Qualcomm Fights Back Against Arm in Dispute Over Chip Technology
(Bloomberg) -- Qualcomm Inc. countersued UK-based Arm Ltd., saying there is no legitimate basis for claims that the US chipmaker violated licensing agreements and trademarks tied to a 2021 acquisition.
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San Diego-based Qualcomm wants a federal judge in Delaware to conclude it didn’t trample on Arm’s licensing contracts as part of Qualcomm’s $1.4 billion buyout of chip startup Nuvia Inc., according to a court filing Wednesday.
The dispute focuses on Arm’s licenses with Nuvia for technology used in chip designs. Arm, owned by SoftBank Group Corp., sued Qualcomm for breach of contract and trademark infringement in September, accusing the firm of using the proprietary innovations without permission. In the past, Qualcomm had been one of Arm’s biggest customers.
Qualcomm’s lawyers allege Arm’s goal is to “strong-arm Qualcomm into renegotiating the financial terms of the parties’ longstanding license agreements, using this baseless lawsuit as leverage.”
The dispute has drawn wide attention in the tech industry. Qualcomm is the biggest maker of the processors and modems used in smartphones, and Arm is one of the world’s most-influential chip companies.
“Arm’s claim against Qualcomm is aimed at protecting the Arm ecosystem and partners who rely on our intellectual property and innovative designs,” Phil Hughes, an Arm spokesman, said Thursday in an emailed statement. “We believe our argument is clear, and we are confident the court will agree.”
Qualcomm acquired Nuvia last year to beef up its technology and allow it to field more powerful chips. It’s part of a broader strategy by Chief Executive Officer Cristiano Amon for Qualcomm to decrease reliance on the smartphone industry and grab a share of the laptop-chip market and the lucrative server-processor business.
Arm’s suit is designed to hamper Qualcomm’s plans, the US company’s attorneys argued.
“With this lawsuit, Arm makes clear to the marketplace it will act recklessly and opportunistically, threatening the development of new and innovative products as a negotiating tactic, not because it has valid license and trademark claims,” according to the filing.
Arm is wrongfully demanding Qualcomm destroy all technology with ties to the UK company and misrepresenting its right to that technology to customers, the media and analysts, the US company’s lawyers contend.
“The notion ARM has the right to control technology that is not ARM’s -- and worse yet, to ask defendants to destroy their innovation and inventions unless substantial monetary tribute is paid to ARM -- offends customary norms of technology ownership, as well as NUVIA’s and Qualcomm’s rights under their agreements with ARM,” Qualcom’s lawyers said in the filing.
The case is Arm Ltd v. Qualcomm Inc., No. 22-1146, US District Court for the District of Delaware (Wilmington)
--With assistance from Amy Thomson and Ian King.
(Updates with Arm’s comment in sixth paragraph)
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