Arm and Qualcomm clash over IP ownership in high-stakes legal battle

In a high-stakes trial in U.S. federal court in Delaware, Arm and Qualcomm are embroiled in a legal battle over ownership of intellectual property (IP) based on Arm’s computing architecture. The case could significantly impact Qualcomm's ambitions in the laptop market, where it is collaborating with Microsoft to challenge Apple’s dominance, which grew after the tech giant introduced its custom-designed chips.

Arm’s flagship product, a computing architecture found in smartphones, laptops, and data centers, competes against Intel’s technology. Companies like Apple design their own custom cores using Arm’s architecture, while smaller firms, such as MediaTek, often rely on Arm’s off-the-shelf core designs. The crux of the dispute revolves around the ownership of computing core designs based on Arm’s architecture, particularly regarding Qualcomm’s acquisition of Nuvia, a startup founded by former Apple engineer Gerard Williams in 2019.

At the heart of the trial is whether Qualcomm’s $1.4 billion purchase of Nuvia in 2021 gives the company the right to use the computing core designs Nuvia created. Arm contends that Nuvia’s designs were derivatives of its technology, and that Qualcomm should not be able to transfer them without violating licensing agreements.

During a December 17 court session, Arm’s attorney grilled Williams about the licensing contract, which covers “derivatives” and “modifications” of Arm’s technology. Although Williams acknowledged that the contract’s language suggested Nuvia’s work could be considered derivative, he argued that not all of Nuvia’s designs relied on Arm’s technology. When asked how much of Nuvia’s work involved Arm’s technology, Williams estimated that it was “one percent or less.”

Qualcomm’s purchase of Nuvia raised concerns within Arm, with analysts noting that Qualcomm’s annual payment to Arm, around $300 million, did not include the full value of Nuvia’s IP. As the trial nears its conclusion, a jury decision may come this week, with Qualcomm CEO Cristiano Amon potentially taking the stand.