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The Practicalities And Pitfalls Of The Smallest Saleable Patent Practicing Unit Doctrine: A Review Of Teece And Sherry

By Anne Layne-Farrar

In early 2016, David Teece and Edward Sherry released a new paper assessing the economics of the “Smallest Saleable Patent Practicing Unit” (SSPPU) doctrine.1 The doctrine was first espoused in 2009 by Judge Randall Rader in Cornell v. Hewlett Packard.2 In the simplest terms, the SSPPU doctrine calls for setting the revenue base for reasonable royalty patent infringement damages at the smallest possible product level that still reflects the patented invention. For example, if patented feature A is sold in two products, ABCDE and ABC, then product ABC (not including features D and E) would likely form the SSPPU (it is a rare instance that product A would be sold on a standalone basis).

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