Wednesday, October 28, 2009

Professor David Llewlyn Explained All IPRs in One Hour

IP Dragon was attending yesterday evening the very inspiring lecture of Professor David Llewelyn at the University of Hong Kong, about the importance of intellectual property rights for not only experts, but everybody.

Professor Llewelyn made clear that the lecture was a public lecture meant for non-experts; the normal consumers; and put experts and expertise in perspective. He quoted Lord Denning that in the dictionary for example the word barrister comes directly after bankrupt and just before bastard. "IP needs to be understood, especially in this part of the world [referrring to Asia] by many constituencies that don't relate to each other. Patent people can only think about patents. Trademark people about trademarks etc." Professor Llewelyn was determined to speak only about the good things of intellectual property rights, so not about counterfeiting, pirating and the pressure of the developed countries on local developing governement officials.

Professor Llewelyn was referring to patent in all its meanings. The sentence: "It is patent" for example means "It's available." He was recalling Huawei who overtook the number one position of the company with the most patents from Panasonic. Professor Llewelyn was going to say only good things about IPRs, but as a good friend of IPRs, he critisised IPRs starting with patents: most were vanity publishing.

Then he was filleting the quality of some Hong Kong patents, and after a pit stop to the "stepsister of patents': trade secrets, he was off to trademarks. Professor Llewelyn told about the dispute between Jiangyou in Sichuan province and Anlu in Hubei province, who both claim their city as the hometown of the famous poet from the Tang dynasty called Li Bai.Jiangyou was not amused when they became familiar with a commercial on China Central Television (CCTV) that identified Anlu as the hometown of Li Bai. According to the South China Morning Post, Xinhua reported that the Jiangyou had registered the trademark "the Hometown of Li Bai, the City of Chinese Poems" in 2003. Therefore Anlu's commercial allegedly violated the trademark. Never mind that Jiangyou nor Anlu was the birthplace of the ancient poet, which was small town in what now is Kyrgyzstan, as the South China Morning Post mentioned.

Professor Llewelyn urged companies to think ahead: Chinese computer maker wanted to expand abroad, but they forsaw problems with the trademark legend that was already trademarked in many countries. Therefore they decided to change their name into Lenovo, which is distinctive enough and not descriptive or laudatory. Professor Llewelyn pointed out the possibility that trademarks could be used in an unfair manner, to bully other companies into submissiveness. As an example he gave KFC who sued an neighbourhood restaurant for infringement of the use of the trademarked term 'family feast'. He draw the history of Hong Kong artist Michael Lau and his relation to trademarks/bootlegs.

Genericide was discusses as well. Escalator, tabloid were generic names, but not roller blades.

Then the subject changed to geographical indications. The danger always lurks that two states, such as Indonesia and Malaysia start fighting over a term for food: such as who owns Nasi Lemak.

The territorial nature of intellectual property rights were discussed.

Copyrights you obtain for nothing; but the flipside is that they only forbid the right to copy; and another challenge is the digital era, as you can read in "Free", the book by Chris Anderson. Professor Llewelyn referred to China's threats to sue over fake terracotta warriors, as a subject that is outside the scope of copyrights. Professor Llewelyn compared it with the Egyptians that want to copyright the pyramids.
Normal copyrights are the life of the creator plus 50 years (China, which is TRIPs standard) or 70 years (many countries). In the UK there is special legislation for the play 'Peter Pan, or the boy who whould not grow up' to give it perpetual copyright in order to finance the Great Ormond Street Hospital.

Among intellectual property rights are strange creatures, such as database rights.
And many new players such as UNESCO are getting in to the act as well to protect rather exotic new intellectual property rights.

Intellectual property rights are liabilities, unless you do something with them. Commercialisation is getting more popular.

There are only five countries in the world with a net balance of payment: US, UK, Japan, Sweden and France. China has taken this well into account and makes sure that it is self innovating in order to avoid to pay too much royalities.

