What you need to know
- A Delaware jury sided with Qualcomm this week, finding Arm guilty of breaching a licensing agreement and “interfering” with business relations.
- Qualcomm was awarded $1 in damages for each offense, but the shouting will continue: the companies will likely find themselves in court over royalty payments.
- This started over Qualcomm’s allegations that Arm “violated its contract” after its 2021 acquisition of Nuvia.
Qualcomm’s court case with Arm was settled this week, and the former came out the victor … in a way.
Reuters reported this week that a recent court case between Qualcomm and Arm over an alleged licensing breach has been settled. A Delaware jury found Arm guilty of the breach and of “interfering” with Qualcomm’s business relationships, and as a result, Qualcomm was awarded $2 in damages — $1 for each offense.
While the jury officially sided with Qualcomm, Arm saw it differently. In a statement, the company said “the jury’s verdict confirms that Arm operated in good faith under its technology license agreement and its award of only two dollars confirms the merit of Arm’s arguments in the case.”
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This likely won’t be the end of Qualcomm and Arm’s court dates. According to Reuters, Qualcomm has more to bring up, which it will likely do in court with Judge Maryellen Noreika. Since Arm neglected its responsibilities of providing the necessary tools for its chips, Judge Noreika could rule that Qualcomm can “stop paying royalties to Arm for five years.” This is something Qualcomm has been after since this dispute began.
So far, Arm is against such a ruling. It remains to be seen what will happen.
Qualcomm’s allegations
Qualcomm and Arm’s court case began in early October. The former wants to freeze royalty payments for up to five years, a ruling Judge Noreika will have to decide in the future. But it all started after Qualcomm’s 2021 acquisition of the chip startup Nuvia. As stated before, Qualcomm alleged Arm “violated its contract” by withholding its chip-testing tools.
Beyond this were Qualcomm’s business relationships. The company claimed Arm “leaked its threat to end a key license in 2024.” This reportedly hurt Qualcomm’s potential chip deal with Meta that year. Qualcomm said this leak dropped $170 million off its deal with Meta. Arm denied that it was linked to any of this. Instead, Meta’s change of heart from VR headsets to AI glasses was the real reason, the company claimed.
There’s still a concern that the fallout of these cases could impact future phone prices. Price negotiations and control over CPU technology could be hit the hardest.