State of Innovation

Patents and Innovation Economics

The Flawed Private Property Argument Against Immigration

One of the arguments being bandied about for limiting or stopping immigration is based the idea that all the people in the U.S. have some sort of collective property rights in the land.  As property owners we can decide who we allow on our land and it is the job of government to protect our property rights.

This argument shows a flawed understanding of property rights.  You obtain property rights in something because you made it productive or created it.  Of course you can also trade your rights in something you created for currency and then contract to buy something else, thus obtaining property rights in the item.  Your rights in say land are limited by the activity you undertook to obtain those rights.  For instance, if you farmed the land and say put a house on it, then you have a right to continue those activities and ones reasonably related to them.  However, this does mean that your property rights extend to the center of the earth or up infinitely into space.  It also does not mean you can put a huge pigsty on the edge your land next to your neighbor’s house.  Note this was/is true under common law, no need for regulatory law or home owners’ associations.

Similarly your property rights in land cannot be used to make someone a prisoner, that would be a contradiction of the whole idea of rights.  Natural rights are based on the foundation of self-ownership or self-sovereignty.

Is man a sovereign individual who owns his person, his mind, his life and its products – or is he the property of the tribe …[1]

Capitalism: The Unknown Ideal, What is Capitalism, p 10.

Locke also based natural rights on self-ownership or self-sovereignty.  These ideas are not axioms but derived from observation and logic.[2]  Since you own yourself, you own those things you create, however the limits of your property rights are determined by what you created (made productive) and some practical legal implications.  Similarly, self-ownership means that you can travel freely.  If that was not the case then someone could control where you went, which means you do not own yourself.  In other words that means you a prisoner or a slave.  The logical opposite of the freedom to travel, is imprisonment. 

StatueofLibertyAre these rights in conflict?  No.  Property rights cannot be used to imprison someone or to keep two free people who want to meet or trade from doing so.  There have been cases in which a person sold a land locked plot without an easement.  The courts have uniformly ruled that there was an implied easement, because otherwise land would be an island or a prison and the sale of the land would have to be considered fraudulent.  The sale of the land implies being able to use and access the land.  This idea was incorporated into Homestead Act.  Public roads or thoroughfares were built into the structure of the Homestead Act.  This concept of freedom to travel is also incorporated into the idea of navigable rivers and the freedom of the seas, which the U.S. and British navies have fought to preserve for over 300 years.

Public thoroughfares are controlled by the government.  The government does not own these public thoroughfares, but it does police them.  The only right that people relinquish to a proper government is the right to use retaliatory force.  This is true in both Rand and Locke.  This means that a proper government cannot initiate force against anyone.  Public thoroughfares are by definition public and can be used by anyone and a proper government cannot stop, question, ask for papers, etc., of anyone unless they are suspected of crime and crossing a border is not crime under a proper government.  To undertake any of these actions is to initiate force.  This principle is part of the US constitution in the fourth and first amendments.

Many people want to scream, “but what about the gulch in Atlas Shrugged”.  First of all, the gulch is private property and that private property did not limit anyone’s ability to travel freely.  Second, the people in the gulch were at war.  Remember that Ragnar Danneskjöld had openly attacked the ships of the nations of the world.  Every person in the gulch took the oath which put them at war with the governments of the world, just as surely as signing the Declaration of Independence.  Ragnar and the people in the gulch did not initiate force against anyone.  For anyone to compare the government of the United States to the gulch is repulsive.  The U.S. government initiates force against its people all the time, from the NSA spying on everyone, to stealing the work of innocent people, to profiting off of civil asset forfeiture, to its theft of peoples’ property rights in land through wetlands and other legislation.  It is also absurd to suggest that the U.S. is at war with every other country in the world.  No armies are crossing our border.  The terrorists are not mounting a war against.  The biggest damage inflicted by all the terrorist attacks on the U.S. by foreigners is their ability to get us to ignore the values that created the U.S.  This damage is infinitely worse than all the damage they have caused including 9-11.

There is a principled solution to the immigration problem and that involves eliminating all welfare (including Social Security and Medicare overtime), ending the war on drugs, and eliminating the income tax system.  The standard retort is that is not practical.  This sort of argument philosophically is the argument of a pragmatist.  The goal of a pragmatist argument is to suggest principles are impractical.  As Hank Rearden told the Wet Nurse “try pouting a ton of steel without rigid principles.”  Do we ever say the principles of physics get in the way of building an MRI machine or a computer or an airplane?  The only person who would make such a statement is a charlatan or a lunatic, but somehow this is considered a reasonable position in the realm of politics and ethics.

