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Arm sues Qualcomm over contract ‘breach’

Arm Qualcomm

Cambridge-based microchip designer Arm has sued US semiconductor firm Qualcomm, alleging that it breached a contract and infringed on trademarks to design competitor microchips.

Qualcomm has been a significant customer of Arm in the past, however, it is now being accused of attempting to transfer licence agreements from Nuvia without consent from Arm.

Nuvia is a semiconductor startup that was acquired by Qualcomm for $1.4bn in January 2021.

Arm claims that Nuvia’s designs were developed under an agreement that allowed Nuvia to use Arm’s microchip architecture, which it says is now being unfairly taken by Qualcomm following its acquisition.

“Arm is filing this claim to protect Arm, our partners, and the unparalleled ecosystem we have built together,” said Arm in a statement.

“Because Qualcomm attempted to transfer Nuvia licenses without Arm’s consent, which is a standard restriction under Arm’s license agreements, Nuvia’s licenses terminated in March 2022.”

The statement said that Arm made “multiple good faith efforts to seek a resolution” and despite this, “Qualcomm has breached the terms of the Arm license agreement by continuing development under the terminated licenses”.

“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.”

Qualcomm’s general counsel, Ann Chaplin responded to the lawsuit, saying it “marks an unfortunate departure from its longstanding, successful relationship with Qualcomm”.

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

Arm uncertainty continues

Arm has been one of UK tech’s biggest successes since its founding in 1990. The future of Arm’s UK position has, however, been brought into uncertainty by a failed merger and plans for a public listing in the US or UK.

The company was delisted from the London Stock Exchange after it was acquired for £24bn by Japan’s SoftBank in 2016.

SoftBank has been struggling to decide what to do with Arm after a $40bn acquisition by Nvidia was abandoned due to regulatory challenges.

The UK government has made efforts to convince Arm’s owners to IPO the company in London once again. However, New York remains an attractive option for SoftBank CEO Masayoshi Son.

The UK has been criticised for its ineffectiveness in securing the future of its semiconductor industry. Major figures from Intel, Paragraf and more have called for the UK to develop a microchip strategy.