Last Tuesday, Valve was in court defending itself against Ironburg Inventions, the IP holding branch of custom controller maker SCUF. Ironburg accused Valve of stealing their invention for rear-side control surfaces that are used on their controllers (and also on the Xbox Elite Series 2 Controller, which Microsoft had a license for).
Valve denied the accusation and pleaded not guilty to patenting infringement. The trial lasted a week, and yesterday a verdict was provided by the eight-person jury. Valve was guilty of patent infringement and ordered to pay $4 million.
"Valve's intentional disregard of its infringement is at the heart of this case," Ironburg lawyer Manatt Phelps argued. "Valve did know that its conduct involved an unreasonable risk of infringement, but it simply proceeded to infringe anyway--the classic David and Goliath story: Goliath does what Goliath wants to do."
Valve countered by mailing each of the jurors their own Steam Controller and asking them to spot the similarities in the design, believing that the overall differences between the Steam Controller's paddles and the sort you find on SCUF's controllers would be too dissimilar to convict. Valve was wrong, and now they've gotta pay up.
That said, $4 million is actually on the lower end of the damages scale. According to Law.com, Ironburg had initially been seeking $11 million in damages, but the judge reduced their claim to $6 million to be more in line with the price of Microsoft's licensing deal for the Elite Series 2. When the jury unanimously found in favor of Ironburg, that number was reduced to $4 million.
The low cost to Valve likely has to do with the Steam Controller's relatively low sales volume, which never topped 2 million units.
However, the verdict may complicate Valve's plans to offer a Steam Controller 2. Being found guilty of patent infringement means that Valve can't wilfully infringe on that patent again without paying far more in punitive damages, so any new version of the Steam Controller will likely not have rear-side paddles at all.
Source: Law.com, GamesIndustry.biz