Qualcomm Wins Partial Victory in Arm Licensing Dispute, Retrial Possible

[AleksandarK]

A Delaware jury has delivered a mixed verdict in the high-stakes licensing dispute between Qualcomm and Arm, with Qualcomm securing a significant but incomplete victory. The jury unanimously found that Qualcomm's use of Oryon cores in its Snapdragon X processors for client PCs did not violate its licensing agreements with Arm. The case centered on Qualcomm's $1.4 billion acquisition of Nuvia in 2021 and subsequent use of Nuvia's processor designs. Arm had alleged that Nuvia's licensing terms couldn't transfer automatically to Qualcomm and demanded renegotiation of the agreements. When Qualcomm proceeded with development, Arm insisted the designs be destroyed. During the trial, Gerard Williams III, the lead developer of Oryon cores and former Apple engineer, testified that the final design contained less than 1% of Arm technology.

This testimony supported Qualcomm's position that its existing architecture license covered products designed by its subsidiaries. While Qualcomm celebrated the verdict allowing continued development of its Snapdragon X processors, the jury deadlocked whether Nuvia violated its original agreement with Arm, specifically about permitting server processor development. This impasse has prompted Arm to announce its intention to seek a retrial on this unresolved count. "We are disappointed that the jury was unable to reach consensus across the claims," Arm stated, wanting to protect its intellectual property and ecosystem. Meanwhile, Qualcomm expressed satisfaction with the decision, stating the verdict "vindicated Qualcomm's right to innovate." The stakes remain high for both companies. Qualcomm relies on its Oryon cores to compete in the PC market, where it currently holds a 0.8% share of Q3 2024 shipments, while Arm derives approximately $300 million annually from Qualcomm, representing 10% of its revenue.



View at TechPowerUp Main Site | Source

 

[Chaitanya]

Neither of these 2 are clean but still that ruling means ARM will try something sneaky in future.

 

[piloponth]

Next time the ARM will be more carefull with its licenses. Explicitly stating that it is not transfereable to the buyer of the license client.

 

[kondamin]

Next time the ARM will be more carefull with its licenses. Explicitly stating that it is not transfereable to the buyer of the license client.

This and their recent price changes should be enough to deter anyone from starting a new architecture based on arm

 

[Neo_Morpheus]

Next time the ARM will be more carefull with its licenses. Explicitly stating that it is not transfereable to the buyer of the license client.

Cant read your post, had to copy and paste in notepad to see it.

Anyways, my understanding is that the Nuvia contract already stated that it was not transferrable so I find this ruling weird.

I honestly dont understand how people are giving poor and defenseless Qualcomm a pass when they have shown over and over how dirty they are and how they have no issues in abusing their partners.

Just search for all the crap they have pulled with their modems even after being under FRAND rules.

I personally hope that Arm finds a way to remove all licenses from Qualcomm.

This and their recent price changes should be enough to deter anyone from starting a new architecture based on arm

Do you realize how much money others are making thanks to Arm’s work?

 

[silentbogo]

This is a weird one. You have Qualcomm - one of the biggest ARM clients, who paid for their license and, at least according to their press releases, had a right to transfer IP between their subsidiaries. On the other - Nuvia, who also paid ARM for their licenses. So, from the very beginning it looks like ARM is trying to double-dip by making Qualcomm re-evaluate their contracts and pay more for what Nuvia and Qualcomm has already paid. This weeks conclusion confirms that Qualcomm's designs based on Nuvia did not violate either license agreement, but for some reason the case still ended in mistrial with possibility of further litigation...

Cant read your post, had to copy and paste in notepad to see it.

It's sneaky

Do you realize how much money others are making thanks to Arm’s work?

Also all of these are long-term projects, which require stability. Companies open and close, or get absorbed by larger companies all the time. The only thing that does not change, is that ARM gets its licensing fees either way. The only thing that changed, is that now ARM is a publicly-traded company, so their priorities are now with their shareholders. So, in the nearest future I expect ARM-based chips to become wa-a-a-a-ay more expensive.

 

[kondamin]

Do you realize how much money others are making thanks to Arm’s work?

I also know that the money demanded by arm exploded last year to something those other companies weren't accounting for.
And that forcing a company to destroy an architecture isn't in the interest of the public good either.

Qualcomm is a known bad actor that much is true, but screwing them over for something they didn't do just because they did some something else wrong or because you don't like them isn't the way either.

 

[Neo_Morpheus]

at least according to their press releases, had a right to transfer IP between their subsidiaries

thats Qualcomm lying.

Nuvia, who also paid ARM for their licenses.

As they should.

So, from the very beginning it looks like ARM is trying to double-dip

But that is wrong.
Arm (and quick Google searches) confirmed that the licenses are not transferable and they even had that in writing on Nuvias case.

There are other details, their licensees cover different architectures, which I think are also part of the problem, One of them had Armv8 and the other had V9. But supposedly, those are also non transferable.

Which is another thing that Qualcomm wanted to bypass.

