A federal jury in Delaware ruled on Friday that Qualcomm did not violate its agreement with Arm in the 2021 acquisition of Nuvia, a startup founded by three former Apple engineers. The verdict concludes a two-year legal dispute in which Qualcomm was accused of improperly utilizing chip designs that Arm had previously licensed to Nuvia before the acquisition. The outcome, first reported by Bloomberg and Reuters, represents a significant legal win for Qualcomm.
However, the jury did not reach a verdict on whether Nuvia itself breached its agreement with Arm, leaving that aspect of the case unresolved and potentially open for a retrial. “I don’t think either side had a clear victory or would have had a clear victory if this case is tried again,” remarked U.S. District Court Judge Maryellen Noreika, according to Reuters.
Qualcomm acquired Nuvia in 2021 for $1.4 billion, aiming to enhance its portfolio of next-generation chips, such as the Snapdragon X series used in current Copilot Plus laptops. Evidence presented during the trial suggested an additional motive for the acquisition: Qualcomm’s internal projections indicated the company could save up to $1.4 billion annually in payments to Arm.
The legal battle began in 2022 when Arm initiated proceedings against Qualcomm, claiming that Qualcomm had continued to pay its existing royalty fees to Arm after the Nuvia acquisition—fees Arm alleged were significantly lower than those previously paid by Nuvia. Arm argued that the licensing agreements Nuvia held for its designs became invalid following the acquisition and insisted that Qualcomm should destroy any technology derived from those designs after the failed negotiations between the two companies.
While Arm CEO Rene Haas refrained from discussing specific details of the trial during a recent appearance on Decoder, he reiterated the reasons behind Arm’s legal claims. “The principles as to why we filed the claim are unchanged,” Haas stated.
The jury ultimately ruled in favor of Qualcomm after reviewing Arm’s internal documents, which estimated the company could have lost $50 million in revenue due to the Nuvia acquisition. Additionally, Nuvia co-founder Gerard Williams testified during the trial, asserting that Nuvia’s finished technology relied on “one percent or less” of Arm’s technology, according to Reuters.
Qualcomm celebrated the decision as a validation of its right to innovate. “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,” Ann Chaplin, Qualcomm’s general counsel and corporate secretary, said in a statement emailed to The Verge. “We will continue to develop performance-leading, world-class products that benefit consumers worldwide, with our incredible Oryon ARM-compliant custom CPUs.”
Despite the partial resolution in Qualcomm’s favor, the case leaves lingering questions about the scope of the agreements and licensing terms involved in the Nuvia acquisition. While the jury determined Qualcomm itself did not breach its contract with Arm, the possibility of a retrial on Nuvia’s actions keeps the broader conflict between the two companies alive.
Qualcomm’s acquisition of Nuvia was seen as a strategic move to strengthen its position in the competitive semiconductor market, especially in developing custom CPUs and other advanced technologies. With the Snapdragon X lineup already showcasing the fruits of this investment, the company appears committed to pushing boundaries in chip innovation. However, the ongoing tension with Arm underscores the challenges inherent in navigating licensing agreements and intellectual property in the tech industry.
The case also highlights broader issues regarding licensing practices and the implications of mergers and acquisitions in the semiconductor sector. As companies like Qualcomm and Arm compete to secure their positions in a rapidly evolving market, disputes over intellectual property and contract terms are likely to remain a contentious area.
For now, Qualcomm’s legal team and leadership are focusing on the positives from the jury’s decision, emphasizing the protection of its contract rights and its commitment to delivering cutting-edge technologies. Meanwhile, Arm, despite losing this round, has signaled that its broader concerns about licensing and contract enforcement remain a priority, leaving room for further developments in this high-stakes legal saga.