South Carolina Intellectual Property Litigation

Intellectual Property & Litigation SC

The Power of a Brand – e.g., TV’s

Posted in Licensing, Trademarks, Uncategorized

What brand of TV would you buy right now? You have only 10 seconds to answer, no Googling or Lifelines.

Would it likely be SHARP, SONY, LG, VIZIO, or SAMSUNG?  Can you articulate a good reason, apart from price, to pick one of the above over the others? Do you remember in the years 1999-2000 when people were paying up to $10,000 for large plasma-screen TV’s? I do and I was not one of them.

Do we even know who makes these magnificent sports-bar sized, YUGE in fact, flat screens ? Keep reading. Continue reading “The Power of a Brand – e.g., TV’s”

Beware of the FaceBook Support Group Naked License

Posted in General, Injunctions, Licensing, Policy, Trademarks

Most people seeing or hearing, “naked license,” for the first time will wonder what does nudity have to do with intellectual property or business? Well, the concept that this term / phrase denotes is likely one of the most basic in IP, and it is limited to trademarks?

A quick Google search for “naked” and images shows that Americans are fascinated with the term, naked. For example, have you ever really considered …

2016-01-13__golf naked or 2016-01-13__fish naked ??

The latter involves hooks and line and is dangerous enough fully clothed.

So what in the heck is a “naked license”?

A naked license occurs when a trademark or servicemark owner fails to police their brand. Yes, it is that simple. The license is bare. A naked license can arise when a trademark owner grants a written, de facto or verbal license to another party with no provisions allowing / requiring the trademark owner to ensure the quality of the goods sold or services rendered.

A naked license can also occur, arguably, when there are unenforced quality control provisions in place, or when a trademark owner benefits by the third-party use and acquiesces without any controls. The famed treatise, McCarthy on Trademarks, describes the naked licensing (paraphrased to shorten, italics emphasis added) as follows:

Uncontrolled licensing whereby licensee places the mark on any quality of goods [causing] mark to lose significance. Such uncontrolled licensee use raises a grave danger the public will be deceived.

While the concept prohibiting uncontrolled licensing is rooted in the Lanham Act at 15 U.S.C. 1055, circa 1946, the term naked license appears to have first been used in caselaw in 1959 in the Dawn Donut case, which is better known for its holding limiting trademark injunctions. In Dawn, the Second Circuit cited to a 1948 legal battle between chemical powerhouses DuPont and Celanese, and stated:

But even in the DuPont case the court was careful to point out that naked licensing, viz. the grant of licenses without the retention of control, was invalid. (bold emphasis added).

For those still curious, the issue of abandonment by naked licensing was remanded to the district court. The Dawn Donut court stated, “I would direct the district court to order the cancellation of plaintiff’s registrations if it should find that the plaintiff did not adequately police the operations of its licensees.”

Quality Control (“QC”) and Brand Power

A trademark owner must exercise Quality Control over its own services and those of its licensees. Why? Well, for example, to ensure their customers that a Ramada Inn in Butte, Montana maintains the same standards or service, cleanliness, etc., as another Ramada in Spokane, Raleigh, Savannah, Lubbock, Memphis or Santa Fe. Ok, so maybe expectations are not so high for a Ramada anymore. So change the example …

What if you have a reservation for the weekend at a Westin, Hilton or a Four Seasons? In the dining world for traveling workers, consider an Applebee’s restaurant. Ok, another brand arguably on the decline, maybe an Outback Steakhouse, or a Bonefish Grill? If you are a weary Interstate traveler … Cracker Barrel? You get the picture. You expect them all to be pretty similar to each other, and the Lanham Act says you have a right to that expectation.

For a recent S.C. District Court case on naked licensing, The Trademark Blog reports on Goliath Nike’s recent fueling the fire with allegations of a naked license by FUEL for apparel (by David) via use of co-existence agreements with other FUEL mark users. The district court’s order rejecting Nike’s naked licensing claim and discussing reverse dilution, a topic for another day, is available here.

As a consumer, when out of town, do you not gravitate to brands that you know, absent a strong recommendation to dine or stay somewhere else? Be honest, you know you do, unless you just have a thing for food poisoning. That is an example of the power of a brand. The policy behind the required QC helps consumers minimize their risks of a bad experience, and avoids deception of the public.

