Valve wins partial summary judgment against Rothschild in patent troll case
U.S. District Judge Jamal N. Whitehead ruled on January 29 that patent holder Leigh Rothschild breached a 2016 settlement agreement by asserting infringement claims against Valve Corporation in 2022. The partial summary judgment advances Valve's bad-faith enforcement claims under Washington's Patent Troll Protection Act toward a jury trial in February.
The 2016 Global Settlement and License Agreement was supposed to end the dispute. Valve paid for a broad, perpetual license covering U.S. Patent No. 8,856,221 and related cloud-based media systems patents. The settlement resolved a 2015 Texas lawsuit brought by Rothschild's Display Technologies LLC.
By 2023, Valve was back in court, this time as plaintiff. New licensing demands came from Patent Asset Management LLC and other Rothschild entities. Valve alleged these were shell companies designed to circumvent the 2016 agreement. According to court filings, Rothschild has been linked to hundreds of patent assertions across the gaming and tech sectors.
The case took an unusual turn when Valve accused Rothschild's legal team of submitting fabricated legal citations in court documents. The company claims AI-generated quotes and non-existent precedents were inserted to block Valve's expert evidence. One cited ruling simply didn't exist in any court records.
Valve isn't just seeking to stop the licensing demands. The company is attempting to pierce the corporate veil and hold Rothschild personally liable under Washington's PTPA, which enables private Consumer Protection Act claims against abusive patent assertions. Defendants dropped their infringement counterclaim after discovery.
The judge's ruling leaves key questions for the jury: whether Rothschild's conduct meets the PTPA's bad-faith standard and whether personal liability applies. The defendants' motions for summary judgment on PTPA claims failed. Courts have affirmed Valve's broad discovery into Rothschild's corporate structures.
What matters here: This case tests whether Washington's anti-troll statute can reach individuals who operate through multiple corporate entities. If Valve succeeds in establishing personal liability, it creates a precedent that shell companies won't shield patent assertion entities from consequences. Smaller companies watching this case closely face similar pressure tactics but lack Valve's resources to fight back.
The jury trial begins next month.