Customers get shafted in Nvidia class action suit

By on May 3, 2011, 4:35 PM

Many Nvidia customers have been shafted by a cunningly worded settlement. In 2008, laptop owners sued the GPU-maker for defective graphics chips sold in Apple, Dell and HP notebooks. Following a two-year legal skirmish, the class action suit came to a head and both parties reached an arrangement in December 2010. Nvidia agreed to pay manufacturers to replace the faulty chips in their systems -- but things got complicated just before the deal was to close.

At the last minute, it was discovered that HP couldn't repair the defective computers. Instead of swapping the broken chip, Nvidia agreed to replace affected HP systems with an entirely new machine. The settlement reads, "… a replacement computer of like or similar kind and equal or similar value will be provided to the consumer at Nvidia's expense. The Parties will meet and confer in good faith and agree on a suitable replacement of like or equal or similar value."

Many of the faulty systems were high-end tablet PCs and desktop replacements that retailed for more than $1,000. Naturally, affected HP customers expected to recoup their initial investment. After all, their original laptops were defective out of the box, so they've been holding on to a silicon paperweight through the duration of the trial. Considering how quickly computers depreciate, it would be illogical to replace a three-year-old notebook based on its present value.

Unfortunately, that's essentially what happened. In January, the replacement notebook was revealed to be a budget-oriented Compaq Presario CQ56. The 15.6-inch system retailed for a mere $330 at the time ($280 now) and is powered by a single-core 25W AMD V140 processor, a Radeon HD 4250 IGP, 2GB of RAM and a 250GB 5400RPM hard drive. The new machine was priced at approximately the amount that it would cost to repair the defective systems -- about $350.

 

 

Unsatisfied with the CQ-56, some class members sought help from Ted Frank of the Center for Class Action Fairness. Frank filed a complaint in March and the court conducted a hearing on March 28. Frank said he's seen class members be ripped off before, but never anything like this. "Nvidia simply ignored what the settlement said." Nevertheless, the court overruled Frank's objection on Monday, issuing a statement can be summed up in two words: too bad.

"The Court finds that the CQ-56 replacement computer is a reasonable replacement for the original computers at issue in this case. Although there are differences between the CQ-56 and various computers for which it is offered as a replacement, the CQ-56 meets or exceeds nearly all of the specifications of the original computers. In addition, it comes with an advanced operating system, new warranty and other programs," US District Chief Judge James Ware said.

It's unclear if the disgruntled class members will seek further litigation, but Frank recommended that they enlist the help of a legal malpractice attorney to "sue over this breach of fiduciary duty." "It would be nice if the 'consumer advocates' fighting against freedom of contract actually advocated for consumers instead of attorneys and spoke up here," he continued. Would you feel cheated if your pricey defective notebook was replaced by a low-end, albeit more modern PC?




User Comments: 74

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Win7Dev said:

If I paid $1000 dollars for a defective product, I would want $1000 in return or a new computer valued at $1000, period. I don't buy into the crap of "oh, but this is how much its worth now". If I paid $1000 for a paperweight, I would want a new modern laptop valued at $1000.

gwailo247, TechSpot Chancellor, said:

Class action lawsuits are not designed to help the consumer at all. They are a way for lawyers to get rich with far less work. If each one of the lawyers was to put in the same amount of work for each person's case, doing these suits would be far less cost effective. All they have to do is try the same case once, and then collect the money as if they tried 10,000 such cases. Their profits are 10,000 times, with 1/10,000th the work.

We read time and time again of 40 million settlements in which each plaintiff gets 20 bucks, but the lawyers collect 20 million. How is this fair for anyone but the lawyers?

Wendig0 Wendig0, TechSpot Paladin, said:

This is why class action lawsuits don't work. The only people that see any good come from them are the attorneys.

I think it is a safe bet that Nvidia will soon be protested by a popular nameless group.

red1776 red1776, Omnipotent Ruler of the Universe, said:

Pay them back with lesser depreciated dollars....nice

HaMsTeYr HaMsTeYr said:

To most obvious point, of course I'd be unhappy. I'd prefer a full refund or at least a fix of the machine.

Why in gods name would I want a lower end machine.