It's sneaky

Must be a ninja!

So, in the nearest future I expect ARM-based chips to become wa-a-a-a-ay more expensive.

I dont know those details, but I do know that Arm is pretty much powering the whole planet, yet their revenues are as follow:

"In its 2024 fiscal year, Arm Holdings recorded revenues of 3.2 billion U.S. dollars, of which 1.8 billion U.S. dollars was generated through royalties. A further 1.4 billion U.S. dollars in revenue came through non-royalty revenue, which includes technology licensing revenues and those from customer support services."

From this link

I also know that the money demanded by arm exploded last year to something those other companies weren't accounting for.

See above.

And that forcing a company to destroy an architecture isn't in the interest of the public good either.

Semi agree, but if this was somehow stated in their contract and it was breached, then what can they do?

Qualcomm is a known bad actor that much is true, but screwing them over for something they didn't do

Thats the thing, I can guarantee that Qualcomm did knew and do breached their contract/license.

I'm not sure how in this particular trial they got away with it, but I dont believe they are innocent.

Thats going by bits and pieces all around, like the non transferable clause.

Talking about non transferable licenses, which funny enough, its rumored to exists between AMD and Intel, which states that the X86/X64 license cannot be transferred and it was the main reason why nobody bought AMD when Intel almost killed them via their illegal tactics and why it wont be that easy for anyone else to buy Intel now.

Maybe is my bias against Qualcomm thanks to all the dirty crap they have pulled all these years and perhaps not knowing everything on their agreements, but as said, I really doubt that Qualcomm is acting in good faith.

 

[lexluthermiester]

Next time the ARM will be more carefull with its licenses. Explicitly stating that it is not transfereable to the buyer of the license client.

That will not work as it's not legal in contract law either here or in the UK.

Anyways, my understanding is that the Nuvia contract already stated that it was not transferrable so I find this ruling weird.

What you failed to understand is that Qualcomm's contracts DID allow for it as Nuvia became a subsidiary. So even if the Nuvia contract did not allow transfer, Qualcomm's contract did allow for it and as Qualcomm became the parent company, their contract became the contract of venue and control. Nuvia's contracts became effectively null & void upon acquisition. This is what ARM failed to understand as well and is why they lost. The jury did exactly what they were supposed to do and in exactly the correct way, including the unresolved count. They correctly set that one aside for later consideration.

 

[remixedcat]

This is a weird one. You have Qualcomm - one of the biggest ARM clients, who paid for their license and, at least according to their press releases, had a right to transfer IP between their subsidiaries. On the other - Nuvia, who also paid ARM for their licenses. So, from the very beginning it looks like ARM is trying to double-dip by making Qualcomm re-evaluate their contracts and pay more for what Nuvia and Qualcomm has already paid. This weeks conclusion confirms that Qualcomm's designs based on Nuvia did not violate either license agreement, but for some reason the case still ended in mistrial with possibility of further litigation...


It's sneaky

Also all of these are long-term projects, which require stability. Companies open and close, or get absorbed by larger companies all the time. The only thing that does not change, is that ARM gets its licensing fees either way. The only thing that changed, is that now ARM is a publicly-traded company, so their priorities are now with their shareholders. So, in the nearest future I expect ARM-based chips to become wa-a-a-a-ay more expensive.

ARM being greedy that's what

 

[lexluthermiester]

ARM being greedy that's what

Yeah, there's some of that too.

 

[Neo_Morpheus]

That will not work as it's not legal in contract law either here or in the UK.


What you failed to understand is that Qualcomm's contracts DID allow for it as Nuvia became a subsidiary. So even if the Nuvia contract did not allow transfer, Qualcomm's contract did allow for it and as Qualcomm became the parent company, their contract became the contract of venue and control. Nuvia's contracts became effectively null & void upon acquisition. This is what ARM failed to understand as well and is why they lost. The jury did exactly what they were supposed to do and in exactly the correct way, including the unresolved count. They correctly set that one aside for later consideration.

Hmm, if thats the case, its really strange that Arm didn’t prepare themselves for such scenarios, especially knowing how dirty Qualcomm is.

But assuming this chapter is closed, I will be very surprised if the next contract is not changed accordingly.

 

[lexluthermiester]

Hmm, if thats the case, its really strange that Arm didn’t prepare themselves for such scenarios, especially knowing how dirty Qualcomm is.

That makes a lot of assumptions. Not a rabbit hole I'm jumping down..

But assuming this chapter is closed, I will be very surprised if the next contract is not changed accordingly.

You assume that such limitations would be lawful under contract law. They generally are not.

 

[trsttte]

how people are giving poor and defenseless Qualcomm a pass when they have shown over and over how dirty they are and how they have no issues in abusing their partners.

Because ARM, ever since it went public after the failed bid/sale from/to nvidia, is being even worse. The modem business is very cutthroat, even apple has been reverse engineering qualcomm's work for the past decade to roll out their own modems.

Do you realize how much money others are making thanks to Arm’s work?

