SENADI protects widely recognised unregistered trademarks

DETAILS

DATE: 03-07-2024

PROFESSIONALS INVOLVED IN THE ARTICLE:

Andrea Miño

MEDIA:

– WTR

  • SENADI has declared the nullity of the mark SAVOY TORONTO on the ground that the application had been filed in bad faith
  • The applicant had full knowledge of the prestige of the SAVOY and TORONTO marks and of their original owner
  • The mark was applied for to take advantage of the original owner’s positioning and prestige

The Ecuadorian IP Office (SENADI), in a significant move that aligns local practice with Andean jurisprudence in recent prejudicial interpretations, has declared the nullity of a trademark that is widely recognised by consumers in different jurisdictions, and was registered in Ecuador by a party other than its legitimate owner. 

Background

The IP offices of the Andean Community member states, which play a pivotal role in safeguarding trademark rights, may declare – either ex officio or at the request of an interested party – the nullity of a trademark registration when it has been granted in contravention of the absolute or relative grounds set forth by the law. This includes the infringement of third-party rights, bad faith and unfair competition. 

In 2021 SENADI granted the registration of a trademark composed of two marks, SAVOY and TORONTO, in Class 30. These trademarks had been previously registered abroad and are fully recognised based on their business origin (Nestlé). The applicant purchased the original products in his own country and sold them in Ecuador under the trademark SAVOY TORONTO. He had been aware of the Toronto and Savoy products and their business origin for several decades, since they are widely known and favoured in several countries, including Venezuela (the applicant’s birthplace).

Decision

Community jurisprudence states that, to prove the existence of bad faith in trademark applications or registrations, the plaintiff must prove that the applicant/owner had prior knowledge of the trademark and demonstrate, at least, the existence of a contractual relationship between the parties. Although there was no contractual relationship in this case, the facts and evidence confirmed that the applicant had full knowledge of the prestige of the SAVOY and TORONTO trademarks and of their original owner. 

SENADI also analysed when the original trademark owner offered its products in Ecuador before the application. It concluded that the mark was applied for to take advantage of the owner’s positioning and prestige, and to obtain exclusive rights over the mark to prevent third parties (including the legitimate owner) from offering and marketing them in the Ecuadorian territory.

In Resolution No OCDI-2024-202 (26 March 2024), SENADI considered that the existence of bad faith had been established and issued a resolution declaring that the trademark was null. The original trademark owner had offered the Savoy and Toronto products since 2018, three years before registration was applied for.

In addition to the broad knowledge of the TORONTO and SAVOY trademarks recognised by SENADI, the resolution was also based on the fact that the marks identify a particular business origin (Nestlé).

Comment

SENADI, through Resolution No OCDI-2024-202, not only acknowledged but also underscored the severity of the trademark infringement in this case. SENADI found that the applicant sought to take undue and unjustified advantage of the prestige of Nestlé’s trademarks, qualifying the case as an act of unfair competition aiming to confuse consumers as to the origin of the products.

The resolution constitutes a strong precedent against actions that may damage trademark holders’ rights. Trademarks with a wide recognition may be registered by third parties seeking to obtain an undue advantage, which is contrary to good faith and competition.

Read the article in WTR here.

This article first appeared in WTR Daily, part of World Trademark Review, in (July 2024). For further information, please go to www.worldtrademarkreview.com.

Protecting IP rights through criminal actions: insights from a recent court ruling

DETAILS

DATE: 12-04-2024

PROFESSIONALS INVOLVED IN THE ARTICLE:

Maria Cecilia Romoleroux

MEDIA:

– WTR

  • In a recent case, counterfeit goods were released and the prosecutor ordered to close the investigation 
  • An expert was asked to assess the infringing goods pursuant to the principle of evidentiary freedom
  • Based on the expert’s report, the judge rejected the prosecutor’s request to close the case

Background 

In August 2021 a reform to the Criminal Law corrected several errors which, in practice, made it impossible to prosecute and sanction IP crimes. The minimum appraisal of seized goods was reformed (except for foreign trade cases) and a penalty of imprisonment (of up to one year) was reintroduced.

The reform also clarified several aspects to be considered in a crime (eg, the appraisal of the goods based on the price of the genuine goods and the possibility of reaching an agreement between the parties), which put an end to litigations.

