Arm vs Qualcomm Legal Showdown Sends Stocks Tumbling Amidst Licensing Dispute
1min read In a move that highlights the intensifying legal battle in the tech industry, Arm Holdings (ARM) and Qualcomm are set to face off in court this week over a licensing agreement concerning Arm's intellectual property. The trial, which commenced on Monday, is expected to last approximately a week, with both Arm's CEO Rene Haas and Qualcomm's CEO Cristiano Amon slated to provide testimony.
This dispute traces back to 2022 when Arm accused Qualcomm of breach of contract and trademark infringement following Qualcomm's $1.4 billion acquisition of chip startup Nuvia, an Arm licensee. Arm contends that Qualcomm failed to secure Arm's consent to transfer Nuvia’s licenses and has allegedly used Arm's technology without permission. Qualcomm, a key customer of Arm, maintains that the existing licenses cover Nuvia's operations.
Qualcomm's Chief Financial Officer, Akash Palkhiwala, expressed confidence in the robustness of their licensing rights during a recent earnings call, emphasizing Qualcomm's belief that their rights will be upheld. Meanwhile, Arm, controlled by SoftBank, seeks a court order for Qualcomm to destroy products infringing on its intellectual property. Additionally, the British chip designer issued a 60-day notice in October to terminate Qualcomm's chip design agreement, a notice set to expire next week.
Analysts, such as those from Wolfe Research, speculate that Arm's recent move to cancel the agreement may primarily serve as a negotiating tactic rather than a definitive outcome. The ongoing legal dispute underscores the complex dynamics and high stakes in the semiconductor industry, with significant implications for future collaborations and intellectual property negotiations.