Despite this the pragmatist whines that you could never get any of these solutions passed in today’s political environment, so we have to abandon our principles they proclaim.  Really?  Given the scandals surrounding the IRS and the clear case that it is a political agency designed to punish political enemies, it should be easy to make a principled, politically popular stand against the income tax.  This is really a no brainer and the fact that it is not one of the main topics of the republican primaries shows that most people in the GOP have no interest in freedom/capitalism.  There is already a wide spread national movement to legalize marijuana.  It is a political no brainer to tap into this and make it part of a program to eliminate the war or drugs including eliminating the FDA, which has also become politically unpopular.  That just leaves the need to eliminate welfare.  No it cannot be done overnight, but with Obama corporate welfare, the anti-federal reserve movement, the anti-bank bailout movement, it should be easy to make a politically popular case that all welfare is counter-productive or worse.  For instance, it is easy to show that if welfare were really about helping people then we would have eliminated poverty (financial) a long time ago.  Tying these ideas in with the fact that welfare provides a perverse incentive for foreigners to come here and not work, should be an easy political position to sell.

The fact is that the anti-immigration position is a political loser in any national election.  The people who support this position are in a minority as Ed Hudgins convincingly explains in his book The Republican Party’s Civil War.  Even the pragmatic argument against immigration and free travel fails by its own perverted standards.

The pragmatist argument is not really about being practical it is used to hide a collectivist or xenophobic agenda.  Anyone who continues to push a border wall, or a national ID card, or any other limits on the immigration and travel of people across the US border can no longer pretend they are freedom.



[1] Rand in other places states that Rights are based on the right to life.  She necessarily had to mean the right your own life, to be consistent with inalienable rights.  It is clear that she was not opposed to the idea of self-ownership and did not see this inconsistent with the idea of natural rights.  It is also easier to understand natural rights from a self-ownership point of view than a right to (your own) life.

[2] It is beyond the scope of this paper to explain the derivation of natural rights by Locke and Rand.

September 20, 2015 Posted by | Blog | 6 Comments

Save The Inventor

December 13, 2014 Posted by | Blog | Leave a comment

Farewell to Reality: Book Review

This book explores the state of modern physics and suggests that theoretical physics has passed over into fairy tales.  The author suggests that many of the models proposed by theoretical physicists today are untestable, not that they have not yet been tested, but they can never be tested.  These theories have become total disconnected from empirical evidence, i.e., reality, and therefore threaten the vary basis of science.  He shows that this has led to theoretical physicists providing a scientific veneer to theological arguments, particularly the strong anthtropic principle in cosmology.

This book is very well written and is probably the best overview of modern theoretical physics I have ever read.  The book starts out by providing the “standard” understanding of modern physics.  Then it proceeds to examine some of the problems in physics, starting with Newton’s gravity as force at a distance.  He examines some of the early debates about quantum mechanics and then moves onto the standard model of particle physics and cosmology.  However it is not until he gets to String Theory, M-Brane or M-Theory and related ideas.  In my opinion, the author gives most of these ideas in physics the benefit of the doubt.  The author is respectful and provides overwhelming arguments before he calls any particular model fairy tale physics.  This is an excellent book for anyone interested in these issues.

Now for my criticisms: the book’s vague development of what constitutes science, while perhaps generous to the ideas he is criticizing is hardly a rigorous statement of the foundations of science.  In part, this is because the author buys into a platonic view of reality.  Strangely enough many of the models he criticizes also are based on a platonic view of reality.  If his foundations of science were more closely aligned with those of the enlightenment his arguments would be strengthened and he would find the source of the problems started earlier in physics than the book portrays.  If you are interested how anti-enlightenment philosophical ideas caused physics to go off course leading to the problems today see Absurdities in Modern Physics: A Solution, by Paul Marmet.

This book is part of a growing chorus that modern physics has lost its way and therefore all of science has also.