Recent court ruling

In practice, although these provisions are regulated by law, certain prosecutors and judges have unfortunately not proceeded as expected. For example, in a recent case, an infringer appeared before a judge of constitutional guarantees, arguing a violation of the principle of legal certainty due to an alleged late notification by Customs, which resulted in the release of the counterfeit goods. The prosecutor hearing the case ordered that the investigation be closed, arguing that, with the release of the goods, there was no crime to prosecute.

IP crimes should be prosecuted following the criminal justice principles established in the Criminal Law. One of these principles is that of “evidentiary freedom”, which allows the parties to provide elements that may be considered as evidence, which will be subsequently assessed as to their relevance and usefulness. In other words, based on this principle, a wide range of opportunities are open to lawyers to prove that a crime has been committed – in this case, an IP crime.

Based on the principle of evidentiary freedom, an expert was requested to assess the infringing goods based on the documents and pictures in the official records. The expert’s assessment concluded that the released goods were counterfeit, which proved that a crime had been committed and should therefore be investigated.

The expert’s report was submitted to the judge, who reviewed all the documentation submitted, and rejected the prosecutor’s request to close the case. The judge also ordered that the case be brought to the attention of a higher authority within the Attorney General’s Office, stating that the investigation of a possible crime should be prioritised. 

A new prosecutor must now be appointed so that the investigation may continue and sanctions may be imposed (including a term of imprisonment of up to one year and a fine of up to $138,000).

Comment

This court ruling is important as it shows that, despite limitations in training, a lack of specialised IP knowledge and the abuse of constitutional actions, it is possible to obtain an adequate outcome by submitting documents demonstrating the mistakes made by the authorities, and by providing the judges with tools to support their decisions. 

The protection of IP rights can be achieved by using all the available mechanisms and principles established by the Criminal Law for all types of crime, as IP crimes cannot be considered as minor crimes. 

Read the article in WTR here.

This article first appeared in WTR Daily, part of World Trademark Review, in (April 2024). For further information, please go to www.worldtrademarkreview.com.

International Women’s Day: Interview with Maria Cecilia Romoleroux

DETAILS

DATE: 8-03-2024

PROFESSIONALS INVOLVED IN THE ARTICLE:

Maria Cecilia Romoleroux

In the framework of International Women’s Day, our partner Maria Cecilia Romoleroux was interviewed by Gericó Associates about the current situation of gender equality in the legal sector. Below, we share some of her most outstanding reflections:

  1. Progress and challenges in diversity: Romoleroux noted that Ecuador has seen significant improvements in terms of diversity in the legal sector, with a notable decrease in the gender gap. However, she stressed the need to continue working on education so that the role of women is recognized not only as mothers and partners, but also as professionals capable of facing any challenge. She added that as long as women do not understand their role and obligations to the community, changes will be difficult.
  2. Priority on gender equality policies: Regarding gender equality policies in law firms, Romoleroux emphasized that they should be a priority for all law firms. She stressed the importance of establishing policies based on meritocracy, with clear rules and strong support to ensure their effectiveness.
  3. Overcoming barriers in the partnership: Given the worrying reality that reveals a remarkably low representation of women in partnership roles, as evidenced by the case of Spain, where only 21% of partnerships in law firms are held by women, Romoleroux addressed this gender disparity, noting that correcting these figures will require women to become aware of their capacity to lead and accept the challenge of overcoming existing barriers. She acknowledged that while it may be more difficult for women to rise to leadership positions due to the multiple roles they play, it is critical that they rise to the challenge.
  4. Boosting equality in the future: The implementation of measures to support and recognize female talent is a priority to promote diversity in the legal sector in the coming years, according to Romoleroux.
  5. Inspiration in pioneering women: Finally, our partner shared that her professional career has been inspired by all those women who, throughout history, have defied the established rules to achieve their goals.

The interview with Maria Cecilia Romoleroux provides insight into the challenges and opportunities faced by the legal sector in terms of gender equality, as well as the way forward to achieve greater inclusion and diversity in the profession.

Read the full story here.

The doctrine of clarifications in Ecuador: rules and procedures

DETAILS

DATE: 26-01-2024

PROFESSIONALS INVOLVED IN THE ARTICLE:

Maria Cecilia Romoleroux

MEDIA:

– WTR Daily

WTR Daily published an article written by our partner Maria Cecilia Romoleroux, in which she explains the rules and procedures related to the doctrine of clarifications in Ecuador. 