Trainass said:

And this is an example of another reason why I won't purchase nVidia products. I feel bad for those being screwed over by this. They've been sitting on a garbage machine for so long, and then this happens. Its like being stabbed and then having the knife twisted!

stewi0001 stewi0001 said:

Good way to lose business Nvidia, I'm going with ATI on my next upgrade (which is soon.) As for HP, I don't trust those comp box companies.

Trainass said:

Good way to lose business Nvidia, I'm going with ATI on my next upgrade (which is soon.) As for HP, I don't trust those comp box companies.

I've been rocking AMD parts for the past few years, and base all my builds on the AMD platform. Their CPU's may not be as powerful as Intel's but the CPU's sure do a lot better than nVidia. And with the price/power that you get from an AMD CPU, you can afford a high-end (or two) GPU, plus the rest of your system.

Guest said:

So... let me get this straight.

Costumers paid for a (back in the day) $1000 laptop.

And now they get a replacement laptop WHICH EXCEEDS or has nearly equal specs to the 3-year-old laptops. And they complain because it's a budget laptop?

Seems to me that this would be acceptable, unless I am misunderstanding something.

Trainass said:

So... let me get this straight.

Costumers paid for a (back in the day) $1000 laptop.

And now they get a replacement laptop WHICH EXCEEDS or has nearly equal specs to the 3-year-old laptops. And they complain because it's a budget laptop?

Seems to me that this would be acceptable, unless I am misunderstanding something.

If you bought a car worth $30,000 and had all the bells and whistles at the time, but it had some major issues. Took a class action suit to issue a full recall of the car and the manufacturer was to replace it w/another vehicle. 5yrs had passed and the 30k value of your car was now down to 15k so the manufacturer gave you a 15k car (aka a base model with little options). How would you feel? Sure its brand new, has a new warranty and prob. gets better mileage than the previous one. Heck, it may even be safer. But you paid $30k for the original car. Fair trade?

red1776 red1776, Omnipotent Ruler of the Universe, said:

If you bought a car worth $30,000 and had all the bells and whistles at the time, but it had some major issues. Took a class action suit to issue a full recall of the car and the manufacturer was to replace it w/another vehicle. 5yrs had passed and the 30k value of your car was now down to 15k so the manufacturer gave you a 15k car (aka a base model with little options). How would you feel? Sure its brand new, has a new warranty and prob. gets better mileage than the previous one. Heck, it may even be safer. But you paid $30k for the original car. Fair trade?

Hmmm not only that, but I wonder if the Attorneys got paid in 2008 dollars.

Staff
Matthew Matthew, TechSpot Staff, said:

You have to figure that some of the customers bought a high-end machine to serve a specific function at the time -- let's say gaming for example. Their original machines were defective and presumably unusable during the lawsuit.

They finally get a replacement (be that a working GPU or new low-end machine), but the performance is now dated and unsuitable for the initial purpose. A three-year-old notebook would struggle with many modern PC games.

In other words, they just waited three years to get an obsolete PC that they paid full price for. That doesn't sound very fair to me. I'm sure some affected customers are satisfied, but I can see why others are pissed. I would be too.

*Edit*

Trainass beat me to an explanation.

Guest said:

Ah, now I understand the issue here. The issue is really that the systems should have been replaced from the start, instead of having wait for 3 years.

However, to be fair, even 3 years later, you can't expect your system to be replaced with a brand new top-of-the-line system. You purchased a product, and seeing as it was defect, it should be repaired or switched out to a brand new system of the same model.

Although, I do think it would have been fair for the users to have been compensated in some way to compensate for the time they had been unable to use their system.

Jurassic4096 said:

The best part is that the replacement laptop has AMD/ATi graphics!

Wagan8r Wagan8r said:

@Matthew

I can see your point of view that the customers got shafted, but I can't disagree with the ruling. Those represented by the class-action suit filed for and won, as you say, "a replacement computer of like or similar kind and equal or similar value ". Simply because time has devalued their investment does not mean that they didn't get what they paid for. The replacement is equal to or better than the product they initially bought. Is it unfortunate? Yes. Is it unfair? No. If the customers had issues with their original computers, they should should have had them replaced by HP, with HP settling with NVIDIA separately.