FaceBook Support Groups?

So what does this have to do with FaceBook support groups? Think for a moment, use your imagination, it is not really a hard question. Better yet, let’s look at the example that prompted my investigation recently.

Whole30® is a New York Times bestselling book seeking a trademark registration in Class 16 in the field of diet and nutrition. Whole30 also owns a registered servicemark in Class 44 for dietary and nutritional guidance; [and] providing a website featuring information about health, wellness and nutrition. The brand manifests itself for me initially by word of mouth (my lovely wife), then as the book (that I bought for her). However, as noted above, it also includes a web-site, and its enthusiastic readers then start their own FaceBook Support Groups (we will not even get into The Twitter handles).

You mean to tell me that Whole30® is responsible for how its customers spread the word about their program? Well, the best way to answer that is to refer you to to the Whole30 FaceBook Support Group “Guide” page. So what does Whole30® require of its readers / support group promoters:

  • use a name that “distinguishes” your group from “official” Whole30® sites; and

That’s pretty much it, the rest of their guidelines are just to “help you help them.” Below is their warning / trademark statement from the Guide page:

Tip: Please respect our registered trademark, and make sure your group name clearly identifies you as an independently-run community. Group names like “Whole30 Ireland” or “Whole30 Support” make it seem like you are a group run by Whole30 HQ, and creates confusion in the marketplace. We will ask you to change your group name if we find there is such confusion.

Take Aways

If you have a brand that is subject to being hi-jacked by your well-meaning supporters, and possibly watered-down by them despite their good intentions, you’d likely do well to copy some of these guidelines from Whole30®, very politely enforce them, and keep a record of it. Probably not a bad idea to encourage the support groups to link back to your official page either ;-).

If you are an enthusiastic supporter of a brand and if you run afoul of their guidelines, you may find yourself saying, “sorry, dude,” when they send you a cease-and-desist requiring you to not-so-much change, but “distinguish” your name. Pizza, btw, is not only not allowed in Mr. Hand’s class, but it is also not allowed on Whole30®, but you could pick the sausage off of Spicoli’s pizza, if the label says it has was grass-fed, has no sugar, etc. (p. 68). Actually the grass-fed comment is not a Whole30® requirement, but it is a good / bad / innocent example of how a support group or Twitter user could change the brand’s true message.

By the Way, btw …

The Whole30® book bought for my wife is now in good use (by me and our daughter). After being pretty overwhelmed by all of the information at first, my daughter and I give it two-thumbs up. She not only now will eat what I cook, she is cooking, planning, learning and having fun with me, which is pretty darn awesome.

 

Startup Branding – Naming Your Product or Business – The “Trademark Spectrum”

Posted in General, Presumptions, Startup Businesses, Trademarks

We should all have a sincere interest in encouraging and assisting startup businesses, particularly those in our local areas. Startup owners are excited, creative, and many times provide useful services, products, and eventually (hopefully) create new jobs. All too often, however, by the time we speak with a startup about Intellectual Property opportunities, they have already picked a product or a business name or brand that is not registrable on the Principal Register as a trademark or servicemark because it is descriptive.

Accept This as Fact … 😉

For purposes of this blog post, take my word for it that the benefits of federal trademark registration are considerable. Ok, if you do not want to take my word for it, read here, here and here. Now that you are convinced beyond-any-reasonable-doubt that trademark registration (federal or state) is worthy of consideration for your startup or existing business, let’s look at the the four most likely landing spots (excluding generic) on the Trademark Spectrum of 5 categories for the name or brand you may be considering.

The “Trademark Spectrum”

Below are the five categories of trademarks as identified by the U.S. Patent and Trademark Office (“PTO”):

  1. Generice.g., Kleenex, Coke, BUNDT for cakes, but maybe not yet for Google or XEROX in U.S., or XEROX (overseas). Here is a list of 41 alleged generic terms to help you better understand this category. There is likely legitimate disagreement as to whether or not all 41 of these are generic. Also, as noted above, it is unlikely that a new mark will be generic.
  2. Descriptivee.g., Columbia Automotive, West Richmond Plumbing, or even Kiawah Island – Some “descriptive” marks can go on the “Supplemental Register,” and await transfer to the “Principal Register,” after 5 years. One way to register a descriptive name is to seek a more limited registration in a stylized / design mark, as was done by Kiawah Island with its scripted font registration, or to seek registration of a descriptive name as part of a logo, as could be done for this mark.
  3. Suggestive – this is generally considered to be the best type of trademark to select – e.g., SPEEDI BAKE for “frozen dough,” or NOBURST for “antifreeze,” or see here for a discussion about suggestive marks.
  4. Fancifule.g., XEROX or PEPSI before they became synonymous with the products they identified and, arguably, started becoming “generic” via genericide.
  5. Arbitrarye.g., XYZ Plumbing. The PTO defines an arbitrary mark as “a known word used in an unexpected or uncommon way.”

