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ARMY RELATIONSHIPS WITH PRIVATE ORGANIZATIONS (AKA: NON PDF

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Preview ARMY RELATIONSHIPS WITH PRIVATE ORGANIZATIONS (AKA: NON

Question Q218 National Group: AIPPI Malaysian Group Title: The requirement of genuine use of trademarks for maintaining protection Contributors: Teh Hong Koon Representative within Working Committee: - 1. Is genuine use a requirement for maintaining protection? What is the purpose of requiring genuine use? Is it to keep the register uncluttered and to thereby allow for new proprietors to make use of a “limited” supply of possible marks? Is the purpose of requiring genuine use to protect consumers from confusion as to the source of origin of the goods or services? Or are there multiple purposes? In Malaysia, a registered proprietor is not required to file any evidence to prove that the mark is in use in order to renew and maintain his registration. However, “non-use in good faith” of the mark is a ground for revocation. Section 46 of our Trade Marks Act 1976 (TMA) provides: 1) Subject to this section and to section 57, the Court may, on application by a person aggrieved, order a trade mark to be removed from the Register in respect of any of the goods or services in respect of which it is registered on the ground - (a) that the trade mark was registered without an intention in good faith, on the part of the applicant for registration or, if it was registered under subsection (1) of section 26, on the part of the body corporate or registered user concerned, to use the trade mark in relation to those goods or services and that there has in fact been no use in good faith of the trade mark in relation to those goods or services by the registered proprietor or registered user of the trade mark for the time being up to the date one month before the date of the application; or (b) that up to one month before the date of the application a continuous period of not less than three years had elapsed during which the trade mark was a registered trade mark and during which there was no use in good faith of the trade mark in relation to those goods or services by the registered proprietor or registered user of the trade mark for the time being. Further definition of use is provided for under Section 3 TMA as follows: 1 (a) references to the use of a mark shall be construed as references to the use of a printed or other visual representation of the mark; (b) references to the use of a mark in relation to goods shall be construed as references to the use thereof upon, or in physical or other relation to, goods; and (c) references to the use of a mark in relation to services shall be construed as references to the use thereof as a statement or as part of a statement about the availability or performance of services Although not expressly stated in the legislation, we believe the reason for allowing revocation on ground of non-use is to keep the Register uncluttered and to thereby allow for new proprietors to make use of a limited supply of possible marks. 2. What constitutes genuine use of a trademark? The Malaysian High Court in the case of Jost Cranes GmpH & Co KG v Jost Cranes Sdn Bhd (2010) 4 MLJ 19, adopted the principles of a foreign case of Daimler AG v Sany Group Co Ltd [2009] All ER 37 in respect of the meaning of genuine use: a) Genuine use is a qualitative and not a quantitative criterion; b) The use has to be consistent with the essential function of the trademark, which is to guarantee the identity of the origin of the goods or services to the customer or end users. c) © The use has to be on the market by the proprietor or an authorized third party and not just internal use by the undertaking concerned. d) The use has to be to maintain or create a share in the market for the goods or services protected by the mark. e) The court has to take into consideration all the facts and circumstances relevant to establishing whether the commercial exploitation of the mark has been real, and in particular, whether such use would be viewed as warranted in the trade sector concerned to maintain or create a share in the market for the relevant goods or services protected by the mark; and finally, f) The nature of the goods in issue such as the characteristics of the market concerned and the scale and frequency of the use of the mark have to be taken into account. 3. Is use “as a mark” required for maintaining protection? Is use as a business name, use in advertising or use on the Internet sufficient? Is use of a mark in merchandising genuine use for the original products? (For instance, is use of the movie title Startrek, registered for clothing and used on the front of a T-Shirt, genuine use of the mark for clothing?) The Malaysian High Court case of Godrej Sara Lee Ltd v. Siah Teong Teck and Anor. (No 2) 2008 7 CLJ 24 held that for ‘use’ to be constituted under Section 46, the use must be in relation to the goods claimed in the registration. On the point of use, the court held that merely seeking and obtaining approval did not amount to actual use in the course of trade. The court further held that for actual use to arise, there must be use of the mark on or in relation to goods and this would include affixing the mark to the goods