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Arm Threatens to Revoke Qualcomm Processor License Amid Legal Dispute

Tsaki

Member
Summary of key points from the article:
  • Arm's License Cancellation:
    • Arm is canceling Qualcomm’s architectural license, which allows Qualcomm to design chips based on Arm's intellectual property.
    • The move follows a legal dispute that began in 2022 when Arm sued Qualcomm for breach of contract and trademark infringement.
  • Potential Impact:
    • The cancellation could significantly affect Qualcomm, which generates much of its $39 billion annual revenue from processors used in Android smartphones.
    • If the cancellation holds, Qualcomm may have to halt selling products tied to the disputed technology or face legal consequences.
  • Qualcomm’s Response:
    • Qualcomm disputes Arm's actions, with a spokesperson saying, "It appears to be an attempt to disrupt the legal process, and its claim for termination is completely baseless."
    • Qualcomm remains "confident that [its] rights under its agreement with Arm will be affirmed."
  • Central Dispute: Nuvia Acquisition:
    • Arm argues that Qualcomm's acquisition of Nuvia in 2021 and the use of Nuvia’s chip designs breach its license. Arm demands Qualcomm destroy Nuvia’s pre-acquisition designs.
    • Qualcomm contends that its existing license covers Nuvia’s work.
  • Broader Industry Implications:
    • The legal battle threatens to disrupt both the smartphone and personal computing markets, as well as the operations of two key players in the semiconductor industry.
  • Shift in Strategies:
    • Under CEO Rene Haas, Arm is pushing for more value from its engineering work by offering more complete chip designs, while Qualcomm, under CEO Cristiano Amon, is moving toward more independence from Arm's technology.

Bloomberg article
 

winjer

Gold Member


Arm Holdings has formally notified Qualcomm Technologies of its intention to potentially terminate the license permitting Qualcomm to manufacture processors that utilize Arm's intellectual property. A Bloomberg report from Tuesday reveals that Arm has sent Qualcomm a document stating that the architectural license will be canceled within 60 days. This issue arises from Qualcomm's 2022 acquisition of Nuvia, an Arm licensee authorized to develop custom chips based on Arm's IP. Arm contends that the license granted to Nuvia was not transferable to Qualcomm, leading to an ongoing dispute between the two companies.
Since the acquisition, Nuvia's technology has been developed into the Oryon custom CPU cores, which Qualcomm has integrated into its Snapdragon Elite series of System on Chips. These SoCs are currently powering Microsoft's Copilot Plus PCs, which are designed for on-device artificial intelligence operations. Additionally, Qualcomm has recently announced the use of Oryon-powered SoCs in mobile devices. The legal conflict, which has intensified over the past two years, centers on whether Qualcomm is permitted to use its proprietary Oryon cores instead of Arm's architectures. Arm argues that Qualcomm must continue using Arm-designed architectures and cannot switch to its own designs like Oryon. Qualcomm disputes this, asserting its right to independently develop processor architectures.
The possible revocation of the license has significant implications for the technology industry, particularly for manufacturers of Android smartphones such as Samsung, Xiaomi, and OnePlus, which rely on Qualcomm's SoCs for their devices. Furthermore, Apple Inc., which uses Qualcomm's modems in its iPhone lineup, may face uncertainties regarding the continuity of modem supplies. Qualcomm has not yet received an official response from Arm regarding the license termination but has expressed its intention to challenge Arm's decision legally. A trial is scheduled for December, and the outcome of this dispute is expected to have major effects on both companies and the broader semiconductor industry.

This will probably escalate the legal battle to epic levels.

Fight Punch GIF by Godzilla vs. Kong



Anticipation Popcorn GIF
 

nowhat

Member
Too lazy to dig deeper. What is the issue? Do the Oryon's not contain any ARM IP?
I mean, it's within the first paragraph of the OP, but here goes:

This issue arises from Qualcomm's 2022 acquisition of Nuvia, an Arm licensee authorized to develop custom chips based on Arm's IP. Arm contends that the license granted to Nuvia was not transferable to Qualcomm, leading to an ongoing dispute between the two companies.
In short, while $COMPANY_X may have a license for $THING, it doesn't mean that when $COMPANY_Y buys $COMPANY_X, license for using $THING comes as a part of the package. Whether there's any legal merit to it, I'll leave that to the lawyers.
 
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V1LÆM

Gold Member
Holy crap that could be huge.

No wonder Apple is trying to make their own modem so they don’t need to rely on Qualcomm.
 