Much of the above comes straight from the horse’s mouth, i.e., The PTO’s “Distinctiveness/Descriptiveness Continuum,” Section 1209.01 of the the Trademark Manual of Examining Procedure (“TMEP”). This is the Manual that the Examiners use at the PTO in evaluating federal trademark applications.

Click here for another blogger’s perspective on the five trademark categories.

Goods and Services

The goods and services associated with the mark are what make a mark descriptive. For example, Bass is not descriptive for an English Ale, e.g.,

Bass Logo

but it could be for a fishing related product, such as a BIG MOUTH BILLY BASS. On a historical note, The Trademark Blog reports that the Bass mark for English Ale has been in use since the 1600’s and was the first ever registered mark in England. The triangle-and-script logo above is an example of a stylized / design mark, actually a composite of sorts since it also includes the word mark, BASS, referred to as the Literal Element on the PTO application.

So What Should You Do (or not do) in Deciding Upon a Name

This list below of four suggestions is by no means exhaustive, but should be good to get you started:

ONE: At a minimum, do a search for the name you are considering. Use Google, Bing or Yahoo, or all three. Also search the TESS database at the PTO.

Don’t pick a name without doing some form of a search, the more comprehensive, the better. You may regret not searching and it may be very costly, even fatal to your startup or business.

TWO: Spend time trying to come up with a catchy / suggestive name if you can. Talk to friends, see what similar businesses have done. Also seriously consider engaging an advertising or marketing firm to help you in selecting a name and / or logo for your business. This logo is something you should hope to use for the life of your business.

When Google introduced its new logo recently, did you (like me) have trouble finding the Google app button on your smartphone because you were still looking for the old blue button with the lower-case “g” on it? The value of consistent use of a logo should not be overlooked.

Don’t select a descriptive name unless it is part of an informed strategy to do so. One arguable benefit of a descriptive name is you are unlikely to be sued for trademark infringement, but that is not guaranteed. Some experts have predicted a possibly bright future for descriptive marks.

THREE: Plan for trademark registration to protect your brand and build value in the future of your business. This can involve many aspects of branding, including company names, product names, product tag lines, sales phrases, stylized logos, composite logos, etc., etc.

Don’t ignore (or continue to ignore) the benefits of trademark or servicemark registration. It is difficult to imagine a company or business that would not benefit in some way by employing an informed trademark portfolio development strategy.

FOUR: Once you think you have educated yourself on these issues, talk to an experienced trademark attorney about your options. If the startup has limited funds, you will want to know which trademark / servicemark filings need to be prioritized and be ready to budget for same in your search for capital. For some business models, the trademark is possibly the most valuable asset from the outset, and should not be overlooked.

Similarly, if you insist or cannot escape your commitment to a descriptive name, getting it on the Supplemental Register sooner is better than later and will start the clock running on the five-year secondary meaning presumption to move the mark to the Principal Register.

Trademark law can be very complex and is usually (almost always) filled with irony. For example, consider an excessively eager party with an unregistered trademark / brand that sends a nasty cease-and-desist to another party only to discover the recipient of the nastygram is the senior user of the mark! Then the supposed senior user learns in discovery that their mark was not used for 2 or 3 years and may now be considered abandoned, making the sender the senior user?

Don’t Overlook Trademark / Servicemark OPPORTUNITIES

Amongst the primary Intellectual Property fields of patents, copyrights, and trade secrets, trademarks are often overlooked as simply the name for a business. Overlooking this opportunity to brand your business or product is often costly in terms of value when it comes time to sell the business, or in lost resources when time must be spent responding to infringement allegations.