or in an advertisement, circular or a catalogue. The Godrej case illustrates that advertisements, catalogues or circulars establishing such linkage would constitute actual use. 2 In relation to your question, if the mark “Startrek” is registered for “clothing” and the mark is used on the front of a T-shirt, it would constitute genuine use. 4. What degree of use is required for maintaining protection? Is token use sufficient? Is minimal use sufficient? National legislation does not provide for the extent of use required in assessing prior use and distinctiveness nor the extent required to exclude circumstances of ‘non use’. Case law with reference to foreign authorities recognize ‘small use’ to suffice in determining prior use when determining whether a mark is to be expunged. Such contextual quantification is however not found with respect to circumstances that would negate ‘non use’. The court in the Jost Cranes case recognize that case laws have shown that courts are prepared to infer first prior user of a particular trademark in respect of goods applied for from small amounts of use and testing, and to this extent, foreign authorities were referred. In the Australian case of Moorgate Tobacco Co Ltd v Philip Morris Ltd (1984) 156 CLR 414, it is held that there is no need to establish local reputation by the foreign owner. A prior transaction would be viewed in a favorable manner if it could be considered to fall within the definition of use as a trademark. In Thunderbird Products Corporation v Thunderbird Marine Products Pty Ltd [1974] 131 CLR 592, it is held that the existence of correspondence, the sending of brochures and the forwarding of a loosely assembled boat for mould-making by the originator of the product, an American corporation, to the Australian company constituted use of the mark by the American corporation. This is despite the fact that the prototype is not meant for actual sale, but is to be used by the licensee to make boats from the mould which would be subsequently sold. The Malaysian case of Lim Yew Sing also by referring to an Australian case noted that ‘very small amount of use’ would suffice in determining prior use and distinctiveness of the mark to the goods in the minds of consumers. Here, the Malaysian case as well as the Australian case dealt with expungement action due to use of foreign registered mark by the applicant. Whilst case law referred to ‘small use’ when determining prior use of marks, no reference of the extent of use required to prevent cancelation of a mark is expressed. 5. Is use in the course of trade required? Does use by non profit-organizations constitute genuine use? Does use in the form of test marketing or use in clinical trials constitute genuine use? Does use in form of free promotional goods which are given to purchasers of other goods of the trademark owner constitute genuine use? Does internal use constitute genuine use? Section 3 of the TMA defines trade mark as: "trade mark" means, except in relation to Part XI, a mark used or proposed to be used in relation to goods or services for the purpose of indicating or so as to indicate a connection in the course of trade between the goods or services and a person having the right either as proprietor or as registered user to use the mark whether with or without an indication of the identity of that person, and means, in relation to Part XI, a mark registrable or registered under the said Part XI; Thus, ‘use’ of a mark has to be in the course of trade. In the Godrej case, a mere application for approval and obtaining the same was rendered inadequate and did not amount to use in the 3 course of trade. While the mandate for use in the course of trade was not spelt out in this case, such a requirement may be inferred from the judgment. The case of Lim Yew Sing further holds that for the purpose of establishing distinctiveness one must look to the use of the mark in the course of trade. In determining what constitutes use in the course of trade, the case of Lam Soon Edible Sdn. Bhd. Hup Seng Perusahaan Sdn Bhd. (2010) 5 CLJ 975 is referred. This case concerned the Applicant’s action to remove/ expunge the respondents ‘NATUREL’ Mark for non use with respect of goods (range of healthy biscuits). Although the applicant failed in adducing evidence of non use which thus negates the necessity of the respondent proving use, the courts nevertheless took the liberty in determining the extent of use required as proof. In doing so, the courts referred to HERMES Trade Marks [1982] RPC 425 at p. 426, where it was held that: (ii) The phrase "in the course of trade" is wide enough to cover the steps necessary for the production of goods as well as their actual placing on the market. . .” “ . .If the registered proprietor should commence a series of advertisements featuring his mark as part of an introductory campaign, prior to putting his goods on the market under the mark, but before they were actually on the market, in my judgment such use would clearly be use of the mark in the course of trade, not upon the goods or in physical relation thereto, but it would be in other relation thereto, the point being that it would be use in the course of trade in those goods, albeit in advertisement. Reference was also made to the Federal Court of Australia decision in