugoi.com> domain name be TRANSFERRED from Respondent to Complainant.

James Bridgeman Panelist
Dated: May 3, 2004


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