Valve wins lawsuit against Rothschild and associated entities, with a jury agreeing they violated an anti-patent troll protection act
Earlier this week, the district court of the Western District of Washington favoured Valve Corporation in its 2023 lawsuit against Leigh Rothschild and his associated companies, on all counts, including breach of contract and the violation of Washington's Patent Troll Prevention and Consumer Protection Acts.
Rothschild is an inventor with a huge array of patents to his name, granted and pended, covering an extremely broad range of fields. He also owns or leads a host of companies that manage the business side of patents. In this particular legal case, Valve alleged that Rothschild himself, Rothschild Broadcast Distribution Systems LLC, Display Technologies LLC, Patent Asset Management LLC, Meyler Legal LLC, and Samuel Meyler were guilty of "bad-faith assertions of patent infringement", amongst other things.
The patent in question is US8856221B2, a 'system and method for storing broadcast content in a cloud-based computing environment'. Rothschild Broadcast Distribution Systems (RBDS) owns the rights to that patent, and in 2016, Valve obtained a "perpetual, irrevocable, royalty-free, fully paid-up, worldwide license" for it and others in Rothschild's portfolio.
However, in 2022, Display Technologies (DT) sued Valve for infringement of one patent covered in that agreement, and then in 2023, Valve received another claim from Rothschild's lawyers, this time concerning US8856221B2. Obviously, Valve's legal team decided enough was enough and filed a lawsuit in return.
What makes this particular case of note is that Valve didn't just go after one company, but several of Rothschild's companies, plus the inventor himself, as well as his lawyer. After several years of slow progress, the lawsuit has now concluded with the jury giving the nod to Valve over every dispute and claim.
For example, the court deemed that Rothschild and TD had breached the 2016 license agreement in 2022, and that Rothschild and RBDS did not have "a just excuse for their absolute repudiation of their obligations" of that agreement, in the 2023 letter to Valve.
Perhaps most importantly of all, though, is that the court declared that Leigh Rothschild and his associated entities listed in the lawsuit had all violated the Washington Patent Troll Prevention and Consumer Protection Acts.
By claiming that Rothschild's entities are effectively his "alter egos" in its lawsuit, Valve is arguably using a tactic to make Rothschild himself personally liable, rather than any associated company that he founded, owns, or leads. This move could be key for other businesses hoping to combat the problem of 'patent trolls'.
Without going into a lengthy discussion about that particular topic, patent trolls are considered to be individuals or companies that own the rights to patents, but never use them for any product or service. Instead, they make money through litigation, suing other companies with claims of patent infringement, sometimes through the use of 'shell' companies rather than themselves.
Valve's success against Leigh Rothschild could well result in a host of other cases being filed in Washington because of that state's Patent Troll Prevention Act. Whatever does happen, though, you can be sure that many tech companies will be just as pleased as Valve is by the result of this lawsuit.