New South Wales Dairy Corporation v. Murray Goulburn Co-Operative Company Ltd and Another [1988-1989] 14 IPR 26. In this case, in determining the issue of expungement for non use, Gummow, J referred to the definition of "trade mark" and "use of a mark" in s. 6(1) and 6(2) of the Australian Trade Marks Act 1955 respectively (in pari materia with s. 3(1) and 3(2) of our Act), and said at p. 44: “The use must be as a "trade mark", given the definition of that term in s. 6(1) as a meaning, relevantly, a mark used or proposed to be used in relation to goods for the purpose of indicating or so as to indicate a connection in the course of trade between the goods and the proprietor, whether with or without an indication of the identity of that person. The expression "use" in s. 23 (in pari materia with Section 46 of our Act) must be understood in that context, but its denotation is not limited by any concept of the physical use of a tangible object: Estex Clothing Manufacturers Pty Ltd v. Ellis & Goldstein Ltd, supra, at 271 per Barwick CJ, McTiernan, Taylor, Owen JJ. The phrase "in the course of trade" is wide enough to cover steps necessary for the production of the goods, as well as the actual placement of the goods on the market: "Hermes" Trade Mark [1982] RPC 425 at 432.” The court in Lam Soon arrived at their decision by applying the principles in Hermes and the New South Wales case, holding that the respondents had established sufficient use of the Mark. It is worth noting that the foreign cases referred to determined use of a Mark in relation to goods which took place “ in the course of trade’. It also ought to be observed that the judge in the New South Wales case stated that the use must be as a trade mark. With regard to internal use, by virtue of the Jost Crane (q2) reference to what constitutes genuine use, it would be unlikely for such use to constitute use in the course of trade. 4 6. What is the required geographic extent of use? Is use only in one part (or a state in the case of confederation) of the country sufficient? Is use of the CTM in only one EU member state sufficient? Is use only in relation to goods to be exported sufficient? Is use in duty free zones considered to be genuine use? The requirement of use within a geographical scope is not expressed in national legislation. Under the TMA, a registered proprietor acquires exclusive rights to use the mark in Malaysia. However, such exclusivity of use may be subject to conditions, limitations, modifications or amendments which as imposed by the Registrar. The limitations which may be imposed include that of geographical territory. These are provided for by the TMA under Sections 35, 25 and 3 respectively. The exclusivity of use of the registered mark may be found under section 35(1) of the TMA which provides: Subject to the provisions of this Act, the registration of a person as registered proprietor of a trade mark (other than a certification trade mark) in respect of any goods or services shall, if valid, give or be deemed to have been given to that person the exclusive right to the use of the trade mark in relation to those goods or services subject to any conditions, amendments, modifications or limitations entered in the Register. The Registrar’s right to impose such limitations, conditions, modifications and amendments is provided for by virtue of section 25(3) of the TMA which goes to say: (3) Subject to the provisions of this Act, the Registrar may refuse the application or may accept it absolutely or subject to such conditions, amendments, modifications or limitations, if any, as he may think right to impose. ‘Limitation’ on the other hand has been defined under Section 3(1) to mean limitations of the right to the exclusive use of a trade mark given by the registration of the trade mark including limitations of that right as to - … (b) use within a territorial area within Malaysia; or (c) use in relation to goods to be exported to a market outside Malaysia or use in relation to services to be provided in a place outside Malaysia; Use of trade mark for export trade is permitted under Malaysian law by virtue of Section 71 of the TMA which states: The application in Malaysia of a trade mark to goods to be exported from Malaysia and any other act done in Malaysia in relation to the goods which if done in relation to goods to be sold or otherwise traded in in Malaysia would constitute use of a trade mark in Malaysia shall for the purpose of this Act be deemed to constitute use of the trade mark in relation to those goods. However, such use is also subject to limitations as defined above where imposed by the Registrar under Section 25. 