Licensing dispute between Qualcomm and ARM now settled

A two-year legal dispute between American semiconductor developer Qualcomm and British semiconductor architect ARM Holdings has now been settled in court. According the ruling, Qualcomm may continue to use Nuvia technology in its Snapdragon chips, which comes as an important victory for Qualcomm. 

According to ARM, the licensing agreement should have been renegotiated

The catalyst was the acquisition of Nuvia by Qualcomm in 2021, which gave the Californian company access to powerful NUVIA technology that can be found in the Oryon cores. ARM had once issued a special license for the chip design for Nuvia and these licenses were transferred to Qualcomm via the takeover.

In this context, ARM was of the opinion that a new (and more expensive) licensing agreement had to be brokered and filed suit against Qualcomm. Over the years, out-of-court negotiations were repeatedly held, but these did not lead to any significant results.

Consequently, the case went to trial at the United States District Court in Wilmington, Delaware. On December 20, the court ruled that Qualcomm had not violated ARM's Architecture License Agreement (ALA) in its acquisition of NUVIA. Good arguments from Qualcomm contributed significantly to the verdict.

Why the court decided in favor of Qualcomm

Qualcomm's acquisition of Nuvia raised the question of whether its ALA also covered newer chips produced by Qualcomm. According to ARM, the issuing of a new ALA was required and the previous ALA was declared invalid.

Qualcomm countered and pointed out that the amount of ARM architecture in Nuvia's work is negligible, amounting to 1% or less, thus having equally negligible influence on Qualcomm's current chip designs. To illustrate this point further, Gerard Williams III, Senior Vice President of Engineering at Qualcomm, stated that chips such as the Snapdragon X series are engineered almost entirely to customer specifications.

In view of this argument, Qualcomm was of the opinion that ARM is only attempting to drive up the costs for Qualcomm with a new ALA. In order to fully convince the court, Qualcomm presented an internal document from ARM CEO René Haas according to which ARM was considering manufacturing its own processors in the future (ARM Holding does not currently manufacture its own processors, but merely brokers licenses).

If this were true, this would make ARM a direct competitor of Qualcomm. Although René Haas rejected the report, the court ruled that Qualcomm does not have to sign a new ALA with ARM. Only time will tell whether there is any truth to the rumors of ARM producing its own semiconductors.