Softbank-owned Arm is suing Qualcomm for alleged breach of licence agreements and trademark infringement based on Qualcomm’s $1.4 billion deal to buy chip start-up Nuvia last year.

Nuvia’s chip designs use Arm’s licences, which Arm stated can’t be transferred over to Qualcomm without its permission. The lawsuit was filed in the US District Court in Delaware.

Nuvia’s licences terminated in March of this year and Arm noted it made multiple good faith efforts to seek a resolution before and after that date.

“Qualcomm has breached the terms of the Arm licence agreement by continuing development under the terminated licences,” according to Arm’s statement. “Arm was left with no choice other than to bring this claim against Qualcomm and Nuvia to protect our IP, our business, and to ensure customers are able to access valid Arm-based products.”

Arm stated it is “seeking specific performance of the contractual obligation to destroy certain Nuvia designs, an injunction against trademark infringement as well as fair compensation for the trademark infringement.”

Ann Chaplin, general counsel for Qualcomm, stated to Mobile World Live (MWL) that Arm’s lawsuit marks “an unfortunate departure from its longstanding, successful relationship with Qualcomm”.

“Arm has no right, contractual or otherwise, to attempt to interfere with Qualcomm’s or Nuvia’s innovations,” she added. “Arm’s complaint ignores the fact that Qualcomm has broad, well-established license rights covering its custom-designed CPU’s, and we are confident those rights will be affirmed”.

Qualcomm bought Nuvia to broaden its portfolio beyond the smartphone sector by developing more powerful chips that could be used in laptops and servers for data centres.

Arm’s designs are used for computers, including the servers used in data centres, and mobile graphics on Android devices.

Analyst reaction
“Nuvia is a relatively new Arm customer whereas Qualcomm is one of its oldest and largest licensees and so it is possible that the terms that Qualcomm has are much better than those that Nuvia was able to negotiate,” reflected Radio Free Mobile’s Dr Richard Windsor.

“Hence, the royalties that Arm will earn may well be less under a Qualcomm license than they would have been under a Nuvia license which could be why Arm is taking action.”

Windsor suggested that another possibility, albeit remote, is that Arm is being egged on by Apple.

“Apple arguably has the best processors available in the market today with its M-series and will be keen to ensure that competing products are slow to come to market. Furthermore, the fact that 22 of Apple’s rivals were willing to voice support for Qualcomm’s acquisition of Nuvia is an indication of just how important it could be long term.”

Qualcomm has been involved in several high profile licencing disputes, including one with Apple that was resolved in 2019.

Earlier this year, Apple filed an appeal with the US Supreme Court to void two of Qualcomm smartphone patents, but the court declined to hear the case.