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Qualcomm Wins Key Battle in Chip License Dispute with Arm

Qualcomm has emerged victorious in a key aspect of its legal battle with Arm Holdings, securing a jury verdict that validates its chip licensing practices, reports Reuters. However, the US federal court trial in Delaware ended in a mistrial on one key question, leaving some uncertainty about the future of the two chip giants' relationship.

The jury found that Qualcomm's central processors, incorporating technology from its 2021 acquisition of Nuvia, are properly licensed under its agreement with Arm. This clears the way for Qualcomm to continue selling these chips, crucial for its expansion into the laptop market.

"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.

However, the jury could not reach a unanimous verdict on whether Nuvia had breached the terms of its license with Arm. This issue will likely be subject to a new trial, a course of action Arm has already indicated it will pursue.

"I don't think either side had a clear victory or would have had a clear victory if this case is tried again," Judge Maryellen Noreika stated, encouraging both parties to consider mediation.

The dispute centered on the royalty rate Qualcomm should pay for each chip, with Nuvia's original license stipulating higher rates than Qualcomm's current agreement with Arm. The jury's finding that Qualcomm did not breach this license is a significant win for the company, allowing it to continue its push into the "AI PC" laptop chip market.

"My biggest worry was what happens to the future roadmap if they (Qualcomm) no longer have access to Nuvia (computing) cores," said Bernstein analyst Stacy Rasgon to Reuters. "At this point, that risk is a lot closer to being off the table."

The trial also raised broader questions about the scope of Arm's technology licensing, particularly regarding the distinction between Arm's architecture licenses and the sale of off-the-shelf core designs. Arm had argued that its license with Nuvia required the destruction of Nuvia's custom core designs.

"This does have ramifications for the entire industry," said Jim McGregor of Tirias Research. "Whether you're using a standard Arm core, or developing your own Arm core, it has been the rock of everything from electric toothbrushes to satellites."