October 28, 2014 Posted by | Blog, physics | , | Leave a comment

Excellent Article by Adam Mossoff: Do IP Rights Promote Economic growth

Intellectual property and economic prosperity: Friends or foes?, in  The article reviews a report by the Mercatus Center, a free-market think tank that is highly critical of IP.  Here is one of my favorite quotes from the article:

“It is bewildering, for example, to find a libertarian think tank arguing that government projects are superior to private property rights as a means of directing resources to innovative activities.”


What is amazing is that the evidence between inventions, economic growth, and property rights for inventions is overwhelming.  Those countries with the strongest patent systems are leaders in creating new technologies and the leaders in disseminating new technologies.

August 28, 2014 Posted by | Blog | , , , | 6 Comments

Interesting Infographic – Computer Science Zone

August 28, 2014 Posted by | Blog | Leave a comment

Guest Post: Engine That Drives The US Economy

This story starts about 1982. At the time we were doing job shop work One of the Engines that drives the US economy is the US patent system. Any talk about changing it or doing away with it is stupid. The rewards that a patent can bring are a huge incentive to create. Without the US patent system, I would be near destitute. I have 28 patents I have had 5 licensing contracts. Some of these are world wide successes now.  Do a Google search for my  and get over 30,000,000 hits. Without US patent protection, I wouldn’t have had an incentive to create these inventions. Anyone who says the opposite is juvenile-stupid or worse. This is why inventors from all over the world are flocking to the US to patent their inventions and corner one of the worlds biggest markets!

Another engine that drives the US economy is our free enterprise system.

[My business started] in my 2 car garage. One day my neighbor came over and asked if I could make some security wrenches for them. He was the manager for the warehouse of a large cable company. He showed me the sample and I could see it would be a very nasty job. So I said we were too busy. He kept coming back. On the third time I said we would. So I made him samples and received an order for 100. He reordered about every 9 months. In the mean time, another cable company wanted some of the same. My other machining business was evaporating. My son Eric said,  “lets go in to the cable business,” so I said OK. The first thing Eric did, was to go to work for a large cable company. There, he learned the business and got acquainted with a lot of personnel. This helped with future sales because my son Eric knew a lot of people in the cable business. He worked there for the summer and then came back to work for me.

I decided to build a house first.  It took 6 ½ months plus time for drafting and planning. I drew up plans and had them approved by the county. It was a raised ranch house with a 1700 square foot full basement, which would be a machine shop. It was great.

Eric came in one day and said, “ We need a name for this new business.“ I agreed.

I said,make a list tonight starting with your top choice, and we will discuss it tomorrow. The next morning we had the same name at the top of our lists. It’s ‘Cablepro”. I think this is a great name. Every cable installer that sees this name thinks in the back of his mind that these tools will make him more professional

Now the problem was expanding the business. We did several things which worked very well. One thing was that I bought a cable book which listed every cable system and their personnel in the USA. It cost me $375. I chose 1500 of the biggest cable systems in the US to make a mailing list. I made a flier although we only had a few tools and mailed them.

Mailing lists typically yield a return of around 2%. I received over 300 orders from this mailing. That is over 20%. It is important to recognize why this worked so well. First of all,  everyone who received a flier was using these very tools. Secondly, big companies don’t want to sell a $10 wrench. They want to sell a truck load of amplifiers at several thousand dollars each or several miles of cable, All the orders were for one tool because they had never heard of us. A few months later I sent out another flyer with more tools and received over 100 orders which were $100-$300 dollars each. Now we were  nationwide. I had to hire some more employees.

Another thing we did which worked very well was [to have] a truck with tools on the road. A customer would call and say they wanted to buy a dozen wrenches so the truck would be there the next morning. They usually bought more than they originally ordered. It is expensive to keep a truck and an employee on the road but it paid off. We took over the tool business in this town. An unforeseen benefit was new products. All cable systems have a box where they throw broken tools. My son Eric would ask to see if any of our tools were returned and none were. Whatever tool was the most prevalent in the box was our next new product guaranteed not to break. After we did this several times the cable companies starting saving the broken tools for us to redesign and make. Our biggest competitor was whining about how bad [the] sales of tools were. It was because he didn’t deliver. We never made money with that truck,  but we built a business.

