Qualcomm has successfully defended itself in a trial against Arm Holdings regarding a claim that it violated a licensing agreement. The dispute arose after Qualcomm’s 2021 acquisition of Nuvia, a startup, for $1.4 billion. Arm alleged that Qualcomm improperly used Nuvia’s chip technology without paying a higher licensing fee.
However, a federal jury in Delaware concluded on Friday that Qualcomm did not breach the terms of its agreement with Arm. The jury also could not decide if Nuvia had violated the license, leaving that issue open for a potential retrial.
Background of the Dispute
Arm, a leading chip design company based in the UK and majority-owned by Japan’s SoftBank, claimed that the acquisition of Nuvia should have triggered a renegotiation of the licensing terms.
Arm argued that Qualcomm, relying on Nuvia’s technology to enhance its entry into the computer processor market, should have destroyed any designs obtained from Nuvia. Qualcomm, however, maintained that it had a separate license agreement with Arm, which covered its use of Arm’s technology in its products.
The Jury’s Verdict
The jury ruled in favor of Qualcomm, affirming that all the products in question were covered by Qualcomm’s agreement with Arm.
According to a report by The Verge, Qualcomm’s General Counsel, Ann Chaplin, commented, “The jury has vindicated Qualcomm’s right to innovate and affirmed that all the Qualcomm products at issue in the case are protected by Qualcomm’s contract with ARM.”
Despite this win, the jury could not resolve whether Nuvia had breached its agreement with Arm. This unresolved issue could result in additional legal actions.
Arm’s Response and Future Plans
Arm expressed disappointment with the jury’s inability to reach a consensus on all counts. “We are disappointed that the jury was unable to reach consensus across the claims” the company said in a statement, as reported by Bloomberg. Arm has indicated its intention to seek a retrial on the matter of whether Nuvia breached its license agreement.
Key Testimonies and Impact
The trial featured testimony from both companies’ CEOs. Qualcomm’s $1.4 billion purchase of Nuvia was viewed as a strategic effort to enhance its portfolio of next-generation chips, such as the Snapdragon X series.
Internal documents from Qualcomm revealed that the company anticipated saving up to $1.4 billion annually on payments to Arm through the Nuvia acquisition.
Arm’s internal documents suggested that the company could lose $50 million in revenue as a result of Qualcomm’s actions. Furthermore, Gerard Williams, co-founder of Nuvia, testified that the startup incorporated “one percent or less” of Arm’s technology in its final products.
Conclusion and Future Plans for Qualcomm
In light of the victory, Qualcomm reaffirmed its commitment to innovation.
We will continue to develop performance-leading, world-class products that benefit consumers worldwide.
The company stated, highlighting its work on custom ARM-compliant CPUs, including the Oryon processors.