When one analyses intellectual property rights one can do it from many perspectives. An academic (access to information) has another perspective than an author of a book (control of information). Professor Llewelyn told about a student in Beijing who asked him to sign a copy of his book that was "better bound than [his publisher] Sweet & Maxwell."

Anti-competition law is becoming more important in intellectual property right law. Professor Llewelyn advocates a balance between extremes.

A development we must take an eye on is according to Llewelyn developing countries, such as India, that demand green technology of the developed world.

Hong Kong lawyers were always more interested in transactions of IPRs, registering etc. than in advising them about how to best exploit their IPRs.

In 60 minutes Professor Llewelyn covered a lot of ground. Ron Yu asked him whether IPRs are not getting too complicated for the average consumer. Professor Llewelyn answered: "Yes and also too complicated for the experts."

IP Dragon asked him about his take on the new international IPR forum ACTA, and whether it would be a threat to forums such as WIPO and WTO's TRIPs? Professor Llewelyn answered that he does not like the new forum, it will be more complicated.

So there will be a great need for people who can explain and illuminate these complicated issues in an inspiring way in the future, just like Professor Llewelyn.
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Tuesday, October 27, 2009

"Games on iPhone Are 50-90 Percent Pirated"

Simon Carless of Gamasutra wrote that Vice-President Alan Yu of game developer ngmoco:) said at the GDC in Shanghai that "iPhone game piracy is a big issue, with 50%-90% piracy estimated in the first week of release on Ngmoco games." 50 to 90 percent of the potential income wiped out, thrashed, removed from the balance sheet. This gives the name of the upcoming ngmoco game "Eliminate" a whole new meaning. Read Mr Carless' article here.
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Professor Llewelyn Asks Rhetorical Question About IPRs: "Too Important to Leave to the Lawyers?"

Tonight, IP Dragon is looking forward to attend the lecture of Professor David Llewelyn about the relevancy of Intellectual Property Rights for everybody.

"As Premier Wen Jiabao has been saying since 2004, world competition in the 21st century will revolve around competition for intellectual property rights (IPRs). But what are these rights, what can you do with them and how can we foster the innovation and creativity they protect?"

Professor David Llewelyn is Honorary Professor IPR Law at the University of Hong Kong and King’s College in London. He is also Deputy Chairman and External Director of the IP Academy in Singapore, and Partner and Head of IP at international law firm White & Case in its London office, and Chairman of IPR-X (Asia Pacific) Pte Ltd, a Singapore-based IP strategy and investment company. Professor Llewelyn is one of the world’s leading experts on the protection and commercialisation of IPRs.

Professor Llewelyn is well known for his co-authorship of the book: Cornish, William & David Llewelyn, 'Intellectual Property: Patents, Copyrights, Trademarks and Allied Rights'.

See the blog 'Professor David Llewelyn Explains All IPRs in One Hour' about his lecture here.
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Monday, October 26, 2009

Chinese Counterfeit ICs Sold To US Navy. How To Identify Them?

With the Somalian pirates hijacking ships (a Chinese container carrier fell into their hands), key words such as "piracy" and "pirates" seem to be reclaimed by the old fashioned thugs. Read here. However, the newer version of the pirates: trademark counterfeiters and copyright pirates can have just as deadly an effect. October 9, 2009, the US Department of Justice released a press statement that three California family members were indicted in connection with the sales of counterfeit high tech parts (read Integrated Circuits (ICs)) to the US navy military. The counterfeit ICs were imported from China and sold via the internet. Read the press release here.

What to do when even your navy is not safe against counterfeit ICs? Well first you have to be able to identify what is counterfeit and what is not. The Semiconductor Industry Associtation Anti-Counterfeiting Task Force (SEMI) just announced that it developed new standards to facilitate the identification of counterfeit ICs. Read more about it on Electronics News here.
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Friday, October 23, 2009

ASEAN-China: IPR Cooperation and Standard MOUs

The Association of East Asian Nations (ASEAN) which includes Thailand, Indonesia, Philippines, Singapore, Malaysia, Brunei Darussalem, Cambodia, Myanmar, Lao PDR and Viet Nam will meet in Hua Hin, Thailand, from October 23 to 25.