7. Does genuine use have to take place in the exact form in which the mark is registered? Is use in a different form sufficient? What difference is considered permissible? What if (distinctive) 5 elements are added or omitted? Is use of a mark in black and white instead of colour sufficient (in case of marks with a colour claim) and vice versa? Under our laws, the use a mark which does not substantially affect the identity of the registered trade mark is considered as use of the registered trade mark. The permissible differences between the mark and the registered trade mark are judged based on their visual, phonetic and conceptual differences guided by the stated principle. In Malaysia, marks with colour claim may be used in all colours where such registration is free from limitations. Such is provided for under Section 13(2) of the TMA. Section 13 of the TMA on colour of trade mark provides: (1) A trade mark may be limited in whole or in part to one or more specified colours and, in any such case, the fact that the trade mark is so limited shall be taken into consideration for the purpose of determining whether the trade mark is distinctive. (2) Where a trade mark is registered without limitations as to colour, it shall be deemed to be registered for all colours 8. Does the mark have to be used in respect all of the registered goods and services? What if mark is used in respect of ingredients and spare parts or after sales services and repairs, rather than registered goods and services? What is the effect of use which is limited to a part of the registered goods or services? What is the effect of use limited to specific goods or services? Whilst the TMA does not expressly provide for the requirement to use the trade mark with respect to all goods/ service registered, case law would allow for the cancelation corresponding to the extent of non use under section 46 of the TMA. Such was the view expressed in the Federal Court case of McLaren International Ltd. V Lim Yat Meen (2009) 4 CLJ 749. Although this case was dismissed for lack of locus standi, the FC held that should locus have been present, the categories of goods in which the Mark was not used would be removed from the Register. An important observation to this extent is that non use of mark with respect to part of the goods registered for would only be subjected to removal where an application is made by a party with adequate standing. Further, our practice manual provides that if a mark has been used in good faith on goods of the same description as the non-used goods, the Registrar is given a discretion not to strike out the non-used goods so long as the used goods are “goods in respect of which the trademark is registered”. 9. Evidence of use: How does one prove genuine use? Is advertising material sufficient? Are sales figures sufficient? Is survey evidence required? Are the acceptable specimens for proving genuine use different for goods and services? Who has burden of proof for genuine use? Section 64 of the TMA provides: 6 (1) In all proceedings before the Registrar under this Act, the evidence shall be given by statutory declaration in the absence of directions to the contrary, but, in any case in which he thinks fit, the Registrar may take evidence viva voce in lieu of or in addition to evidence by declaration. (2) Any such statutory declaration may, in the case of appeal, be used before the Court in lieu of evidence by affidavit, but if so used, shall have all the incidents and consequences of evidence by affidavit. (3) In any action or proceedings relating to trade mark or trade name, the Registrar or the Court, as the case may be, shall admit evidence of the usages of the trade concerned or evidence of business usages in the provision of the services in question, and evidence of any relevant trade marks or trade name or business name or get-up legitimately used by other persons The TMA as well as the Trade Marks Regulations 1999 provide that the mode of adducing evidence is by way of Statutory Declaration. Nevertheless, the form of evidence is not specified. Our practice manual lists several forms of evidence that may be furnished in seeking to establish use. These include; • the precise list of goods on which the mark has been used; • the turnover or volume of sales, separately for each of the last five years at least, prior to the date of the application, (or shorter period where less than five years use is available); • the amount spent on advertising and making the mark known, separately for each of the years at (b) above; • exhibits showing actual use of the mark in relation to the goods, including examples of the goods themselves bearing the mark, and ancillary material such as labels, point-of- sale material, and copies of advertisements in which the mark appears; • a list of the towns etc. in which the mark has been used in Malaysia. • some history of the mark i.e. when it was adopted and first used in Malaysia In general, form of evidence that have been admitted in court and accepted thereof include sales revenue (Lim Yew Sing); advertisements, product research and circulars (Lam Soon Edible Sdn. Bhd), and the history of the trading entity and the mark itself (LB Confectionary; Lim Yew Sing) Surveys may be submitted. However such evidence have to satisfy a minimum standard to ensure admissibility. These minimum standards were discussed in the Lim Yew Sing case in determining market confusion and subsequently followed in the Lam Soon Edible on the issue of non use case. In essence, the Mahadev Shankar JC decision in Lim Yew Sing held that for survey evidence to have validity - must meet certain minimum criteria which have been spelt out in Imperial Group PLC & Another v. Philip Morris Limited & Another [1984] RFC 293. which are as follows: (a) the interviewees must be selected so as to represent a relevant cross-section of the public; (b) The size must be statistically significant; (c) It must be conducted