ARM choose their business model, do you realize how much risk and money others are investing too keep things compatible with ARM's work?

then what can they do?

Honestly ARM can just fuck right off, when the internal communications appeared on discovery about how they wanted to destroy everything nuvia touched they lost all reason in my opinion. They basically wanted to destroy a competing product that is/could be better than theirs and started a smear campaign within qualcomm customers, very shady. At the most they would be owed damages which would be calculated over every chip/device sold and come out of qualcomm's coffers, to threat destruction of inventory? Nuts!

This is only further proof that it's time to divest from ARM and start investing in alternatives, the leading one probably being RISC-V.

 

[Neo_Morpheus]

That makes a lot of assumptions. Not a rabbit hole I'm jumping down..

Indeed.

You assume that such limitations would be lawful under contract law. They generally are not.

Given that Arm lives by those contracts, you can bet that they will try but yes, lets see how much the law keeps these things sane.

Because ARM, ever since it went public after the failed bid/sale from/to nvidia,

I will be honest, I think we dodged a bullet there.
I simply saw not good reasons for them to buy Arm and the governing bodies thought the same.

The modem business is very cutthroat, even apple has been reverse engineering qualcomm's work for the past decade to roll out their own modems.

Apple and others were desperate in trying to escape Qualcomm clutch due to their abuses and monopoly.

Luckily for the world, the worst part was their cdma monopoly but since then everyone slowly moved to gsm.

ARM choose their business model, do you realize how much risk and money others are investing too keep things compatible with ARM's work?

I’m not sure how much risk is there when others use Arms references chips but i do understand the risk for others.

But without Arm designs, the others dont have anything.

Its a real world chicken and egg scenario.

Honestly ARM can just fuck right off, when the internal communications appeared on discovery about how they wanted to destroy everything nuvia touched they lost all reason in my opinion. They basically wanted to destroy a competing product that is/could be better than theirs and started a smear campaign within qualcomm customers, very shady. At the most they would be owed damages which would be calculated over every chip/device sold and come out of qualcomm's coffers, to threat destruction of inventory? Nuts!

Yeah, thats not good and bad faith.
But again, Qualcomm has used such tactics in the past, so both are guilty.

This is only further proof that it's time to divest from ARM and start investing in alternatives, the leading one probably being RISC-V.

I really hope that RISC-V succeeds, the more I read about it, the more I like it.

And with The GOAT Jim Keller involved, I see a bright future for them.

The question is, how soon can they start offering a good alternative to Arm and x86?

I hope thats soon!

 

[lexluthermiester]

Given that Arm lives by those contracts, you can bet that they will try but yes, lets see how much the law keeps these things sane.

One can put anything one wants in a contract. However, that does not mean that all contract terms are enforceable or are lawful. Additionally, signing a contract does not mean you're legally bound to the unlawful/unenforceable terms. Just throwing it out there.

 

[igormp]

And with The GOAT Jim Keller involved, I see a bright future for them.

The question is, how soon can they start offering a good alternative to Arm and x86?

I don't think we'll be seeing any consumer-focused design out of him or his company any time soon.
Even though they have built a high-performing core and are even licensing it, it's mostly meant for edge devices with many other accelerators. Tenstorrent is specialized in building custom AI accelerators, after all.

Their own workstation offering uses a regular Epyc CPU with their accelerators in the box.

RISC-V is getting tons of traction in the embedded world and even the Linux-based ones, which is really similar to how ARM has ramped up to where it is nowadays. It may take another decade or two for RISC-V to even become somewhat known in the desktop world.

 

[Neo_Morpheus]

Their own workstation offering uses a regular Epyc CPU with their accelerators in the box.

Go AMD go!

It may take another decade or two for RISC-V to even become somewhat known in the desktop world.

Well, given my age, I might not care or not being in this planet anymore by when that happens, so it will be either X86/64 or Arm.

And must admit, the current M4 from Apple is a little beast, so might pick one up to play with Arm.

 

[trsttte]

I will be honest, I think we dodged a bullet there.
I simply saw not good reasons for them to buy Arm and the governing bodies thought the same.

Absolutely! But either way, Softbank wanted to get rid of it because ARM isn't a money making machine, when they couldn't get rid of it they started turning the screw on the profitability front to make a public offering.

But without Arm designs, the others dont have anything.

Its a real world chicken and egg scenario.

There are other core designs, for better or (often) worse. It's a symbiotic relationship where ARM doesn't get to make a ton of money but also are not exposed to that much risk. They don't have to get products built, sold and supported, all the while competing with every other company doing the same.

What's happening is ARM desperately wants to change the equation, why should chip manufacturers make all the money while ARM just gets by? Too bad, they either join the game of manufacturing an actual product (as it seems they plan on doing) which is where all the money is and deal with all the associated risks or they can fuck off and accept the small share of the semiconductor profits they have.

TSMC also doesn't do any money when compared to the bulk of their clients, you don't see them trying screw everyone over for a part of the profits, they choose their business model and their place in the supply chain and are very successful at it.