The ASEAN, ASEAN + 1 (ASEAN plus China), ASEAN + 3 (ASEAN plus China, South Korea and Japan) and East Asian Summit (ASEAN plus India, Australia and New Zealand) are held in Hua Hin, Thailand from Oct. 23-25.
According to Xinhua, documents to be signed by ministers include:
  • Memorandum of Understanding between ASEAN and China on Cooperation in the Field of Intellectual Property;
  • Memorandum of Understanding between ASEAN and China on Strengthening Cooperation in the Field of Standards, Technical Regulations and Conformity Assessment.

Read Deng Shasha's article here.

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Russia to China: Kalashnikov's Copyright Should Be Protected

Topix reports that Russia and China are trying to reach an agreement on copyright protection of the Kalashnikov, the world famous assault rifle. Read here. More about the most famous Kalashnikov the AK-47 here.
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Massive Chinese Copyright Trade at Frankfurt Book Fair

"Die Chinesen sind da," ("The Chinese are there", in German) was the motto of the biggest book fair in the world: the Frankfurter Buchmesse (October 6-10, 2009). China was Guest of Honour and the Chinese book publishers did show themselves prominently: "Chinese publishers have exported 1,310 copyright items, and imported 882 titles to foreign counterparts."

Read the Xinhua article, via China.org.cn, here and see the Frankfurter Buchmesse's Guest of Honour site here.
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IPR/Espionage Ping-Pong Case: Fiat Sues Great Wall, Great Wall Sues Fiat

Fiat sued Great Wall, because it alleges that the Great Wall Peri infringes the intellectal property rights of the FIAT Panda. After this Great Wall sued FIAT at the Shijiazhuang People's Court, based on "evidence" provided by FIAT to the court that they made photo's of production facilities.

Fiat suspected Great Wall to have infringed its Panda's IPRs (ping), so it made photo's of Great Wall Peri's production facilities, so Great Wall sued Fiat for espionage (pong). Is this how it went? Is this how it continues? Ping-pong, ping-pong.

Read the China Briefing article here, or at the Financial Times, via the site of Autonews Gasgoo, here.

Comment of the week:
IP Dragon's friend Richard Osinga (writer and digital entrepreneur) wrote: "I guess the Chinese don't like it if an Italian car manufacturer calls its model Panda."
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Thursday, October 22, 2009

USCC 2008 Report to Congress: From Visible IPR Infringements To Undectable Cyber Espionage

The US-China Economic and Security Review Commission came up with their 2008 Report to Congress. The conclusion includes:
  • "China continues to violate its WTO commitments to avoid trade distorting measures. Among the trade-related situations in China that are counter to those commitments are restricted market access for foreign financial news services, books, films and other media; weak intellectual property protection; sustained use of domestic and export subsidies; lack of transparency in regulatory processes; continued emphasis on implementing policies that protect and promote domestic industries to the disadvantage of foreign competition; import barriers and export preferences; and limitations on foreign investment or ownership in certain sectors of the economy."
  • "China has an active cyber espionage program. Since China’s current cyber operations capability is so advanced, it can engage informs of cyber warfare so sophisticated that the United States maybe unable to counteract or even detect the efforts."

So it's all about intellectual property rights violated, noticed or unnoticed. Read the 405 page report here.