Whether your business is a startup or has been around for generations, you want to be able to avoid or overcome problems related to use of a descriptive name. If possible, doing that from the outset is likely best. In any event, don’t let becoming informed about your trademark options be a missed opportunity for your startup.

 

FaceBook Defamation – WARNING: you may not “like” this

Posted in Copyright, Defamation, General, Libel, Mediation, Policy, Slander, Trademarks

If this title, FaceBook Defamation caught your attention, chances are you already use FaceBook, Twitter, LinkedIn, Instagram, SnapChat or other social media platforms. Consider this, FaceBook alone claims as many as 968 million average daily users, and over a billion users on busy days. Yes, that is average daily FaceBook use equal to three times the 2014 U.S population of 318.9 million. How do you “like” that?

According to EbizMA, Twitter is second in users with over 300 million users, followed by LinkedIn, Pinterest, Google+, Tumblr and fast growing Instagram. You (or your business) could be defamed today by someone in a remote Asian village, or by an domestic online avatar. More likely, one of your so-called FaceBook friends will defame you. Online defamation also occurs in obituaries, comments to news / sports articles, Yelp reviews of your business, the RipOff Report, or anywhere on the Internet.

Let’s look at how defamation on FaceBook happens and on other social media platforms.

What can you do about Twitter / Internet / FaceBook Defamation?

Good question! In the U.S., the constitutional right to free speech effectively equates to the right-to-defame-and-be-sued. The comments may be malicious, stupid, reckless, rash, passionate, mistaken, negligent, etc., but they can give rise to an action for general, special, and punitive damages. There is a possibility of obtaining a permanent injunction with a final judgment of defamation, however, even then, the speaker could say the same thing in a slightly different way.

You may also ask the search engines (e.g., Google, Yahoo, and Bing) to De-Index the URL.

Assuming a court finds that follow up comments are defamatory and violate that court’s order, you could presumably have the speaker / writer placed in jail for contempt of court. However, ask yourself, when was the last time you read a story where this occurred in the U.S.? Likely “never!” The Seventh Circuit recently addressed the libel injunction issue to provide some clarity. As noted in the article by Professor Volokh in the preceding sentence, as was noted here before, the context of a defamation, particularly if per quod instead of per se, is difficult to address in a forward-looking rule that is necessarily “narrowly tailored.”

The Biggest Problem with most social media defamers

They have no accessible assets. Damnit you say. What about that big house in the gated neighborhood? mortgaged. Lakehouse? also mortgaged. Mercedez-Benz S-Class? leased. 401(k)? untouchable! Damnit you say again! Judgment proof? Practically, Yes, the average Joe or Jane has little to nothing to lose. When was the last time you “negotiated” with a 3-year old over a popsicle on hot summer day? As Churchill stated, “never engage in a battle of wits with an unarmed man.”

For this reason, the typical ‘Merican notion: “we’ll sue them into the next century, take every dime, then go after Grandma,” is ill-fated. No sensible attorney will take a defamation case on a contingency if the defendant is insolvent. So those with financial resources have an advantage, because they can afford competent counsel and pay hourly to pursue a case to judgment, or otherwise into oblivion.

If sued, an asset-free defendant may be wise to take a default judgment, confess to judgment on better terms, or even worse, they may answer and defend pro se. When was the last time you prepared for and travelled to a deposition only to discover the defendant / witness does not show up? At least you got to know the court reporter a little better.

Can I get some concrete options, please? Sure, Here are Seven (7) …

1. Do Nothing: Yes, that is right. We tend to think first about how everything affects us. Often what seems a mountain today is a mole-hill next week. Engaging in a dispute over these matters is will require a tremendous amount of emotional energy, time, money and more. Ask yourself:

(i) Does your son, daughter, or elderly parents need you?

(ii) Is there any fruit on the tree, or mostly just more despair and distractions?

(iii) How else can I come to terms with this?

2. Call and Speak to the Person: Many people cringe at this, however, if the defamation to an individual, much useful information can be obtained from a telephone call. This is information you might not ever from a an impersonal or threatening email or a letter. The whole affair could be a misunderstanding, which is likely if the statements are from a friend / former friend. The call may resolve the dispute and you have your friendship back, even better than before.

