Qualcomm has achieved a partial victory in its ongoing legal dispute with British semiconductor company Arm in the US. A federal jury ruled that the mobile chipmaker’s central processors are appropriately licensed under its agreement with Arm. The ruling provides Qualcomm with a pathway to continue its expansion into the laptop processor market, though not all issues in the case were resolved.
The trial, held in Delaware, ended in a mistrial on one of three central questions after the jury could not reach a unanimous decision. While Qualcomm welcomed the decision as a step forward in its efforts to bring advanced chips to market, Arm confirmed its intention to seek a new trial to address unresolved matters.
“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,” stated Qualcomm. “We will continue to develop performance-leading, world class products that benefit consumers worldwide, with our incredible Oryon ARM-compliant custom CPUs.”
The disagreement stems from Qualcomm’s 2021 acquisition of Nuvia, a startup specialising in custom chip designs based on Arm’s architecture. Following the purchase, Arm claimed that Nuvia breached its licensing terms. The British firm argued that Qualcomm continued using Nuvia’s designs without renegotiating the terms of the licence.
While the jury did not reach a verdict on whether Nuvia had violated its licence, it found that Qualcomm did not breach those terms after acquiring the startup. Furthermore, the jury concluded that Qualcomm’s chips, built using Nuvia’s technology, are validly licensed under Qualcomm’s existing agreement with Arm.
This ruling enables Qualcomm to proceed with the production and sale of its chips designed for laptops, including its artificial intelligence (AI)-focused processors. These chips are intended to compete in a growing segment of the personal computer market alongside products from Nvidia, MediaTek, and Advanced Micro Devices.
Unresolved licensing and royalty issues
Although the jury’s decision clears some uncertainty, broader questions about royalty rates remain unanswered. Prior to its acquisition, Nuvia was required to pay higher royalties for using Arm’s architecture. Qualcomm, however, has argued that it can apply its lower royalty rates under its own licensing agreement for technology acquired through Nuvia.
Arm disputes this claim, asserting that the chips intended for Microsoft’s Copilot+ laptops are a continuation of Nuvia’s original designs and are therefore subject to different royalty terms. In October 2024, Arm issued Qualcomm a mandatory 60-day notice to terminate its architectural licence, as per a report by Bloomberg News. This licence had allowed Qualcomm to design and manufacture chips using Arm’s standards.
Judge Maryellen Noreika, who presided over the trial, has recommended that Arm and Qualcomm attempt mediation to resolve their disagreement. Despite this suggestion, Arm has indicated that it plans to pursue a retrial to address outstanding concerns.
The ruling had an immediate impact on the market, with Arm’s shares falling by 1.8% in after-hours trading and Qualcomm’s shares rising by the same margin.
Read more: Qualcomm brings laptop chip technology to mobile devices for AI enhancement