  • The doctrine of clarifications limits the cases in which last-instance judges are obliged to request a preliminary interpretation from the Andean Court of Justice

In her analysis, she points out that the Article 33 of the Treaty on the Creation of the Andean Community Court of Justice, Article 123 of the Statute of the Andean Community Court of Justice, and Resolution 14-2017 of the Supreme Court of Ecuador determine that last-instance judges must, in all cases where Andean communitarian rules are involved, forward the case to the Andean Court of Justice for a prejudicial interpretation of the content and scope of the Andean rules at issue.

She also explains that the Prejudicial Interpretations No 145-IP-2022, 261-IP-2022,350IP-2022 and 391-IP-2022 acknowledge that the doctrine of clarifications is fully compatible with such mandatory consultation, and conclude that there are cases in which the local court is not required to request a new interpretation if such rules have already been interpreted.

  • Mandatory consultation for a prejudicial interpretation is maintained in four cases

Maria Cecilia emphasizes that the mandatory consultation for a prejudicial interpretation is maintained in four cases, which may be summarized as follows:

  1. Where the Andean Court of Justice has not previously issued a prejudicial interpretation of the Andean rules at issue; this includes cases where the Andean rules have been modified and have not been subject to a preliminary interpretation;
  2. Where, although certain Andean rules have already been interpreted, others rules applicable to the case have not;
  3. If, although a preliminary ruling has previously been issued, the court considers that the Andean Court of Justice must clarify, expand or modify the legal interpretative criterion, explaining the reasons why it believes that the existing interpretation is not clear, the circumstances to be taken into account for the interpretation to be expanded, or the arguments that support the need to modify the jurisprudential line resolved through the preliminary ruling on this specific issue; and
  4. Where the court notices inevitable questions about hypothetical situations that, in the abstract, arise from, or are linked to, the corresponding Andean rules.
  • The Andean Court of Justice recently issued a Guidance Information Note in this respect, setting out a four-step process

Our partner outlines that, in order to determine the obligation to request a prejudicial interpretation, through Accord 06-2023 dated 7 July 2023, the Andean Court of Justice set forth a Guidance Information Note on the application of the legal criterion for the interpretation of the clarified act in requests for prejudicial interpretations, setting out a four-step process:

  • Step 1: Determine whether, in this specific case, an Andean rule must be applied or is in dispute, and whether it must request a prejudicial interpretation.
  • Step 2: Determine whether a clarified act exists. At this stage, make it clear that, according to the jurisprudence of the doctrine of clarifications, it is not necessary to request a new interpretation.
  • Step 3: Identify the prejudicial interpretation that contains the legal interpretative criterion for the corresponding rule.
  • Step 4: Determine whether the case at issue does not fall within the four circumstances in which a prejudicial interpretation is mandatory.

Finally, she points out that on its website, the Andean Court of Justice has developed two options to search for prejudicial interpretations that apply the doctrine of clarifications:

  1. rulings that recognise a clarified act; and
  2. an index of interpretative legal criteria that constitute a clarified act.

If you want to read the full article, click here.

This article first appeared in WTR Daily, part of World Trademark Review, in (January 2024). For further information, please go to www.worldtrademarkreview.com.

A conversation with Maria Cecilia Romoleroux, partner at CorralRosales

DETAILS

DATE: 01-12-2023

PROFESSIONALS INVOLVED IN THE ARTICLE:

Maria Cecilia Romoleroux

“My law degree and specialization in Intellectual Property were not choices I made, but rather a destiny that chose me.”

It was with these words that María Cecilia Romoleroux —recognized through multiple international awards and appointments, including the Chambers Women in Law Awards— dove into an exclusive conversation with Ekos Violeta Magazine.

Her journey in the legal world began when a family member, surprisingly and without consulting with her, enrolled her in law school. At the time, she could never have imagined that she would become a distinguished attorney with a career spanning more than three decades.

Maria Cecilia’s story begins in the 1990s when, at the age of 20, started an intellectual property practice with a friend and fell in love with intellectual property. However, as so often happens in life, challenges arose, and Maria Cecilia experienced difficult times that included harassment and discrimination, which ended up triggering her decision to find her way in the profession. Although it was a rocky path, she never doubted that her potential would lead her to break glass ceilings.