3. “Mediate” the Matter with a Mutual Friend / Respected Colleague / Minister / Counselor / Trained Neutral, etc.: This option is similar to #2 above, except you will be using the power of a mutually respected “mediator” to help you both resolve the dispute, misunderstanding, etc. The mediator must be able to help, not hurt the situation, and a professionally licensed and trained mediator, with clear ground rules is recommended. Face-to-face contact is not required, but reconciliation and apologies probably should be mediation goals.

4. Send a Cease-and-Desist Letter: As discussed above, this may just serve to kick the sleeping tiger who was growing tired of defaming you and cause them to go on yet another passionate tirade against you. This can be a very good option for a business defamation, or if the potential defendants have assets or possibly insurance to cover the defense of actions in question. many defamation actions will involve intentional conduct of the defendant and, therefore, will not (in theory) be subject to defense or indemnity by insurance.

5. File a Lawsuit: This may get the attention of the defamer, however, again, if they have no assets, they have nothing to lose and could simply take a default judgment, or worse, answer and defend the case pro se. Any injunction you may obtain will likely be too late and too narrow. If the defamation is to your business, the identity of the defendant (Jane Doe) may take months to discover, and could require legal action / subpoenas in multiple states.

6. Utilize Platform Policies to Request a Take Down of Offensive Comments: Sounds promising, however, platforms are only “required” to act on infringement of registered trademarks or copyrights. Defamatory comments, on the other hand, will only be taken down according to platform policy. Policing for defamation generates no $ and no liability (see CDA below), so it is not done. To get offensive comments taken down by FaceBook, Twitter, LinkedIn, Pinterest, etc., you need to show a defamation per se, false statements and respectfully ask for take down per their terms of service.

7. “Ask” the Search Engines to “DeIndex” the Offensive URL: This option was formerly the subject of published Google procedures, but now is left to their discretion, much like social media policies referenced above and discussed further below. The search engine may remove very specific URL’s adjudged by a court to be violations of law. Once a judgment is obtained (perhaps by default, confession, etc.), providing it and ask in as narrow a fashion as possible for DeIndexing the URL’s.

The URL’s may still be there on the “www” but if not reported in the search engine results, good luck finding them.

Social Media Terms of Service / User Agreements

The social media User Agreements / Terms of Service will limit liability contractually for content posted by third-parties, and will also reserve rights to take down material in violation of the User Agreements and / or Professional Community Guidelines (LinkedIn). As the cases show, even though the Communications Decency Act of 1996 (“CDA”) grant of “immunity from suit” is broad and almost bullet-proof, lawsuits continue attempting to expand upon / create further exceptions.

Twitter, LinkedIn and Pinterest terms of usage all specifically mention “defamation” or “defamatory” comments, however FaceBook does not. Instead, FaceBook’s Terms of Service provides more generally as follows:

  1. You will not post content or take any action on Facebook that infringes or violates someone else’s rights or otherwise violates the law.
  2. We can remove any content or information you post on Facebook if we believe that it violates this Statement or our policies.

As you can see, FaceBook maintains discretion to remove content that violates their policies, so you may get a remedy by convincing them that the statements about you violate the law or the rights of others and should be removed.

The Communications Decency Act – Immunity (from Suit) for Service Providers

It is almost impossible to sue the social media platform for damages relating to any defamatory or otherwise false information posted by a third-party. This is due to immunity from suit (not just damages) provided to the online service providers by the CDA. While this may seem frustrating and create unjust results in certain circumstances, arguably, this immunity was necessary to create the free exchange of information on the Internet and its growth since 1996.

It should be noted that there is an exception in the CDA for intellectual property rights, which some courts have interpreted to exempt only federally protected IP rights. Criminal acts, such as online obscenity and child pronography violations are not immune. Also, the ISP’s are not immune for defamatory content they post or republish, only content of third-parties. For this reason, what you get from social media is a platform / forum to communicate with other “third-parties.”

You don’t have to “like” it

The above list of options is not exclusive, and we would always suggest you consider any reasonable way to resolve your disputes without the need for utilizing options 4-7 above. Thinking creatively to resolve difficult disputes is what lawyers do, and you can too, even though you may not “like” it.

If the matter is still troubling you after careful consideration and consultation with trusted friends and relatives, causing loss of business or reputation, you may want to speak to a lawyer to explore the above options, or others. When the defamation is to your business online and can be viewed by potential clients or customers, your special damages could be accumulating so fast that you can’t afford not to take action.

