Arm Limited, a Qualcomm heavyweight technology partner for years, accused the San Diego company of infringing chip architecture intellectual property licenses related to a new line of high-performance processors for laptops, digital cars, smartphones and even data center servers.
In a lawsuit filed Wednesday in federal court in Delaware, Arm is seeking the destruction of any chip technology related to the disputed licenses, along with injunctions and damages.
The legal explosion comes as Qualcomm prepares to ship samples of these faster, power-efficient chips to customers later this year. It’s an effort to catch up with Apple’s laptop and smartphone processors – or central processing units. Processors handle basic computing functions on smartphones, laptops, and other devices.
Upgraded processors are also a cornerstone of Qualcomm’s diversification strategy. The company aims to push high-performance computing in digital cockpits and advanced driver assistance systems in cars, next-generation laptops and personal computers, realistic virtual reality headsets and infrastructure advanced network.
In 2021, Qualcomm paid Nuvia $1.4 billion to jump-start its processor efforts. Founded by former chip designers Apple and Google, Nuvia has primarily worked on developing energy-efficient semiconductors for data centers.
It’s unclear whether this lawsuit will delay Qualcomm’s efforts to roll out these processors in the coming months.
In a statement, Arm said it made numerous “good faith” efforts to resolve the dispute before going to court.
“Qualcomm violated the terms of the Arm License Agreement by continuing development under the terminated licenses,” said Phil Hughes, vice president of external communications. “Arm had no choice but to bring this action against Qualcomm and Nuvia to protect our intellectual property, our business, and to ensure that customers can access valid Arm-based products.”
Qualcomm says it already has extended licenses with Arm that protect it from lawsuits.
“Arm’s lawsuit marks an unfortunate departure from his long and successful relationship with Qualcomm,” General Counsel Ann Chaplin said in a statement. “Arm has no right, contractual or otherwise, to attempt to interfere with Qualcomm or Nuvia innovations. Arm’s complaint ignores the fact that Qualcomm has extensive and well-established licensing rights covering its custom-designed processors, and we are confident that these rights will be upheld.
The trial is complicated. Arm is not a chipmaker. The UK-based company has developed the architecture that other semiconductor designers use to map their own chips. The company licenses its intellectual property for royalties and royalties based on the number of Arm-centric chips sold by its licensees.
According to the lawsuit, Nuvia received licenses in 2019 that allowed it to take elements of Arm’s architecture and customize them to create its own base designs. The agreement prohibited the transfer of these licenses without Arm’s authorization.
In March 2021, Qualcomm announced that it was acquiring Nuvia. But he did not notify Arm or seek permission to transfer the licenses, according to the lawsuit.
Arm says he informed Qualcomm shortly after the announcement that Nuvia could not transfer its licenses under the agreement without Arm’s signature. Arm says he worked for over a year to broker a deal. But in March 2022, it terminated Nuvia’s licenses.
Qualcomm claims it has Arm licenses that allow it to do custom background work – although the lawsuit claims Qualcomm hadn’t done so since 2018. Instead, it relied on designs base prefabricated by Arm.
“Qualcomm’s Arm licenses do not cover products based on or incorporating Arm-based technologies developed by third parties under different Arm licenses, such as the now terminated Nuvia licenses,” according to the lawsuit.
Arm is asking the court to enforce the terms of the contract and destroy any technology developed under Nuvia’s terminated licenses. He also claims trademark infringements related to the use of Arm’s name with technology developed by Nuvia, and he seeks a permanent injunction and treble damages for these alleged infringements, among others.
Arm announced the lawsuit just as markets closed on Wednesday. Qualcomm shares ended up falling 1% to $132.27 on the Nasdaq stock exchange.