Edit: Guest beat me. :P

Jurassic4096 said:

Were they really unable to use the laptop at all though? Because if it was not usable at all, then why would you hold onto said laptop for 3 years waiting on the outcome of a lawsuit? If you did get use out of it, then how the FACK do you think that doesn't affect the value 3 years later? Too much suing going on in the good ol U S of A. I also agree with the settlement.

Win7Dev said:

What a lot of you don't understand is this. pretend you bought a laptop three years ago and it was defective. It cost you $1000 then. They then leave you high and dry for three years and then give you a laptop worth ~$300 that is not at the same area of the spectrum that you paid for. You lost $700 and had no laptop for three years.

red1776 red1776, Omnipotent Ruler of the Universe, said:

wait a minute!

Electronics changes and has gotten cheaper over the last three years, the capability per dollar has changed etc, etc. The only thing in this that has remained steady is that these folks shelled out $1000.00 in 2008. (which is now worth about $1100) approx. no matter how electronics has evolved, these guys shelled out $1000 for the product. why don't they deserve $1000 worth of product back? I mean why should Nvidia pocket all of the difference in the evolution of the product. They (and the 'distributors' of the laptops got paid $1000 originally. Now only have to return $300 to the customers that got the defective product??...why is that? fine give them the $300 laptop...and $700 cash.

cliffordcooley cliffordcooley, TechSpot Paladin, said:

It's not the customers fault it took the courts three years to come to a verdict. Depreciation should not have been a variable in the replacement value. However if the merchandise was defective, the customer should not have waited for an outcome in the case.

Mikymjr Mikymjr said:

@ Jurassic4096 They probably kept their laptop or desktop, because in most cases you need the evidence to prove yourself right. I was in a car crash and in my country my car should be replaced by a new one (total los). This is because my car has a build year of 2007 and you can't shave of what the car is worth in a time of 5 years by law. So the insurance company of the other guy his car, had to pay all the money, that the guy his car was insured for. Now dig this; My car costs 11500$ and the insurance company could only come up with 4400$ because the guy couldn't pay for better insurance (and yes it sucks; I get to sell my car for a junkyard). Now the only thing i can do is sue that ***** who drove without a drivers license, for that extra money to buy me a whole new car of the same amount of cash it cost me. In order to do that i have to keep my car and photos of it for evidence. And my cars counter on devaluation has stopped the moment that ***** hit me. I paid hard earned money for that car. Not to mention the inconvenience i am going through (i'm stuck driving my race scooter by day; it has no electrical system for light, because of the rpm range i'm using it might melt away the charging system =p)

Mikymjr Mikymjr said:

yes i geuss i couldn't control my emotions. Thanks

gwailo247, TechSpot Chancellor, said:

mikymjr said:

@ Jurassic4096 They probably kept their laptop or desktop, because in most cases you need the evidence to prove yourself right. I was in a car crash and in my country my car should be replaced by a new one (total los). This is because my car has a build year of 2007 and you can't shave of what the car is worth in a time of 5 years by law. So the insurance company of the other guy his car, had to pay all the money, that the guy his car was insured for. Now dig this; My car costs 11500$ and the insurance company could only come up with 4400$ because the guy couldn't pay for better insurance (and yes it sucks; I get to sell my car for a junkyard). Now the only thing i can do is sue that ***** who drove without a drivers license, for that extra money to buy me a whole new car of the same amount of cash it cost me. In order to do that i have to keep my car and photos of it for evidence. And my cars counter on devaluation has stopped the moment that ***** hit me. I paid hard earned money for that car. Not to mention the inconvenience i am going through (i'm stuck driving my race scooter by day; it has no electrical system for light, because of the rpm range i'm using it might melt away the charging system =p)

What country was this in?

Mikymjr Mikymjr said:

Surinam a.k.a. SU =D

gwailo247, TechSpot Chancellor, said:

My knowledge of Surinamese law is nonexistent. =)

All I speak for is American law, and the difference is between 1st and 3rd party claims. If you insure your car with your insurance company, they are obligated to pay you the fair market value. The other person has liability insurance, up to a certain cap, and if your car is worth more than that, they only pay up to the amount of insurance that the person bought. So your choice is to get what you can from the insurance company, or forgo their settlement and sue the person for the full value of your car. But if that person has no money, you're usually better off getting whatever you can from the insurance company rather than nothing from the broke-*** person who hit your car. So if your car is worth relatively a lot of money, you're better off insuring it yourself, rather than relying on someone else's insurance. I would expect that your situation is somewhat similar.