Now I had 5 men working for me full time. One on the road and 4 of us in the shop making tools. Business was booming. We had 25 products by now and sales had hit $25,000 per month. What I needed was some fancy machinery which I didn’t have. I didn’t have the money to buy the machinery or a shop big enough to use it. Growing New businesses soak up operating capital like a sponge.

All of a sudden, a potential buyer shows up. His sales had dropped 50% [in the] last year and he had fancy machinery sitting around. We soon had a deal. I sold him the rights to my products for 5% of sales for 7 years. I gave him a customer list, a line of products and my son Eric. My son knew a lot about how to make the products. He was in charge of getting the tools made at the new company. He was responsible for ordering materials, Scheduling production and running production. It went smoothly and soon I was getting royalties.  I called it a licensing agreement but my accountant said it was a delayed purchase plan. Anyway, the checks cash the same.

At this time I had about $25,000 in receivables which I was able to collect and $25.000 in inventory which I sold to my licensee because he didn’t have anything to sell. One of the measures of business success is how long does it take to turn over your inventory. One month is outstanding. The shop was working 6 days a week and Sunday was for payroll, taxes, bookkeeping and preparing orders. I hadn’t taken any money out of the business since it started. These were factors which helped make the decision to sell,

Afterward, he asked me to see if I could design a crimper that would crimp a connector fitting round instead of the standard hex crimp. The standard hex crimp is on a round cable and it lets water and signal in and signal out. Does that make any sense? I am an engineer by trade, so I did it and it has been a real winner. This is an unusual situation, Using this crimper enables the cable company to use cheaper connectors, saving 5 cents each. If an employee is putting on 50 connectors a day you can see what a saving this new crimper is. The crimper will pay for itself. This tool and the others are being sold all over the world now.

By now the licensee has a factory in the USA, one factory in China, and two factories in India. He just finished building a new house for $11,000,000. This is what new products, intellectual property and hard work can do for you.


By Don Kesinger

February 25, 2013 Posted by | Blog, News | | 1 Comment

Reason Magazine: Using Emotion and Faith to Advance their Anti-Patent Agenda

Reason Magazine has released a video, entitled How Patent Trolls Kill Innovation.  The magazine banner states that they support “Free Minds and Free Markets” but this video relies on the same irrational, emotion driven logic as the media.  I cannot point out all the errors in this video, but below I will highlight some of the major points.  Before I do that , let me show some of the sleazy attempts by Reason Magazine to use emotion and hidden assumptions to advance their argument, instead of reason and logic.

Emotion and Faith

*The video starts with the hidden assumption that patents are not property rights – faith not reason.

*The video uses the phrase “patent trolls” to immediately define who is right or wrong without actually proving their case – an emotional appeal.

*The video selects a small entrepreneur to narrate their story – using the typical liberal tactic of pretending this is a fight between a small virtuous entity against a big faceless entity.  The reality is that so-called “Trolls” sue large entities much more often than small businesses.  Emotional appeal, not reason.

*The video uses an “expert”, Julie Samuels, from a biased source, (Mark Cuban’s lobby group) who has no qualifications in the subject.  She has a degree in Journalism and Law, which means she is NOT A PATENT ATTORNEY and does not have the technical skills to understand the underlying technology of patents.  Faith not reason.


Title Search

The video never asks if Austin Meyer did a patent search and clearance opinion before building and selling his software.  You would not build a house without doing a title search to make sure you owned the land.  Given Mr. Meyer’s surprise that he was being sued for patent infringement, he almost certainly did not undertake this simple due diligence step.


Using Other Peoples’ Property

Mr. Meyer complains that he may have to pay the patent holder for the life of his product.  Yes, that is what happens when you use someone else’s property.  This is like a steel manufacturer complaining that they have to continue to pay for coal or pay rent for a building they do not own.

Note that the underlying technology is critical to Mr. Meyer getting paid, but he doesn’t want to pay for it.


East Texas

The anti-patent crowd always complains that these suits are brought in East Texas.  If someone refused to pay you rent for staying in your house, would you chose the slowest court in the country or a faster court?  Federal Court for the Eastern district of Texas has been one of the fastese to bring invention squatters to justice.


Patent Trolls

The video makes the implicit assumption that non-practicing entities (NPE) are evil.  However, Edison was a NPE, as was Tesla, as was almost every great inventor in the last 200 years, as our most major corporations, as most of our Universities and Government labs.  Our Founders looked at the issue of requiring inventors to practice their invention in order to keep their patent and rejected it.  They voted for a FREE MARKET system where people could be independent inventors, just like writers do not have to be publishers in order to obtain or keep their copyrights.  This is consistent with Adam Smith’s division of labor theory.

