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Basically, Sierra had agreed to distribute Valve games.
According Gamepolitics (which has a link to the court documents), the case revolves around licensing rights to games used in cyber-cafes.
The case, of course, is all about the money: on April 6th, a legal arbitration awarded Valve $2,391,932 for unpaid royalties. Valve sulked a little at the size of the award, but agreed to abide by the decision. Activision/Blizzard didn't just sulk, it refused to pay, stating that Valve had been overpaid by $424,136 in the past.
Instead, Activision/Blizzard sent Valve the sum of $1,967,796 (that's the first figure minus the second figure). It also pointed out that if Valve sued, it would counter-sue.
Valve has sued.
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