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China Written Works Copyright Society Objects Google Settlement

The China Written Works Copyright Society, representing 570 Chinese authors, objects to be included in the Google Class Action Settlement, between Google and US authors and publishers. They claim that the copyright of the Chinese authors is infringed. Read Elaine Kurtenbach's article with Bonnie Cao and Ji Chen, for Associated Press here.
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20th Joint Commission on Commerce and Trade Between China and US

China and the US will hold their 20th Joint Commission on Commerce and Trade (JCCT) in Hangzhou (Zhejiang province) on October 29th 2009. The first JCCT was established in 1983 as a forum for the two countries to discuss trade and intellectual property matters. It will be the first JCCT meeting under the Obama administration. Li Xianzhi wrote for Xinhua that the meeting will be co-chaired by Chinese Vice Premier Wang Qishan, U.S. Secretary of Commerce Gary Locke and U.S. Trade Representative Ron Kirk. Read more here.
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Wednesday, October 21, 2009

Economic Espionage Case Against Suspects Allegedly Sponsored By China

The time that the Russians were the only bad guys in James Bond movies or John le Carré books is over. Jaikumar Vijayan has written an interesting article for Computerworld called 'Trial set to begin in economic espionage case involving China'. The suspects that allegedly stole secrets from Netlogic Microsystems are prosecuted under the Economic Espionage Act. Read here.

Read Dan Levine's article 'Defense blames Chinese Espionage Case on Neglected Wive' for Law.com here.
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IPR Challenges in Geely-Ford Talks About Volvo

Keith Naughton and Cathy Chan wrote about the effort of Geely to buy Volvo of Ford jeopardized because of intellectual property rights related challenges, read the Reuters article here.

The struggle about IPRs comes in the wake of "the FBI’s Oct. 14 arrest of former Ford engineer Xiang Dong Yu, 47, who was charged with stealing trade secrets from Ford in an effort to get a job with a Chinese car company."

Xiang Dong Yu, worked at Ford from 1997 to 2007, according to the U.S. Justice Department and "is is charged with stealing more than 4,000 Ford documents and using them to seek employment with Shanghai Automotive Industry Corp., according to the U.S. indictment. He eventually was hired by Beijing Automotive Corp. in China, according to the indictment."

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Tuesday, October 20, 2009

Professor Peter K. Yu General Editor of WIPO Journal: Analysis and Debate of Intellectual Property Issues

There is a new peer reviewed IPR journal: WIPO Journal, a platform for the global IP debate. The prolific Professor Peter K. Yu, will be its general editor and specialist for China and the United States. I am looking forward to it very much. Read more about it here.
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Monday, October 19, 2009

Gartner Predicts 2012 Software Piracy in China Will Fall To 50 Percent

Kelvin Soh and Melanie Lee report that "Gartner estimated that software piracy rates in mainland China would fall as low as 50 percent by 2012, putting it almost on a par with rates in developed Asian markets like Hong Kong. See there Reuters article, via the MSNBC site here.

The Business Software Alliance claims the following economic benefits of lowering software piracy in China from 82 percent in 2008 to 72 percent in 2011, see here.
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Saturday, October 17, 2009

Revolutionary Lessons For China From Michael Carrier's Book 'Innovation for the 21st Century'

'Innovation for the 21st Century, Harnessing the Power of Intellectual Property and Antitrust Law' by Michael A. Carrier. Oxford University Press.
Professor Michael Carrier of Rutgers University School of Law, wrote an excellent book about intellectual property rights (IPR) law and antitrust law, the intersection between the two disciplines and how both systems can be improved. IPR and antitrust law have the same goal, but use opposite methods: where IPR law grants, protects and enforces monopolies that give positive incentives to innovation, antitrust law is trying to avoid and combat monopolies that give negative incentives to innovation. Not only does Mr Carrier explains in a very clear language with a lot of good examples what the problems are, regarding patents, trademarks and copyrights, but he also comes up with ingenious, concrete and concise answers. In fact he comes up with ten revolutionary (which is defined in the I Ching as "fire ignites within the lake, defying conditions that would deny it birth or survival") proposals to resolve the biggest problems of the US IPR-antitrust system.
To some degree these solutions could be applied to other jurisdictions, such as China (innovation is crucial for China's economic growth), as well. Let’s look at his proposal to reduce invalid patents, which could limit competition and thus increase price which leads to adverse effects on innovation and complicated, complex and expensive antitrust cases. Bad patent award legal rights that are far broader than what their relevant inventors invented, in regard to technologies that are economically significant:

"1. A post-grant opposition system that would allow any party to challenge a patent after it is issued. This would target the most valuable patents and provide a quicker and cheaper determination of validity that litigation."

