The legal battle between Arm and Qualcomm is hotting up. The dispute is over Qualcom’s acquisition of a chip company called Nuvia. Although not publicly announced, it appears that Arm is apparently changing its licensing terms and business model.
Arm-Qualcomm legal battle suggests OEMs need Arm IP licenses, not chip firms
By
Matt Hamblen
Oct 28, 2022 02:21pm
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Arm and Qualcomm are ensnared in a complex legal battle in US district court over licensing of intellectual property with potentially far-reaching impact. A recent filing in the case suggests fundamental changes could be underway in how Arm works with chipmakers and OEM partners.
A document filed by Qualcomm in the lawsuit stipulates Arm is dramatically changing its business model so that OEM partners making servers and other computers must obtain licenses directly from Arm. Normally, Arm licenses its architectural designs and related IP to chipmakers such as Nvidia or Qualcomm, which in turn produce chips that are then sold to companies known as Original Equipment Manufacturers (OEMs) that use those chips to make servers and other computers and devices.
In an updated Qualcomm counterclaim made public Oct. 26, Qualcomm argues that Arm is no longer going to license its central processing unit (CPU) designs after 2024 to Qualcomm and other chip companies under technology license agreements (TLAs). Instead, Qualcomm asserts, Arm will only license to a broad array of device makers. The 83-page counterclaim was filed, complete with redactions of specific license terms between Arm and Qualcomm, in case # 22-1146 before the US District Court in Delaware.
Arm has not yet formally responded to Qualcomm's latest counterclaim but told
Fierce Electronics via email on Friday that Qualcomm’s complaint is “riddled with inaccuracies” that Arm will address in a formal legal response in coming weeks. (A fuller response from Arm can be found below.*)
Qualcomm's counterclaim was first noticed by Dylan Patel in SemiAnalysis. “Arm is allegedly telling OEMs that the only way to get Arm-based chips will be to accept Arm’s new licensing terms,” noted
Patel. “Qualcomm claims that Arm is lying to Qualcomm’s OEM partners about Qualcomm’s licensing terms.”
Patel also said the counterclaim shows Arm is not planning to allow external GPUs, NPUs or ISPs in Arm-based SoCs. “It seems that Arm is effectively bundling its other IP with the CPU IP in a take-it-or-leave-it model,” Patel said. “That would mean Samsung’s licensing deal with AMD for GPU or Mediatek with Imagination GPU is not longer allowed after 2024.”
In its counterclaim filing, Qualcomm argues it is being strongarmed by Arm in a “baseless lawsuit.” Qualcomm argues Arm is making it clear to the marketplace that “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.”
Further, the counterclaim asserts Arm falsely told a longstanding OEM customer of Qualcomm that “unless they accept a new direct license from Arm on which they pay royalties on the sales of the OEM’s products, they will be unable to obtain Arm-compliant chips from 2025 forward. Arm has also threatened at least one OEM that if the OEM does not do so, Arm will go on to license the OEM’s large competitors instead…”