And that fittingly is my 1000th post, about a subject I abjectly hate.

Mikymjr Mikymjr said:

Lol didn't know it was your 1000th post. You still reached it though. Yep that pretty much sums it up. I can go and sue the guy but your right; the saying here goes " Je kan geen veren plukken van een kale kip". It means in english "you can't pick feathers of, of a featherless chicken =p. I can still try, but i guess in the end my new nissan will have to wait until i get money back together again. It hurts to see a perfectly good car go to waist by some random mindless driver

red1776 red1776, Omnipotent Ruler of the Universe, said:

It's not the customers fault it took the courts three years to come to a verdict. Depreciation should not have been a variable in the replacement value. However if the merchandise was defective, the customer should not have waited for an outcome in the case.

Unless they received a "class action" letter telling them to 'sit tight' or this is the only way they have to be compensated.

Guest said:

I'll never buy Nvidia again. plain and simple. It's abundantly obvious that they have the moral and ethical values of the worst kind, ( non existent). Way to Go Nvidia, I'm sure this will garner you allot more customers, morons.

Guest said:

Not mentioned in the article is the fact that the lawyers walked away with $13,000,000 - yes, thirteen million dollars - while is was estimated that the value of the settlement to the class wouldn't exceed ten million. While lawyers typically argue for fees they state at maybe 30% of the value of the settlement, in this case they received about 130% !!

Guest said:

I guess if the attorneys' fees are tied to the amount of compensation to the class, they would probably have worked harder for the plantiffs. Tort reform, anyone?

gwailo247, TechSpot Chancellor, said:

mikymjr said:

Lol didn't know it was your 1000th post. You still reached it though. Yep that pretty much sums it up. I can go and sue the guy but your right; the saying here goes " Je kan geen veren plukken van een kale kip". It means in english "you can't pick feathers of, of a featherless chicken =p. I can still try, but i guess in the end my new nissan will have to wait until i get money back together again. It hurts to see a perfectly good car go to waist by some random mindless driver

LOL, yep, can't get blood out of a stone. But although it seems like little consolation, any crash you can walk away from is a good one in the big picture.

danteoz said:

I was given one of the defective HP laptops, when it was bought my buddy paid nearly $1500 for it. The affected GPUs didn't just get put into $1000 machine here guys. His laptop was very nice when he bought it, it was gotten to play games on. 512MB graphics memory and a dual core processor, 17" screen and they want to compensate him with something with integrated graphics and a low wattage single core processor that's junk and couldn't even play most games from a year ago let alone anything new and its a smaller screen....he had issues with the WiFi not working random crashes and restarts, finally gave up on it last year and gave it to me since neither best buy or hp would fix any problems with it ( out of warranty) without costing half of a new one.

NeoFryBoy said:

Wow, so they're out the full cost of the original laptop ($1000), if you assume they had to buy a second one to use over the defective product.

Guest said:

Most of you don't understand the real issue here. Some of the people originally purchased a low end laptop and is getting it replaced with such. In my case, and many others, I purchased a TX1410 with a swivel touch screen, dual core processor with all the connections and ports I wanted. Here is what my original TX has that the replacement does not have: Touch screen, dual core processor, card reader, finger print scanner, web cam, port replicator connection, IR remote control, and a few other things I am sure I overlooked. So the bottom line here is not the depreciation in $$ value, but the fact the replacement doesn't even have half of the performance or connections I originally paid for. I can handle the $$ depreciation, if it only had half the things my original had. Heck, my 3 year old TX with failed wireless still benchmarks almost twice as fast as what the new replacement does. How is this even close to fair? No matter if you bought a $400 budget machine, or a $2000 entertainment laptop, we are all getting the same CQ56 as a replacement....

Guest said:

My brother just sent me this article and I'm sure glad he did.

I am one of the class action members and have been wondering what the hold up with my replacement laptop has been. I sent my HP 17'' dv9310US back to them in early February and still have not received my replacement. It states on the documentation to "please be patient" and a replacement will arrive in 7-10 weeks. Well it's been over 12 weeks now and still no replacement!

