Qualcomm’s central processors, developed using Nuvia technology, are properly licensed under its agreement with Arm Holdings, a U.S. federal court jury determined. However, the trial ended in a partial mistrial, leaving unresolved questions about licensing terms and paving the way for further legal battles between the two chipmakers.
Mixed Verdict in High-Stakes Trial
After a week of courtroom arguments and more than nine hours of deliberations, the eight-person jury failed to unanimously decide whether startup Nuvia breached its license agreement with Arm. This unresolved question resulted in a mistrial on that specific issue, with Judge Maryellen Noreika urging both parties to mediate their differences.
Despite the mistrial, the jury ruled that Qualcomm did not breach its agreement with Arm, affirming that the chips Qualcomm developed using Nuvia’s technology are properly licensed. This decision allows Qualcomm to continue its push into the personal computer market with its “AI PC” chips, which are designed to handle tasks like chatbots and image generation.
Qualcomm, which acquired Nuvia for $1.4 billion in 2021, welcomed the verdict. “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,” the company stated.
Arm, however, expressed disappointment over the lack of resolution regarding its claims and vowed to seek a new trial. The company’s spokesperson emphasized that protecting its intellectual property remains a priority.
Implications for the Chip Industry
The trial’s outcome has significant implications for the tech industry. Qualcomm’s ability to use Nuvia’s custom core designs without additional royalties stabilizes its roadmap for developing advanced processors. Analysts like Stacy Rasgon from Bernstein noted that the decision mitigates risks to Qualcomm’s future in the PC market.
However, the dispute leaves lingering questions about the boundaries of Arm’s technology licensing agreements. Arm licenses its computing architecture to companies while also offering off-the-shelf designs for computing cores. Advanced customers like Apple, Qualcomm, and Nuvia license the architecture to develop custom cores. Arm’s attorneys argued during the trial that Nuvia’s architecture license granted Arm the right to demand the destruction of its custom core designs, a claim Qualcomm refuted.
“This case has ramifications for the entire industry,” said Jim McGregor of Tirias Research. “Whether you’re using a standard Arm core or developing a custom one, this issue impacts technologies from electric toothbrushes to satellites.”
Industry Competition and Future Challenges
The verdict bolsters Qualcomm’s ability to compete with Nvidia, AMD, and MediaTek in developing Arm-based processors for laptops. Qualcomm’s expansion into this market aligns with its vision of creating AI-driven chips for next-generation personal computers.
For Arm, the trial underscores the complexities of enforcing its licensing terms as more companies leverage its architecture for custom innovations. According to Ben Bajarin, CEO of Creative Strategies, Arm’s financial outlook does not depend heavily on securing higher royalty rates from Qualcomm, but the contractual dispute remains significant for the company’s market positioning.
The case, Arm Holdings v. Qualcomm, could set critical precedents in how chipmakers negotiate licensing agreements and manage intellectual property in an industry increasingly reliant on custom designs.