Kadve

Member
Too lazy to dig deeper. What is the issue? Do the Oryon's not contain any ARM IP?
Seems to be Nintendo SNES era style exclusivity contract going on here. Qualcomm isn't allowed to develop anything other than ARM based CPU's according to said company.
 

FStubbs

Member
Seems to be Nintendo SNES era style exclusivity contract going on here. Qualcomm isn't allowed to develop anything other than ARM based CPU's according to said company.
So you'd think just like those contracts this would get laughed out of courtrooms but you never know.
 

Three

Gold Member
"Arm demands Qualcomm destroy Nuvia’s pre-acquisition designs."

I don't get this. Can they do that based on a licence? Seems silly to me but I'm sure it's a little more nuanced than that.
 
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I mean, it's within the first paragraph of the OP, but here goes:


In short, while $COMPANY_X may have a license for $THING, it doesn't mean that when $COMPANY_Y buys $COMPANY_X, license for using $THING comes as a part of the package. Whether there's any legal merit to it, I'll leave that to the lawyers.
If the contract specifically stipulates that license is non-transferable and that includes acquisition, then yes there's legal merit and Qualcomm is going to FAFO in the courtroom

The x86-x64 cross-licensing agreement between Intel and AMD is very famous for having such a stipulation, which prevents anyone from acquiring Intel or AMD and gaining access to the x86 license (Intel) or the x64 license (AMD) without renegotiating the contract
 

DonkeyPunchJr

World’s Biggest Weeb
Seems to be Nintendo SNES era style exclusivity contract going on here. Qualcomm isn't allowed to develop anything other than ARM based CPU's according to said company.
no that’s not what this is about. ARM has different licenses. You can license a specific ARM CPU architecture (e.g. Cortex A72) for use in a SoC, or you can buy a (more expensive) license that allows you to design your own custom architecture that implements the ARM instruction set.

Nuvia had the latter. The dispute is about whether that license is transferable to Qualcomm after Qualcomm bought Nuvia.
 
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Wolzard

Member
If they used Risc V, none of this would be happening.

And as a result, MS also got screwed on this one, they put tons of money into "Windows Arm 2.0, now it's going to work!!!" :messenger_tears_of_joy:

They already use it and have even formed an alliance called RISE, with Qualcomm, Andes, Google, Intel, Imagination Technologies, MediaTek, NVIDIA, Red Hat, Rivos, Samsung, SiFive, T-Head, and Ventana.

 

Tsaki

Member
"Arm demands Qualcomm destroy Nuvia’s pre-acquisition designs."

I don't get this. Can they do that based on a licence? Seems silly to me but I'm sure it's a little more nuanced than that.
Yeah it's strange. You'd think it's something that would have been covered in the initial contract Nuvia made with Arm, a clear-cut inheritance or not of the license by a potential buyer.
 

Sophist

Member
ARM don't want to be "double crossed". They give specific licenses to big players (Qualcomm, Apple, ...) and smaller players (Nuvia). For example, ARM gave a license to Nuvia that says that Nuvia will have to pay $2 to ARM for every chip using ARM technology.
Qualcomm, being a bigger player, only has to pay $0.5 per chip. Nuvia developed technologies based on ARM technology using its license but never produced a chip. Nuvia get acquired by Qualcomm for $1.4 billions. Now Qualcomm is making and selling chips using nuvia technology but under its own license ($0.5 fee per chip in our example). ARM feel like they gave a license to Nuvia for nothing and Qualcomm is getting all the "profits". To avoid that, ARM covered themselves with specific clauses in Nuvia license. One of them says that if Nuvia is acquired, the license automatically terminates and all related work must be destroyed.
 
Too lazy to dig deeper. What is the issue? Do the Oryon's not contain any ARM IP?
The Oryon design contains elements from Nuvia's custom blueprints and patents. Nuvia is comprised of some of Apple's ex cpu design team who left and formed their own company...and were then acquired by QCom in late 2021. Arm is throwing a temper tantrum over QCom refusing to pay extra for design licenses that Nuvia had already been paying for up to the point of their incorporation into QCom, which is why Arm sued them in the first place.
 

Bernoulli

M2 slut
The Oryon design contains elements from Nuvia's custom blueprints and patents. Nuvia is comprised of some of Apple's ex cpu design team who left and formed their own company...and were then acquired by QCom in late 2021. Arm is throwing a temper tantrum over QCom refusing to pay extra for design licenses that Nuvia had already been paying for up to the point of their incorporation into QCom, which is why Arm sued them in the first place.
It's not a tantrum
Licenses were for Nuvia and not transferable to Qualcomm
 
This smells fishy, Apple was ultra salty about Qualcomm buying Nuvia because they were led by former Apple engineers. I wouldnt put it past Apple to be petty enough to have ARM lean on Qualcomm, this is the same company that has been holding a grudge against Nvidia for almost a decade.
 