“At the age of 24, young and afraid, I decided to seek my independence and not stand idly by in a world that often resists women having prominent roles,” she said. Although some people frowned at her way forward, Maria Cecilia leaped into the unknown, not knowing what awaited her, but always confident of herself.

More than two decades ago, María Cecilia first began working at the CorralRosales law firm and contributed to its growth, demonstrating that women can reach high positions in the legal world.

Impactful Strategies

From her position as a firm partner, she has implemented programs and workshops to promote gender equality and empower women. One of them is the Entrepreneur Program, which seeks to support new ideas and business models, launched by entrepreneurs, that contribute to the dynamization of the Ecuadorian business ecosystem. The program pays special attention to initiatives generated by female talent, minority groups, and the LGTBQ+ community. Support is provided to them through the firm’s pro-bono program and specialized legal counsel with preferential conditions.

Maria Cecilia has not only achieved her own personal success, but also advocates to empower future generations. “I have always had a special focus on social facets because for me, the right thing to do is pave the way and work to make things easier for other young women and future generations, generating a new reality, one with fewer obstacles to overcome,” she says.

She concludes with a powerful piece of advice: “The world has evolved, and there is no turning back. We need to educate and train ourselves, trust ourselves, and change our mentality. We women are not victims, and we can be the protagonists of our lives.

Maria Cecilia’s story reminds us that, with determination and self-confidence, it is possible to reach heights and positions traditionally thought to be reserved for.

If you want to read the complete article, click here (pages 34 and 35).

Well-known and Renown trademarks; nullity actions for bad faith – new jurisprudential precedents-

DETAILS

DATE: 07-09-2023

PROFESSIONALS INVOLVED IN THE ARTICLE:

Andrea Miño

MEDIA:

WTR Daily

Our associate Andrea Miño Moncayo published the following article in WTR Daily “Well-known and Renown trademarks; nullity actions for bad faith – new jurisprudential precedents-” and analyzed the Preliminary Interpretation 128-IP-2022, published in the Official Gazette of the Court of Justice of the Andean Community on October 11, 2023. This jurisprudence identified possible signs that could lead to the conclusion that there is bad faith in the registration of a well-known trademark that has not been registered in the Community territory.

How does the Community legislation address the issue of a trademark´s nullity within the Andean Community? The Andean Community legislation establishes that the Andean IP Offices may declare ex officio or at the request of a third party with a legitimate interest, the nullity of a trademark registration when it has been granted in contravention of the relative or absolute grounds established in the regulation or obtained in bad faith.

Miño stated that the relative grounds refer to whether the registration was granted in violation of third-party rights, bad faith, or unfair competition. On previous occasions, community jurisprudence established that in order to prove the existence of actions contrary to good faith, the plaintiff was obliged to prove that the applicant had prior knowledge of the registered trademark and to demonstrate, at least, the existence of a contractual relationship between the parties. Nevertheless, there were no jurisprudential precedents that developed nullity actions in relation to well-known trademarks.

The Court clarifies that, in the case of well-known or renowned trademarks, the IP Office must evaluate this prior knowledge. If the trademark is renowned abroad, it would not be necessary to prove the existence of a prior relationship between the applicant and the legitimate owner of the trademark. If this trademark is well-known, it would be sufficient to demonstrate that the applicant is part of the relevant segment that is aware of the notoriety of the applied for or registered trademark.

These signs do not apply to non-well-known or non-renowned trademarks, i.e., ordinary trademarks and there is not, moreover, at least a competitive connection between the goods and services protected by the conflicting trademarks.

How to identify “opportunistic behavior and possible bad faith of a trademark applicant? The Court emphasizes that the “opportunistic behavior” of the applicant to determine a bad faith action, can be revealed when the applicant intends to appropriate several trademarks used and known abroad, without there being a real use on its part in the local market.  This would show that the applicant’s intention in obtaining this plurality of registrations could be to sell them to their original owners when they are interested in the community market.

Through this interpretation, the Court seeks to avoid the appropriation of well-known and internationally renowned trademarks by unauthorized third parties. This infringement of trademark rights has increased in our country through registration applications filed indiscriminately at the IP Office by third parties other than the original owners, as well as through the commercialization of goods not authorized to use these trademarks.