The video takes the stand that if you buy the patent rights instead of being the inventor,this is somehow evil.  First, all corporations buy their patents – often by paying wages.  Corporation don’t invent so they have to buy their patents.  Second, we do not argue just because you didn’t build your house you cannot rent it out .


Old Technology

Mr. Meyer states in the video that the technology he wants to use is old, from the 80s.  If this were true, Mr. Meyer would be free to use it.  But, instead, he wants the updated version of the technology that ensures he gets paid, he just doesn’t want to pay for it.


The Patent Should Not Have Issued

Neither Mr. Meyer nor the so called expert, Julie Samuels, are patent attorneys.  They are NOT QUALIFIED to evaluate the scope of the claims of a patent.  It is interesting how lay people (I include attorneys who are not patent attorneys in this definition) believe they can just read a patent and evaluate it, but they would never try to do the same thing with a Warranty Clause in a contract or an Indemnity Clause.  No one would believe a Journalism major or an attorney (non-technical) is qualified to comment on software technology; but somehow they are qualified to comment on patents on software?  This is like asking a plumber to comment on the design of a Nuclear Power Plant.


Patents and the Free Market

Patents are property rights, just like a property right in a farm.  The basis for all property rights is creation.  Inventions are clearly creations.  Property rights are part of the free market.  Those countries that are the freest economically have the strongest patents laws, are the most innovative, and have the highest standards of living.  REASON MAGAZINE is pushing a point of view that is much more consistent with a Marxist’s labor theory of value than Capitalism.



REASON MAGAZINE is neither promoting REASON or FREE MARKETS in posting this video.





Reason Magazine: How Patent Trolls Kill Innovation

February 21, 2013 Posted by | -Economics, -Philosophy, Blog, Innovation, News, Patents | , , , , , | 5 Comments

The Pseudo Scientific Basis of Environmentalism

The underlying “scientific” basis for all environmentalism is the second law of thermodynamics or entropy.  Environmentalist believe that entropy scientifically proves that we have peak oil problem, an over-population problem, a pollution problem, global warming and the myriad of other things environmentalist believe need to be fixed.  It provides the moral basis for their argument that government must force people to quit using their cars, pro-creating, using ‘fossil fuels’, hydraulic fracturing, pesticides, irrigating, etc.  According to environmentalists it also proves that technology can never solve these problems and the only solution is for humans to abandon technology and live in a “state of nature.”  Entropy provides them the moral and scientific high ground in any debate and justifies any government intrusion into the private lives of people, including killing them.

Entropy causes things to become disordered according to environmentalists.  One paper explains it this way:

Things fall apart because it’s the Law: the Second Law of Thermodynamics also referred to as the Law of Entropy. Everything disintegrate, degenerate, shatter, fracture, split, tear, break up, break down, break, rust, die, decay, wear out, rip, or move from a state of order to disorder; not unless new energy is infused for regular maintenance and rebuilding of its structure.[1]

The paper further explains, “Left unchecked, entropy will eliminate all life forms by randomizing vital life-sustaining molecules.”  Jermy Rifkin, a leading environmentalist, has written a whole book about entropy, which argues that we need to use fewer resources to forestall the inevitable collapse of civilization.  The most extreme version of this idea is called the Heat Death of the Universe, which states that the Universe will end up with a uniform temperature and uniform distribution of matter.  Human’s are accelerating this process, according to the environmentalists and the more humans there are and the more energy they use the faster this is accelerated.  Their answer is fewer humans and less technology.  I wondered how they would tie entropy to anthropomorphic global warming (AGW) their favorite crisis right now.  One paper entitled Entropy and Global Warming I, explains the connection this way.

Population Growth and intense per capita energy consumption may be seen to be at the root of virtually all of the world’s environmental problems. Global Warming, Depletion of Ozone Layer, Air Pollution, Ground Water Depletion, Chemical Risks, Pesticide Residue in Crops and in Fish.[2]

It appears that the tie between entropy and AGW is over-population.

When I point out that environmentalists are anti-human most people think either I am wrong or that I am exaggerating.  But consider the following examples.