fairly; (d) All the surveys carried out must be disclosed including the number carried out, how they were conducted, and the total number of persons involved; (e) The totality of the answers given must be disclosed and made available to the defendant; 7 (f) The questions must not be leading nor should they lead the person answering into a field of speculation he would never have embarked upon had the question not been put; (g) The exact answers and not some abbreviated from must be recorded; (h) The instructions to the interviewers as to how to carry out the survey must be disclosed; and (i) Where the answers are coded for computer input, the coding instructions must be disclosed. In furnishing proof of non use, the onus lies on the application, i.e., the party who seeks to cancel a registration to establish a prima facie case of such non use. Only then would the burden shift onto the respondent in establishing proof of use. This principle is established by virtue of cases such as NV Sumatra Tobacco Trading Co. v. Nanyang Brothers Tobacco Co. Ltd. [2001] 1 SLR 197, E-Toyo Global Stationary Sdn Bhd v. Toyo Ink Sdn Bhd & Anor [2004] 7 CLJ 368, and reaffirmed in Lam Soon Edible Sdn. Bhd. 10. If the trademark owner has a proper reason for not having put his mark to genuine use, will he be excused? What constitutes a proper reason for non-use? If the nonuse is excusable, is there a maximum time limit? If so, is the time limit dependant upon the nature of the excuse? The TMA provides an exception to the non use provisions and this is found in Section 46(4) which states : An Applicant is not entitled to rely for the purposes of paragraph (b) of subsection (1) or for the purposes of subsection (3) (or 3A) on any failure to use a trade mark if failure is shown to have been due to special circumstances in the trade and not to an intention not to use or to abandon the trade mark in relation to the goods to which the application relates. Based on this subsection, the registered proprietor would have to establish the presence of ‘special circumstances’ in the trade’ as an excuse of non use. In determining what constitutes special circumstances, the case of Godrej (supra) is once again referred. In Godrej, the courts in acknowledging the absence of local precedents on the matter made references to English case law which have interpreted a pari materia provision under s. 26 of the UK Trade Marks Act 1938 In the decision in BULOVA Trade Mark [1967] RPC 29, Ungoed Thomas J held relying on the decision of Evershed LJ in the case of Aktiebolaget manus v. Fullwood & Blkand Ltd. [1949] 66 RPC 71 as follows: It seems to me that both what Evershed LJ refers to as "the ordinary and common-sense meaning of the words" of the section and his own observations lay down that, if "peculiar or abnormal", "external" circumstances exist due to which there is non-use, then the requirement of the section is satisfied. It appears that it is enough that there are special circumstances in the sense circumstances making any ordinary usage of international trade impracticable, if that is the reason for the trader's non-use of a mark. The Court in Godrej identified and applied the two requirements in establishing special circumstances. These conditions are: 8 (i) the special circumstances must be peculiar or abnormal and must be external in nature: and (ii) the non-use must be as a result of those circumstances. The respondents in Godrej claimed that the non use was a result of the presence of ‘conflict of interest’ arising from contractual agreements engaged in with other parties. The court thus held that these contractual arrangements were neither peculiar to the trade nor external in nature unlike the circumstance in the Bulova case where Government quota was imposed. As such, it was held that the circumstances arose out of exercise of the respondent’s commercial choice and thus both conditions are not satisfied. 11. Within which period of time does use have to take place? Based on the provisions under section 46 of the TMA, no time is specified for the purpose of use. However, in preventing the potential loss of rights post registration, use ought to have commenced at least prior to the lapse of 3 years from the date of registration. This is so because an ‘aggrieved party’ may make an application to remove such registration and would succeed in the same having proven non use for the period of 3 years from one month prior to such applications. 12. Does use of the mark by licensee or distributor constitute genuine use for maintaining protection? If so, does the license have to be registered? If so, are there any requirements to be met by the trademark holder (the licensor) to maintain the trademark (e.g. quality controls, inspections or retaining a contractual right to control or inspect)? Section 48 of the TMA on Registered Users stipulates: (1) Subject to the provisions of this section, where the registered proprietor of a trade mark grants, by lawful contract, a right to any person to use the trade mark for all or any of the goods or services in respect of which the trade mark is registered, that person may be entered on the Register as a registered user of the said trade mark whether with or without any conditions or restrictions, provided that it shall be a condition of any