Key facts
- Qualcomm is suing Arm Holdings for allegedly breaching licensing agreements and sabotaging its dealings with Meta Platforms.
- The trial is the second between the companies in two years.
- Qualcomm alleges Arm withheld software patches and tools and violated a pricing agreement.
- Qualcomm also claims Arm leaked a letter to Bloomberg to torpedo its Meta deal.
- Arm's defense argues Qualcomm suffered no harm and is using the lawsuit for leverage in licensing negotiations.
- Both companies' CEOs, Cristiano Amon and Rene Haas, testified in the trial.
A lawsuit filed by chipmaker Qualcomm against chip technology supplier Arm Holdings is set to go before a jury on Friday to determine if Arm breached licensing agreements and intentionally sabotaged Qualcomm's relationship with Meta Platforms. The five-day trial in Wilmington, Delaware, marks the second legal confrontation between the companies in two years, underscoring a significant deterioration in their business relationship since SoftBank Group Corp took control of Arm in 2016.
Qualcomm is seeking a verdict that Arm breached its licensing agreements by withholding essential software patches and tools for its chip designs. Additionally, Qualcomm alleges Arm violated an agreement meant to ensure Qualcomm received the lowest price for Arm's processor designs, paying no more than 10% above that rate. The company also claims Arm attempted to undermine its dealings with Meta Platforms by leaking a letter to Bloomberg in 2024, which notified Qualcomm of an alleged breach of a key license agreement.
Arm's legal team has focused its defense on the argument that Qualcomm has not suffered any actual harm from the allegations, characterizing the lawsuit as an attempt to gain leverage in ongoing licensing negotiations. A separate bench trial also took place this week concerning whether Arm is negotiating these terms in good faith, though a decision on that matter is expected after Friday's jury verdict.
The current trial shares many of the same factual underpinnings as a 2024 trial where Arm failed to convince a jury that Qualcomm had breached its licensing agreement. Both trials featured testimony from Arm CEO Rene Haas and Qualcomm CEO Cristiano Amon and were presided over by US District Judge Maryellen Noreika. Qualcomm's lawyer, Karen Dunn, emphasized the critical importance of the case, stating that Qualcomm's entire chip business relies on Arm honoring its contracts and promises. Qualcomm had sought a pre-trial ruling that a contract clause would allow it to stop paying royalties for five years if Arm breached the agreement, a penalty Arm's counsel Gregg LoCascio argued is unenforceable, asserting Qualcomm was not harmed.