Arm To Seek Retrial In Qualcomm Case After Mixed Verdict

Arm said it will seek a retrial of its lawsuit against Qualcomm over a licensing dispute related to the latter company’s Snapdragon X chips after a federal jury sided with Qualcomm over two key issues but was deadlocked on a third.

The Cambridge, U.K.-based chip design licensor issued the statement in response to the mistrial caused by the jury’s mixed verdict issued in Delaware’s U.S. District Court on Friday.

“We are disappointed that the jury was unable to reach consensus across the claims. We intend to seek a retrial due to the jury’s deadlock,” an Arm spokesperson said in a statement.

“From the outset, our top priority has been to protect Arm’s IP and the unparalleled ecosystem we have built with our valued partners over more than 30 years,” the representative added. “As always, we are committed to fostering innovation in our rapidly evolving market and serving our partners while advancing the future of computing.”

The jury found that Qualcomm did not violate an Arm architecture license agreement that was granted for the purpose of developing custom, Arm-based CPU cores to Nuvia, a chip design startup it acquired in 2021 to revitalize its CPU efforts in the PC market, among other things.

The jury also determined that Qualcomm’s existing architecture license agreement with Arm covered the continued development of custom CPU cores it gained from the Nuvia acquisition.

However, the jury was deadlocked over whether Nuvia violated the license agreement it held with Arm when it was acquired by Qualcomm.

Reuters reporter Max Cherney posted on X that the judge presiding over the case has asked Arm and Qualcomm to mediate after the mistrial and said there is no clear path to victory for either side if the case were to be tried again.

Qualcomm declared the mixed verdict a victory shortly after it was delivered.

“We are pleased with today’s decision. The jury’s verdict vindicates Qualcomm’s right to innovate. We will continue to develop performance-leading, world class products that benefit consumers worldwide,” Qualcomm CMO Don McGuire said in a post on X.

Arm’s stock price was down more than 1.4 percent while Qualcomm’s shares were up by more than 1.8 percent in after-hours trading Friday.

The mixed verdict came out of a lawsuit filed by Arm in August 2023, alleging that Qualcomm breached the Nuvia licensing agreement by continuing development of Nuvia’s custom CPU cores without getting permission to do so from Arm after the acquisition closed. Arm said both parties failed to reach a new agreement after negotiating terms for more than a year.

Arm, which also accused Qualcomm of infringing its trademarks in connection with the alleged licensing breach, sought to halt the sales of all Qualcomm chips containing the contested custom CPU cores as a form of relief. It also sought the destruction of such chips as well as any materials bearing Arm’s trademarks.

San Diego, Calif.-based Qualcomm, on the other hand, claimed that the continued development of the custom CPU cores it gained through the Nuvia acquisition is covered by independent licenses it holds for the “same Arm technology and information.”

The jury entered its decision after Qualcomm and Arm executives delivered clashing arguments over the validity of the lawsuit’s claims between Monday and Wednesday.

The custom CPU cores, since renamed to Oryon, are used in Qualcomm’s Snapdragon X processors, which were the first to go into the initial wave of PCs from HP Inc., Dell Technologies, Lenovo and other OEMs under Microsoft’s new Copilot+ PC program.

The verdict was issued as Qualcomm seeks to challenge Intel and AMD in the PC market with its Snapdragon X processors by building a “global retail and commercial channel presence,” as CRN reported earlier in December.