such registration that the registered proprietor shall retain and exercise control over the use of the trade mark and over the quality of the goods or services provided by the registered user in connection with that trade mark. (5) Where a person has been registered as a registered user of a trade mark, the use of that trade mark by the registered user within the limits of his registration shall be deemed to be use by the registered proprietor of the trade mark to the same extent as the use of the trade mark by the registered user and shall be deemed not to be use by any other person. These provisions provide by law, for a class called ‘registered users’ to use the registered proprietor’s mark where such use by the former is deemed use by the latter. An element of ‘control’ is however required on the part of the registered proprietor. Registered users are those who have by lawful contract obtained the right to use the registered proprietors’ trade mark where such contractual relationship is registered. Thus, registered licencees would have the right to use the mark and such use would be deemed to be use by the proprietor. Malaysian case law such as LB Confectionary Sdn. Bhd. v. Qaf Ltd. : Perbadanan Harta Intelek Malaysia(interested Party) and Another (2008) 10 CLJ 264, and E-Toyo Global Stationery Sdn. Bhd. v. Toyo Ink Sdn. Bhd. & Anor [2004] 7 CLJ 368, and Lam Soon (M) Bhd v. Forward Supreme Sdn Bhd & Ors [2001] 4 CLJ 673 are instances where use by registered licencee were 9 recognized as use by registered proprietors. These cases go further to hold that such use by registered users commences from the date the ‘registered user’/ licence agreement comes into force. Unregistered use of trade mark - With respect to the cancellation of a trade mark registration in Malaysia, the Trade Marks Act provides that such cancellation may arise where the registered trade mark is not used by the registered proprietor or the registered user. What thus comes into question is the possibility of deeming use by an unregistered licensee as use by the registered proprietor. As the statute is silent on this point, Malaysian case law is referred. In the High Corut case of LB Confectionary Sdn. Bhd vQaf ltd: Perbadanan Harta Intelek Malaysia& Another (2008) 10 CLJ, this particular issue was discussed by the courts although the case at hand involved ‘registered users’/ On the issue of use by non registered users to be deemed as use as proprietor and thus preclude cancellation for non use, the court relied on the decision of the Court of Appeal case of McLaren International Ltd v. Lim Yat Meen (2008) 1 CLJ 613 In the McLaren case, the respondent in that case contracted manufacturing rights of its mark to two other separate entities. These two were not registered as registered user of the mark. In other words, the respondent had assigned the right to use the trade mark to two other entities without registering them as users. The Court of Appeal nevertheless held that failure to enter the aforesaid two entities as registered users would not avoid the lawful contract granted to them by the respondent in that case to use the trade mark. Pertinently, evidence of the contractual activities amounted to use and attributed to the respondent in that case. The Court of Appeal came to this decision by comparing Section 48 of the TMA (dealing with registered users) with s. 28 of the English Trade Marks Act 1938, and held that while the provisions are not exact in its construction, the spirit and contents of the two provisions are similar by analogy in relation to registration of a user. They particularly note that the usage of the word 'may' as used in the phrase 'may be entered on the register as a registered user' in s. 48 of TMA is permissive rather than mandatory By virtue of the Court of Appeal decision in McLaren and the restatement of the position in LB Confectionary, it may be thus submitted that use by an unregistered user who obtained a legal contract of license may be attributed to the trade mark proprietor and thus exclude cancellation. McLaren in the Federal Court: In McLaren International Ltd. V. Lim Yat Meen (2009) 4 CLJ 749, The Federal Court commented: The second facet concerns the fact that during the relevant three years the respondent's trade mark was used in relation to executive men's shoes, which constitute some of the goods in respect of which the trade mark is registered. So that the ground for removal of the trade mark under s. 46(1)(b) in respect of those goods may be avoided or prevented from arising, the use must be use by the respondent himself as the registered proprietor or by the registered user of the trade mark, besides the use having to be in good faith. A registered user is a person registered as such under s. 48. Stonefly and United Summary were never registered under s. 48 as registered users of the respondent's trade mark. Although, as the Court of Appeal said, s. 48 did not make it mandatory for them to be registered as such, their not being so registered has the 10

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ARMY RELATIONSHIPS WITH PRIVATE ORGANIZATIONS (AKA: NON-FEDERAL ENTITIES) by Mr. Michael J. Wentink Army Standards of Conduct Office Office of The Judge Advocate General
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