In this sense, the author concludes, the Court establishes a precedent against actions that may generate damage to the rights of foreign persons or companies, whose trademarks, due to the wide recognition acquired, were registered by third parties within the community territory looking for an unfair advantage, configuring actions contrary to good faith.

This article first appeared in WTR Daily, part of World Trademark Review, in October 2023. For more information, go here.

The 2023 Latin American and Caribbean Competition Forum was held in Ecuador

DETAILS

FECHA: 12-11-2023

PROFESSIONALS INVOLVED IN THE ARTICLE:

 –Christian Razza

On September 28-29, 2023, the Latin American and Caribbean Competition Forum (FLACC), promoted by the Organization for Economic Cooperation and Development (OECD) and the Inter-American Development Bank (IDB), was held in the city of Quito. Our associate, Christian Razza, writes a reflection on this event in an article for The Legal Industry Reviews (LIR).

Razza points out that the FLACC is an annual event in which international experts and competition authorities from around the world share experiences in the application of competition law.

He also notes that this year’s event, which Ecuador hosted for the first time, discussed the following topics: poverty, sports, and the Dominican Republic’s peer review.

1. Competition and poverty

In this regard, Razza points out that during the FLACC, the role of competition policy in poverty reduction was discussed, considering that poverty reduction continues to be a priority for Latin American and Caribbean countries. He adds that the event provided examples of how competition authorities can contribute through their actions to poverty reduction, both from the point of view of enforcement and advocacy.

In the same context, Razza stresses that Eleanor Fox, professor emeritus at New York University School of Law, explained that the lack of competition in food markets hurts the poorest households the most and that more competitive markets foster long-term employment growth.

2. Competition and sports

On this topic, Razza indicates that key competition issues related to the sports industry were discussed, including competition in the organization of sports leagues (e.g., the existence of a monopoly and possible abusive behavior by league organizers), sports broadcasting rights, the sale of tickets for sporting events, and sports labor markets.

He adds that the Spanish National Commission for Markets and Competition pointed out in its intervention that in Europe the process of interaction between competition and sport will be influenced by the rulings of the Court of Justice on the International Skating Union and the Super League, which will be handed down at the end of this year. These rulings will either intensify the trend towards greater application of competition law to sport or limit it.

3. Peer reviewed Dominican Republic’s competition regime 

In this regard, our partner specifies that this review is an instrument that allows evaluating the policies, strategies and activities of the country and its effectiveness, to achieve its social and economic objectives in accordance with international best practices in competition law. He adds that Ecuador was subjected to this review in 2021 and that the competition law and policy standards of the Dominican Republic were evaluated by its peer countries as follows: representatives of Costa Rica evaluated the institutional aspects, Chilean technicians reviewed the defense issues, and their Mexican peers oversaw the competition advocacy aspects.

To conclude, Razza emphasizes that the FLACC is one of the most important events for the international competition community and, therefore, the fact that Ecuador has hosted the FLACC will allow the Superintendence of Economic Competition and Ecuador to propose and participate in a leading role in the debates and dialogues that determine the progress of research in the field, as well as to facilitate the dissemination of knowledge and cutting-edge methodologies with the actors of the Ecuadorian regime in favor of the markets.

If you want to read the complete article, click here.

Some current (and other permanent) issues of Foreign Trade Operator (FTO) qualification – ADA Journal

DETAILS

DATE: 09-10-2023

PROFESSIONALS INVOLVED IN THE ARTICLE:

Fernanda Inga

MEDIA:

ADA

Our senior associate, Fernanda Inga, published an article in the Asociación de Agentes de Aduana de Guayaquil magazine in which she analyzes recent amends regarding Foreign Trade Operators (FTO), their classification and the procedure to acquire and renew authorizations from SENAE (Servicio Nacional de Aduana del Ecuador).

She explains that, following the approval of the Executive Decree 586, the law distinguishes two types of FTO, those that require an authorization from SENAE, such as customs agents, and those that do not require such authorization. These include importers, exporters, transporters as well as any person “intervening directly or indirectly in a foreign trade operation”, among others.

Fernanda also explains that, regarding changes to the procedure required to obtain and renew the previously mentioned authorizations, the approval procedure is immediate. “A previous inspection is not necessary, and the application must be attended within a maximum period of 45 working days from the admission for review of the procedure”, she explains.

