Background
This is the closing chapter of a decade-long pattern of patent assertion against Valve Corporation, the developer of Steam, by inventor Leigh Rothschild and a constellation of LLCs that hold or have held the rights to his patents. In 2016, Valve and Display Technologies LLC (a Rothschild affiliate) signed a global settlement that gave Valve a perpetual, irrevocable, royalty-free, fully paid-up worldwide license to a defined set of patents, including continuations, divisionals, and related applications.
In 2022, a Rothschild-affiliated entity sued Valve again on patents that Valve and Rothschild’s counsel disputed were covered by the 2016 license. In July 2023, after another Rothschild affiliate sued Valve over U.S. Patent 8,856,221 — a patent for a system and method for storing broadcast content in a cloud computing environment, which Valve maintained had been licensed in 2016 — Valve filed the present action in the Western District of Washington. Valve sought (1) a declaratory judgment that the asserted patent was covered by the 2016 license, (2) damages for breach of contract, and (3) damages and treble damages under the Washington Patent Troll Prevention Act and the Washington Consumer Protection Act for the bad-faith assertion of patents Rothschild knew or should have known were licensed.
Earlier in the case the district court held — in a closely watched ruling — that the Washington Patent Troll Prevention Act creates a private right of action, allowing Valve to sue the bad-faith asserter directly. That made the present trial, on February 17, 2026, the first known jury trial in the United States in which an accused infringer pursued affirmative claims against a patent owner under a state anti-patent-troll statute.
The Jury’s Verdict
The jury sided with Valve on every claim Valve put to it. It found:
- Breach of the 2016 license agreement, awarding $130,000 in damages.
- A second breach of the same agreement, awarding nominal damages of $1.
- Violation of the Washington Patent Troll Prevention Act, awarding $7,364 in compensatory damages, which the court trebled to $22,092 under the Washington Consumer Protection Act’s enhanced-damages provision.
Total damages awarded: $152,093.
An advisory jury also found that asserted claim 7 of the ‘221 patent is invalid for obviousness — a separate finding the court will address in post-trial proceedings, since patent validity is ultimately a legal question for the judge on the basis of underlying factual findings.
The court’s minute order memorializes the verdict; the formal judgment, post-trial motions on damages calculation and attorneys’ fees, and any appeal are still ahead.
Key Takeaways
- State anti-troll statutes get their first jury test. More than a dozen states have enacted some form of anti-patent-troll legislation since 2014, but until this verdict, none of them had been put to a jury on a contested record. The plaintiffs’ bar, the IP defense bar, and the legal academy have all been waiting to see whether such statutes — many drafted hastily and laden with vague “bad faith” standards — would survive operational scrutiny in a real trial. Washington’s statute did.
- License-based defenses get teeth on offense. The same 2016 settlement that should have ended Valve’s exposure to Rothschild’s patents instead became the foundation of an affirmative damages award. Future settlements with NPEs may be drafted with explicit liquidated-damages or fee-shifting clauses for re-assertion, exactly the territory this verdict shows juries can quantify.
- Trebling under state UDAP statutes amplifies modest awards. The compensatory state-law portion was only $7,364, but the Washington Consumer Protection Act’s automatic trebling pushed it to $22,092. With the breach-of-contract damages, the total verdict is more than 20x the state-law compensatory award. Other state UDAP statutes have similar amplification mechanics.
- Advisory invalidity finding flags appellate exposure. The advisory jury’s obviousness finding on claim 7 of the ‘221 patent does not bind the district court but does foreshadow the substantive invalidity ruling Valve will likely seek in post-trial motions. If the court adopts the advisory finding, Rothschild loses both his ability to assert the patent and the only defense to a fee-shifting motion under § 285 or the state statute.
- Ramifications for serial-NPE litigation strategy. Rothschild is one of the most prolific named inventors in U.S. patent-troll history, with hundreds of filings under various LLC affiliates. The verdict opens a new defensive playbook: when an NPE sues on a patent the defendant believes is licensed under an earlier settlement, the defendant can now plausibly counter-attack on three fronts — breach of contract, bad-faith assertion, and consumer-protection treble damages — at least in jurisdictions that recognize a private right of action under their anti-troll statutes.
Why It Matters
For more than a decade the conventional wisdom has been that anti-patent-troll statutes were largely symbolic — vague enough to risk First Amendment objections under the Noerr-Pennington doctrine, hard to invoke in practice, and rarely tested in litigation. Valve v. Rothschild changes that. A jury, on a developed record, found that the assertion of a patent against a known licensee crossed the line from petitioning activity into actionable bad faith — and translated that finding into trebled damages. The verdict is small in absolute dollars; the precedent it establishes is not. NPE litigation in the dozen-plus states with anti-troll statutes will now be evaluated by both sides through a lens that includes counter-claim risk, not just attorney-fee exposure under § 285. For Valve specifically, this is also closure on a multi-year campaign of assertions — and a template for other large software and gaming defendants who routinely settle with prolific NPEs and then watch the same patents reappear under different LLC names.
Surfaced via Law360 IP coverage of “Valve’s Anti-Troll Law Win Could Open New Doors” (Feb. 23, 2026), with additional reporting from Bloomberg Law.
Full Opinion
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