Advantages:
  • Instead of perfecting the application process, post-grant opposition makes use of the knowledge of competitors and patent applicants;
  • Litigation is costly, skewed incentives (patentees spent more than infringers and a successful validity challenge benefits all infringers so you get a free-rider problem);
  • Reexamination (limited participation for requesters as well as estoppel provisions);More information can lead to higher quality patents;
  • Post-grant does not require early disclosure: there is no risk that sensitive information fill fall into the hands of competitors.
Disadvantage:
  • Mark Lemley, Douglas Lichtman and Bhaven N. Sampat propose in their 2005 article ‘What to do about bad patents?' (free download at SSRN via pdf) also the post-grant opposition system. They also warn about the risk of collusion: “If an applicant can get a buddy to raise a straw man challenge to his patent and, through that, walk away with a stronger presumption of validity, the whole process will collapse.”
Could this be applied to China's patent system? Like many countries the China Patent Office has the problem of issuing invalid patents. Valid patents could foster innovation, while invalid ones “threaten to increase price and limit competition without any countervailing benefits”, according to Carrier.

1984 Patent Law: First China had an pre-grant opposition procedure (sometimes also called dissenting procedure). Before patents were granted the China Patent Office would publish them three months before, so any person could lodge their opposition at the China Patent Office. If at the end of the three month period no opposition procedure was filed, the patent was granted. Any person could initiate an invalidation procedure at the Patent Re-examination Board (PRB).

1992 Patent Law: Post-grant revocation procedure was set up. Within six months after the grant of patent anyone could request the Patent Office to revoke the patent (article 41). The patentee or the requester of the revocation procedure can file a request for re-examination of the decision at the PRB. The decision (invention patent, but not utility patent nor design patent) of the PRB can be appealed at a People’s court within three months. After the six months after the grant of a patent had expired any person could use the invalidation procedure at the PRB to invalidate the patent. The decision of the PRB (invention patent, but not utility patent nor design patent) can be appealed at the People’s court within three months.

2000 Patent Law: Post-grant revocation procedure was eliminated. A change in the invalidation procedure is that the PRB decision regarding utility patent and design patent can now also be appealed at a People’s court within three months.

2008 Patent Law: Invalidation procedure Every patent infringement case is met by an invalidation procedure.

China never had a post-grant opposition. However, they had a pre-grant opposition system, but because there were few oppositions and they wanted to shorten the examination time and quicken granting of patents, they god rid of it. The last two reasons could also be solved by implementing a post-grant examination. Mr Carrier's book is interesting and can be read by a wider audience interested in patent reform. China's Third Amendment to its Patent Law did not make any great changes in its patent prosecution provisons. Maybe, some of Mr Carrier's lessons will be taken into account for the next amendment.

Illuminating book for everyone interested in innovation and the IPR and antitrust systems that can harness it.
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Wednesday, October 14, 2009

Sweet Irony: Is IP Dragon Liable For Hosting IPR Infringing AdWords?

Law is often walking a few steps behind the developments in society. I propose the term "law lag", whereby I apply the "cultural lag" concept developed by Thorstein Veblen to law. Of course intellectual property and cyberlaw are not immune for this. One important question that should be answered is to what degree are internet service providers liable for content that infringes intellectual property rights on their site. In Europe there have been cases of Louis Vuitton; Gucci; and Chanel against eBay. And of course in China there were the Baidu and Yahoo! China cases (both companies were sued by music companies at different times with different outcomes), see here.

