(Dec 21): Qualcomm Inc prevailed at trial against Arm Holdings plc’s claim that it breached a licence for chip technology that the world’s largest maker of mobile-phone processors acquired when it bought a startup in 2021. 

Jurors of the Federal Court in Delaware concluded on Friday that Qualcomm didn’t violate the terms of an agreement covering Arm’s chip products acquired in a US$1.4 billion (RM6.3 billion) purchase of Nuvia Inc by incorporating the technology in its chips without paying a higher licensing rate. Jurors weren’t able to agree on whether Nuvia breached the licence, and US District Judge Maryellen Noreika said that issue could be retried at a later date.

Qualcomm is one of Arm’s biggest customers and a long-time partner, but the companies have grown increasingly at odds as they have become rivals in the computer-processor industry. The dispute is important because many of the world’s largest tech companies rely on chip architecture licensed from Arm and incorporated into Qualcomm’s products, ranging from computers to cars.

Qualcomm gained about 2.6% in late trading on Friday, while Arm declined about 2%.

Arm said it intends to seek a retrial.

“We are disappointed that the jury was unable to reach consensus across the claims,” the company said in a statement.

Jurors at first told the judge on Friday they were at an impasse in their second day of deliberations. After Noreika told the eight-member panel to keep trying to reach a unanimous decision, the jury delivered a verdict on two of the three counts. 

“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,” Qualcomm said in a statement.

Arm claimed its Nuvia agreement should have been renegotiated after Qualcomm bought the startup and demanded the San Diego-based company destroy designs it got in the buyout. Qualcomm — which is relying on Nuvia’s technology to push into the computer-processor market — argued to jurors it had a separate general licence for Arm innovations that covered its work. 

UK-based Arm, which is majority-owned by Japan’s SoftBank Group Corp, sells chip designs and licences a so-called instruction set — code used by software to communicate with processors. Qualcomm is the biggest chip provider to mobile phone makers such as Samsung Electronics Co.

The chief executive officers of both companies testified in the week-long trial, which was filed in Delaware because Qualcomm is incorporated in the state, home to almost 70% of Fortune 500 companies. Delaware’s Federal Court also is a US hub of patent-infringement and licensing litigation. 

The case is Arm v Qualcomm, 22-cv-01146, US District Court, District of Delaware (Wilmington).

Uploaded by Tham Yek Lee