I just want the damn thing so I can sell the piece of crap and recoup hopefully $200. I had to personally fix the HP I had and luckily found a fix on YouTube (since the problem was so widespread). I remember calling HP and telling them I had no screen whatsoever when I fired up my laptop (just all black, no graphics at all..... BTW thanks Nvidia!). Since I was "out of warranty", HP went into their usual spew about it costing damn near $275 for a new motherboard........ yeah right!

Well long story short, I fixed the problem for all of $25..... which included a micro torch ($12), a piece of copper sheeting ($8), and a butane filler for the torch ($3). I disassembled the laptop myself and reheated the GPU, upon which I installed new solder paste and a 2''x2'' copper shroud. Threw it back together and it was fixed. Lasted a good 1.5 years until I purchased my next laptop........... which is now a Macbook Pro 17'' (something I swore I'd never own). I now understand why MBP's are so highly touted, I've had it a good month and have yet to have any stress at all, like I did with my HP machines. I do run Windows 7 on my MBP and love the dual functionality when needed.

So am I happy to be receiving a 15'' POS(Piece of $!*!) Compaq? Well no, since I had a 17''.

But am I happy to be getting something of perceived value? Damn right.

I'll sell this thing on eBay/Craigslist/etc and throw the money in the bank.

Guest said:

You are misunderstanding. Most systems that failed were high-end laptops with dual-core processors, optical drives, Bluetooth, Wi-Fi, Firewire ports, etc. The Tx1000 that died on me was a convertable touchscreen tablet with an AMD dual-core, DVD burner, biometric security, Wi-Fi, Bluetooth, increased memory, etc. The 'like kind and value' replacement I'm receiving is an Asus EEE Netbook, no optical drive, no bluetooth, no biometrics and Windows 7 Starter. Or I have the option of choosing the Compaq CQ56. Neither one comes close to replacing what I had.

Judge Ware, Jon Peddie and Dr. Nader Bagherzadeh were the best things NVIDIA's money could buy. They saved NVIDIA a fortune.

Jurassic4096 said:

danteoz said:

I was given one of the defective HP laptops, when it was bought my buddy paid nearly $1500 for it. The affected GPUs didn't just get put into $1000 machine here guys. His laptop was very nice when he bought it, it was gotten to play games on. 512MB graphics memory and a dual core processor, 17" screen and they want to compensate him with something with integrated graphics and a low wattage single core processor that's junk and couldn't even play most games from a year ago let alone anything new and its a smaller screen....he had issues with the WiFi not working random crashes and restarts, finally gave up on it last year and gave it to me since neither best buy or hp would fix any problems with it ( out of warranty) without costing half of a new one.

So it survived until the warranty was out? Then it's confirmed, anyone expecting anything near the $1000 they paid are high on crack. Judge Judy would laugh in anyones face if they came to her court with this bullcaca. I miss her :(

MilwaukeeMike said:

Sounds like Nvidia was a bit cheap in the replacements, but basing your compensation on today's replacement cost is how it works everywhere.

Think of gas prices... if gas is $3/gallon and the station down the street buys 500 gallons they will always sell that gas at it's current price. If gas goes up to $4/gal they don't raise their prices after their current stock is out, they do it right away. Same if it goes down. It's always based on the current 'replacement' cost. Never what you purchased it at. If that were true, then you'd have to have kept your receipt to prove you didn't pay $5000 for that PC.

Nvidia should have replaced the computers with current exact matching spec computers, and if they're not d-bags, they should throw in something to make up for the lost time of having a defective one. But that's up to them, and not required.

gwailo247, TechSpot Chancellor, said:

Judge Ware, Jon Peddie and Dr. Nader Bagherzadeh were the best things NVIDIA's money could buy. They saved NVIDIA a fortune.

You forget that YOUR class action lawyers approved this settlement.

Did they get paid their 13 million in laptops? Probably not.

This is why a class action lawsuit was stupid and from the get go you should not have expected to get anything worthwhile for it.

Once the settlement amount was agreed upon, YOUR lawyers stopped caring how exactly your share of the settlement was going to get disbursed. Laptops, cash, gift cards, cattle, who cares?

nickblame said:

I bought an asus G1 for 1799euros in 2007 and 2,5 years after the gpu died which is embedded.. My laptop was not included in those with the settlement but I do believe that it had the same flaw... talk about frustration..

nickblame said:

btw I'll never buy costly hardware ever.. I'll always stick to low end 300euros and so on.. and I do choose AMD/Ati from then on.. nvidia sucked those years.