Likewise, she clarifies that the requirements that did not correspond to the customs activity or represented an obstruction to the qualification were eliminated.

In that sense “it is no longer necessary to submit corporate documents, IESS contribution forms, municipal license, fire department operating permit, among others. Nor is it an obstruction to the qualification to have incurred in 5% of regulatory faults over the total operations”.

However, new requirements were also established, such as the implementation of the ISO 9001 quality management system and anti-bribery policies.

“The purpose of these reforms is for the FTO to have access to agile, simplified, and clear procedures. However, it is recommended that applications for authorization or renewal be carried out with the assistance of a professional expert in the technical and legal fields to avoid errors that may delay or hinder the process”, she adds, stating that “the main obstacles faced by the FTO derive from the presentation of erroneous documentation”.

To read the full article, click here (pages 12 to 15): REVISTA_ANIVERSARIO_2023_C.pdf (ada.com.ec)

Recent IP Office decisions shed light on distinctiveness of 3D trademarks

DETAILS

DATE: 07-09-2023

PROFESSIONALS INVOLVED IN THE ARTICLE:

Andrea Miño

MEDIA:

WTR Daily

Our associate Andrea Miño publishes in WTR Daily (World Trademark Review) an article on ‘Distinctiveness of three-dimensional trademarks’ in which she analyzes how the Ecuadorian Office is conducting the examination based on the rules established by the Court of Justice of the Andean Community.

She recalls that according to the court, “3D marks should not be (i) a typical or common form used by competitors on the market, or (ii) a necessary form that meets the functionality requirements for the protected goods. As a result, 3D marks must exhibit intrinsic distinctiveness”.

Likewise, “the court emphasised that 3D marks must, by themselves, allow consumers to associate the protected goods with a particular corporate origin; therefore, they must have arbitrary shapes or display lines, strokes and/or reliefs creating a distinct impression that allows the goods to be differentiated from others sold on the market”.

In this context, she states, “the Ecuadorian IP Office has recently applied the guidelines established by the Andean Court, and denied or annulled rights pertaining to 3D marks. These decisions were made because the marks did not meet the necessary requirements for registration, and protection was pursued through additional elements making up the marks”.

For example, these criteria were the basis for the rejection of a 3D mark for the “Zafiro Chaide mattress and base design” because it did not comply with the necessary requirements; the distinctiveness of the mark, according to the applicant, arose from the designs, colours and words that made up the mark.

If you want to read the full article, click here.

This article first appeared in WTR Daily, part of World Trademark Review, in (August/2023). For further information, please go to www.worldtrademarkreview.com.

The Trademark Lawyer Magazine interviews our partner Maria Cecilia Romoleroux

DETAILS

DATE: 07-07-2023

PROFESSIONALS INVOLVED IN THE ARTICLE:

Maria Cecilia Romoleroux

The Trademark Lawyer Magazine interviews our partner Maria Cecilia Romoleroux in its section dedicated to women working in the Intellectual Property industry.

During the interview, Maria Cecilia talks about her experience, her achievements, the challenges she has faced during her professional career, as well as the changes she would like to see in the IP industry in the coming years.

An interview that, according to the publication, are inspirations, experiences and ideas for equality.

“A curious fact is that I didn’t want to be a lawyer, or at least it wasn’t in my plans. It all started when my aunt told me the news that I had been enrolled at the Law School. At first, I was shocked, as I had not planned it, but as time went by, I fell in love with my career and studied it with enthusiasm until the end. At that time, intellectual property was not very developed in Ecuador and it was not a main focus at the university”, explains Maria Cecilia recalling her beginnings.

Throughout my career, she says, “i have faced many challenges, most of them related to being a woman in a historically male-dominated environment. Still today, most law firms have a significant number of female associates or employees, but when we look at the partners, the number of women is low or none”.

“This reality is consequence of a sad but true fact: being a woman and a lawyer means that, by default, our path will always have more obstacles than our male colleagues. In my experience, the only way to deal with these and any other obstacles is to move forward. If I had spent time lamenting over all obstacles or taking criticism personally, I would never have achieved a quarter of what I have achieved in my professional and personal career”.

If you want to read the complete article, click here.

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