Another category of cases that is of interest is about Adwords. September 22, 2009, the Advocat-General of the European Court of Justice gave his advice for a pre-judicial decision about whether a Google adwords (for example where Louis Vuitton products are promoted by other companies than authorised by Louis Vuitton or even selling fake Louis Vuitton products) can infringe Louis Vuitton's trademark, that was requested by the French Cour de cassation. In short the advice included: the links in AdWords used do not equal to trademarks (those could be infringed on the sites to which they lead), the AdWords do not prejudice the functions of the brand, guaranteeing quality of the goods or the communication- or the promotional function. Contributory infringement is not part of the legislation in most EU countries. However, if the trademark holder finds that the AdWords link to IPR infringing websites and requests Google to remove these links, Google will be held liable and the trademark holder can get damages. Google was not exempt from liability for hosting, because it is not a neutral information instrument, as is requested by article 14 EC directive 2000/31.
Why I am writing this, you might aks, since IP Dragon is about IPR in China and not EU law?

Well although most of the IPR infringing products, that are key in all of these cases, originate from China, I got the following email (September 24, 2009) that concerned yours truly:

"Dear Mr. Friedmann,
I am a regular reader of your blog, and I enjoy your articles about IP in China. That being said, I noticed today a peculiar Google Ad on your page: « Louis.V. Handbags 50% Off ».Intrigued, and you may guess why, I followed the link :
http://www.handbagstime.com/?gclid=CMqR2oDQiZ0CFZQA4wodBG8J3A hum…. A quick look at the « contact us » page : http://www.yeslvgifts.com/contact_us.html It seems to confirm what I thought…What do you think ?
Cheers
Philippe"

This could happen, since IP Dragon writes frequently about fake, counterfeit and IPR infringing products and makes use of Google AdSense (which is the mirror of AdWords), which adapts its content to the subjects and some AdWord users choose these categories to promote their maybe dubious goods. If I would not block these AdWords after I was warned, in principle I would end up being liable. What do you think? Thanks, Philippe, for pointing me out the links.
Photo: Danny Friedmann
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Tuesday, October 13, 2009

Murdoch, Procrustus and the WTO Copyright Cases

October 12, Sky Canaves of the Wall Street Journal has an article about Rupert Murdoch who is urging China to enforce copyright piracy and open up its market for copyrighted products. See here (or on page 8 of the printed WSJ). Mr Murdoch used the World Media Summit in Beijing to tell the Chinese leadership present that these two points are crucial if China wants to achieve their ambition to develop a global media industry.

Mr Murdoch's advice is similar to the two claims the US made against China at the WTO dispute settlement body: DS 362 (China - Measures affecting the protection and enforcement of intellectual property rights) and DS 363 (Measures affecting trading rights and distribution services for certain publications and audiovisual entertainment products), based on the minimum enforcement levels of the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPs) an integral part of the Agreement Establishing the World Trade Agreement (WTO Agreement).

Thinking about TRIPs, and the divergent views it provokes, IP Dragon was reminded about the story of Procrustus. Procrustus was a "hospitable" man who invited guests to his home. There was one problem. If the bed was too big for the guest, Procrustus simply stretched the guest by brute force. And if the bed was too small for the guest, Procrustus would amputate the parts that could not fit in the bed. And because Procrustus had in fact two beds, no guest was ever fitting for both beds. If you are in an imaginative mood, you can see the Greek myth as a metaphor for China that was invited over to do trade under the WTO system, of which TRIPs is an integral part. Some argue that TRIPs is too demanding and that countries such as China are stretched to the limit, while some argue that TRIPs' ambition level is just too low and that more needs to be done like cutting off IPR infringing activities in China. And the two beds can be seen as a double standard in historic perspective: when the developed countries were developing, for example when the US broke free from Brittain, they were infringing IPR as well, and now that they are a developed country to expect developing countries to protect and enforce the same minium standards of IPR rights. Even though TRIPs has built in some flexibilities, it is considered by some as a straight jacket, a "one size fits all", "take it of leave it" treaty.
Picture is taken by exo_sh
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Monday, October 12, 2009

Is Coffee-Mate a Generic Term for Coffee?

Stan Abrams over at China Hearsay is posing a question mark whether Coffee-Mate in Chinese is a generic term and therefore diluting the trademark of Nestlé. See the China Hearsay article which is not devoid of humour here.
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