If you believe you have been the victim of a defamation on FaceBook or otherwise, call our firm for a free initial consultation at 803-223-6942.

 

 

Motive – Help Yourself

Posted in General, Jury Issues / Trial, Trademarks

I hope everyone is having a wonderful June. Extremely busy here. School is out. Our three teenage sons are all playing summer baseball on high school and college fields throughout the Southeast, swimming on the Rockbridge Swim Team, as well as working, lifting weights, going to Palmetto Boys State, The Naval Academy Summer Session, and trying to get all our fishing gear and boats ready for a week at Litchfield / Pawleys Island. In the midst of all of this, I am working so hard and am presently motivated to get strong and stay stronger than my teenage boys who are closing the gap rapidly. Ask them and they will say they have passed me already. They just can’t “help themselves.”

I am now so old that I actually went to sleep before the end of all three #CWS games between Vandy and UVa. Congrats btw to my child hood friend and now famous Mayor of Greenwood, @WelbornAdams on the Vandy Victory. Check out his Twitter profile and make sure he removes the “long suffering Vanderbilt” claim there. As a music lover, Welborn will hopefully appreciate that in analyzing motive, “we are programmed to receive” (The Eagles, Hotel California), and also the link below which you must read to find and listen to @OzzyOsbourne while still with @BlackSabbath. Listen to those guitar strokes at the start of Hotel California and you will be motivated for something.

The IP Topic You will Not Be Hearing Too Much About Today:

My IP idea for a new blog post was to remind everyone that state trademark registrations, for example as provided for at S.C. Code Section 39-15-10 et seq., pack a strong punch for any registered trademark holder looking Continue reading “Motive – Help Yourself”

Follow me, don’t follow me, I’ve got my spine, I’ve got my orange crush …

Posted in Trademarks

Dig the drum beat start to this classic REM song … Orange Crush! Nothing like a little rock to get in the mood to talk trademarks! The text on YouTube link to song states “Orange” is a reference to Agent Orange as used in Viet Nam. Singleguy at Song Meanings apparently disputes this and claims the song is about he and his brother’s decision to stop for an Orange Crush that saved their spines! Good luck with that SingleGuy!

R.E.M. became famous in the 1980’s when the author was in high school / college. Despite their home of Athens, Georgia (great college town) being less than an hour away from my alma mater Clemson University, I never saw R.E.M. perform live (that I can remember!). We did, however, listen to their unique / ahead of its time brand of music for years and years as Clemson bands, including personal favorite The Next Move (eventually Cravin’ Melon) covered R.E.M. songs in the 1980’s, including rockers like Radio Free Europe, The One I Love, and soulful ballad Everybody Hurts. Probably more R.E.M. songs could have been covered, but for lead singer Michael Stipe’s unique “trademark” voice that could get us back to Publicity Rights, but we will stay focused, at least for a few moments. See also @dariusrucker another southern “trademark” voice and just won another deserved Grammy for “Wagon Wheel.”

OK, let’s move on to learn talk trademarks in our own unique trademarked manner (i.e., with music, always with music).

This blog purports to brand itself as covering all types of Intellectual Property (with music and at least one fake / surprise link), and whatever else “we” hope will educate and entertain you. Continue reading “Follow me, don’t follow me, I’ve got my spine, I’ve got my orange crush …”

Publicity Rights – Litigation Decades After Death Reconciling State Laws of NY and WA …

Posted in Publicity Rights, Trademarks

A principal part of this blog is to include music in at least one link in each post. For this post, the subject is music, good music, classic classic rock music (P.S. its Jimi Hendrix!), so the decisions on which song(s) to include were much easier and a heck of a lot of fun. P.S. There are at least four classic songs linked here, so enjoy reading / jamming on with Jimi.

Publicity Rights are often overlooked in IP. The Right of Publicity is not a federally protected right like patents, copyrights and trademarks, except to the extent it overlaps with trademark rights, which is not uncommon as shown below. Publicity Rights are also protected by approximately 28 state’s statutes, for example in the state of Washington, which we will also discuss below with respect to the great Jimi Hendrix.

When folks become famous, people rush to make money off of their fame. Continue reading “Publicity Rights – Litigation Decades After Death Reconciling State Laws of NY and WA …”

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