  • A leading environmentalist, Dr. Eric R. Pianka advocated the elimination of 90 percent of Earth’s population by airborne Ebola in front of few hundred members of the Texas Academy of Science who rose to their feet, and gave him a standing ovation.[3]  Dr. Pianka attempted to deny this, but the evidence was overwhelming including his student evaluations.
  • The DDT ban resulted in the death of over 100 million people.  Alexander King, founder of the Malthusian Club of Rome, wrote in a biographical essay in 1990: “My own doubts came when DDT was introduced. In Guyana, within two years, it had almost eliminated malaria. So my chief quarrel with DDT, in hindsight, is that it has greatly added to the population problem.”
  • Dr. Charles Wurster, one of the major opponents of DDT, is reported to have said, “People are the cause of all the problems. We have too many of them. We need to get rid of some of them, and this (referring to malaria deaths) is as good a way as any.”
  • “A total population of 250-300 million people, a 95% decline from present levels, would be ideal,” Turner stated in 1996.[4]

Environmentalist killed over 100 million people in the 20th Century – but they won’t be satisfied until they have killed at least another 5 billion people.




Marxists seem to be the main people who are pointing out that Environmentalists do not understand entropy.  For instance, the paper The Limits to Entropy: the Continuing Misuse of Thermodynamics in Environmental and Marxist theory points out some of these errors.[5]  This paper ends with the terrifying thought “The appropriation of misleading entropy concepts by Marxists is particularly unhelpful, since Marxist theory should be a guide for red-green political practice.”  Another paper that disagrees with this entropy apocalypse is by the renown economist Julian L. Simon, entitled ENTROPY AND ENERGY ACCOUNTING:  ARE THEY RELEVANT CONCEPTS?

Entropy in science is the energy in a system that cannot be used to do work and the second law of thermodynamics states that in an ISOLATED SYSTEM entropy always increases or stays the same.  Entropy says nothing about order.  In fact, crystalline structures have high entropy but are very ordered.  A common example to explain this is provided by the article Entropy is Not Disorder, by Nathaniel Virgo.

Imagine filling a glass jar with water and cooking oil.  Give it a good shake: the oil is now interspersed with the water.  It’s an opaque, homogeneous mess. Very disordered. But now, leave the jar on the table for a few minutes.  In the parlance of thermodynamics, this is a closed system (more or less — we can safely ignore the various ways in which it isn’t), so its entropy must increase over time.  But as we watch, the oil separates from the water, forming a nice, orderly layer on top of it.  The system, to the eye at least, appears to have become less disordered even as its entropy increased.

As a result, all the statements about entropy leading to disorder by environmentalist are just so much nonsense.  In addition, the Earth is not an isolated system.  An isolated system is one in which there is no energy or matter exchange occurs.  Earth receives enormous amounts of energy from the Sun and exchanges it with the surrounding space.  It also exchanges matter with space.  Since gravity affects almost any system, almost no system can be consider isolated.  The Universe might be an isolated system, but new theories about multiple universes, multiple dimensions, and that the Universe is likely infinite cast serious doubt on this.  What this means is that Environmentalists supposed moral and scientific high ground is without any basis in fact.  How anyone who advocate mass murder can be considered to have the moral high ground escapes me.

It is not surprising that environmentalist make these mistakes as most of them do not have a solid background in physics or chemistry.  For instance, Jermy Rifkin, has a BA in economics and a MA in International Affairs.


Environmentalist Do Not Understand Entropy

Their Conclusions are Nonsense

They are Advocating and Implementing MASS MURDER Based on this Misinterpretation of Entropy



Live Simply that Others may Simply Live,


[2] Entropy and Global Warming I, by Dr. Mofiz Uddin Ahmed,

[3] Meeting Doctor Doom, By Forrest M. Mims, III, The Eco-Logic Powerhouse

[4] Ted Turner Repeats Call For Population Curb, by Paul Joseph Watson Prison Planet Monday, April 28, 2008

[5] The Limits to Entropy: the Continuing Misuse of Thermodynamics in Environmental and Marxist theory (PDF version))2008, Science & Society v. 72, No.1, 43-62.  By David Schwartzman,

January 31, 2013 Posted by | Blog | , , , , , , , , , | 4 Comments


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