Guest said:

We got the shaft alright and with no KY ..

CamaroMullet said:

Oh Nvidia, what happened to "the customers always right" ? I find it shameful that they would spend so much time and energy not to satisfy their customers. Did they not have the $$$ to fix the problem in the beginning? I guess it is just, " it's in the game " after all. Can you imagine when the first sandybridge products, the ones with the sata issues, if Intel instead of jumping on it right away and fixing the issue, they went to court with it's suppliers/customers instead??!! I'll stick with AMD gpu's from now on.

Guest said:

Best comment i've seen in a looooooong time!

Guest said:

The problem is that the CQ-56 is not "superior": the benchmarks are half the speed of the computers they're replacing, which isn't surprising since it's a single-core processor replacing a dual-core processor laptop with a larger screen. NVIDIA got Jon Peddie to lie and say it was superior (contradicting everything he says in his blog and the press), and the judge believed them.

Guest said:

I think hp is main a**h*** here.... They have found a work around to save their ****.... Just like they they did in inkjet printer case, giving a 6$ lollipop to innocent customers for robbing them for supplies... My tx10xx got repaired! why not others...!? Judge is an ***** who probably didnt knew abc of hardware for sure. Probably blood sucking lairs...i mean lawyers! got their pockets full by now to hunt new law abiding fools like you and me..... :( Btw BGA reball rework station costs 100$ something & 15 min to replace a 70~80$ chip!! People should have asked for that instead :O

Staff
Per Hansson Per Hansson, TS Server Guru, said:

I bought an asus G1 for 1799euros in 2007 and 2,5 years after the gpu died which is embedded.. My laptop was not included in those with the settlement but I do believe that it had the same flaw... talk about frustration..

If you bought it for Euros then it's not covered by this class action suit.

It only covers US customers...

I know I have a Dell M1710 with defective nVidia 7950GTX, I replaced it myself with a ATI X1400

It's waaaay slower but atleast designed properly so it will last!

Guest said:

Yes, this sucks, but there are a lot of people that will not get the replacement computer, because they were never notified of the claim period. Not that really sucks.

QuaZulu QuaZulu said:

"The settlement reads, '? a replacement computer of like or similar kind and equal or similar value...'"

I guess that's the rub...and I would guess the wiggle room for another lawsuit. Similar kind and similar value are no longer equivalent. nVidia may claim that they have given their customers something similar in kind to what they had bought (similar specs) while customers are arguing for similar value (if I paid $1000 then I want what $1000 would get me on the market now).

If I paid $1000 for something I'd want to use it while it's worth $1000. Sloppy lawyers! Shame on nVidia!

Guest said:

I had one of the latest IBM Thinkpad Laptops (T40p), before they sold that division to Lenovo. I had several problems with my laptop and ended up sending it at least two times for repair. On the third time, I extracted a paragraph from my warranty policy. It read that after a third service I could ask for a replacement computer which was equivalent to what I paid in the day.

Now for the good part. Lenovo was going to fix me up for a defective IBM computer. Of course they had to respect the warranty policy. A guy from sales sent me three models T6X to choose from. None of them had the FireGL graphics type of card. I explained this to the sales manager and argued that back in the day of the original purchase, I chose a laptop to use it as a workstation replacement. Due to Lenovo's laptop configuration, no budget laptop had a FireGL card, so he sent me another option which was valued at least $1000 more than the three options I had before.

I ended up with a laptop with the latest FireGL V5200 card; a Thinkpad T60p with the latest specs of the time. Too bad that a couple of months later intel released the C2D (If I had waited a bit more :( ). Anyway, the point of all this is that Lenovo's replacement practices were solid at that time (2003-4). I still use that laptop and it performs outstandingly well. Imagine if they had given me a budget laptop back then.

I wouldn't hesitate to buy a Lenovo computer again. Consider a Dell, as I remember they had good warranty policies.... but never an HP

RaiDeR55 said:

Need GAP insurance like they have for Cars..But need for Computer's etc..But they didnt go right IMO.Depends how you look at it.You got a dead LT and now you got a working one..But lost money in the deal.which isnt good.

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