PaintTinJr

Member
no that’s not what this is about. ARM has different licenses. You can license a specific ARM CPU architecture (e.g. Cortex A72) for use in a SoC, or you can buy a (more expensive) license that allows you to design your own custom architecture that implements the ARM instruction set.

Nuvia had the latter. The dispute is about whether that license is transferable to Qualcomm after Qualcomm bought Nuvia.
Surely the problem ARM have is that the new entity can argue semantics post acquisition and just change the paperwork to say it is Nuvia work as an independent entity or the controlling entity of Qualcomm.

Given the impact on competition being less competitive if ARM win this. I can't see ARM winning this in the UK or EU, even if they win in the US. Also with ARM still being partially regulated by the UK government which blocked the Nvidia buyout, I don't see this working out for ARM at all.

edit:
If Qualcomm's revenue would drop to zero with the revoking of the license, I 'm pretty sure they would immediately be granted injunctive relief on competition grounds in the UK/EU - of ARM trying to put them out of business which is illegal even in the US - as when all is said and done this is an issue of accessing licensed tech at a fair market rate, and ARM's new licensing strategy might fly in the US, but with it being the architecture that dominates massive processor market share and them trying to over reach and trying to manipulate all their licensees, this will not fly in the UK. Even in the US courts decide fair market rate for patented tech, which this situation is no different.
 
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This smells fishy, Apple was ultra salty about Qualcomm buying Nuvia because they were led by former Apple engineers. I wouldnt put it past Apple to be petty enough to have ARM lean on Qualcomm, this is the same company that has been holding a grudge against Nvidia for almost a decade.
This is actually really unlikely

The reality is ARM has been hellbent on getting more revenue from their licensees after becoming a publicly traded company. Licensees like Apple make trillions in profits while paying ARM almost nothing for the licenses they use to make those profits
 

Sophist

Member
Surely the problem ARM have is that the new entity can argue semantics post acquisition and just change the paperwork to say it is Nuvia work as an independent entity or the controlling entity of Qualcomm.

Given the impact on competition being less competitive if ARM win this. I can't see ARM winning this in the UK or EU, even if they win in the US. Also with ARM still being partially regulated by the UK government which blocked the Nvidia buyout, I don't see this working out for ARM at all.

edit:
If Qualcomm's revenue would drop to zero with the revoking of the license, I 'm pretty sure they would immediately be granted injunctive relief on competition grounds in the UK/EU - of ARM trying to put them out of business which is illegal even in the US - as when all is said and done this is an issue of accessing licensed tech at a fair market rate, and ARM's new licensing strategy might fly in the US, but with it being the architecture that dominates massive processor market share and them trying to over reach and trying to manipulate all their licensees, this will not fly in the UK. Even in the US courts decide fair market rate for patented tech, which this situation is no different.

ARM has a strong case, actually. Nuvia breached its contract with ARM by being acquired without ARM’s consent. Qualcomm breached its contract with ARM by using ARM-based technologies developed by third parties under different Arm licenses. All of these clauses were written in the contracts of all involved parties.


On April 1, 2022, Qualcomm’s General Counsel sent Arm a letter enclosing a Nuvia representative’s termination certification. The certification acknowledged—without objection—that the Nuvia licenses had been terminated. The certification recognized the obligations upon termination, and asserted that Nuvia was in compliance. Qualcomm and Nuvia thereby conceded that termination of the Nuvia licenses was appropriate, and that the termination provisions had been triggered, are binding, and are enforceable.
 

marquimvfs

Member
This smells fishy, Apple was ultra salty about Qualcomm buying Nuvia because they were led by former Apple engineers. I wouldnt put it past Apple to be petty enough to have ARM lean on Qualcomm, this is the same company that has been holding a grudge against Nvidia for almost a decade.
I think that the filesuit got merit. Also, any grudge on Nvidia is more than justified, they fucked up almost everyone they got in business with. The only exception looks to be Nintendo.
 

PaintTinJr

Member
ARM has a strong case, actually. Nuvia breached its contract with ARM by being acquired without ARM’s consent. Qualcomm breached its contract with ARM by using ARM-based technologies developed by third parties under different Arm licenses. All of these clauses were written in the contracts of all involved parties.


On April 1, 2022, