Right, and it is such a shame because I know Doug Rogers from the Autodesk® FBX® forums where he helped me with a lot of issues when I was learning the Autodesk® FBX® SDK.
However I don’t believe he was suing Valve. He was suing one guy who works at Valve and happens to maintain crunch on the side.
And yes the method described here for further compressing DXT blocks sounds basically like his method. At the very least the wording of his patent will definitely encompass this algorithm. It was probably not in your plans anyway but keep in mind you won’t be able to sell it or he will come for you and your first-born.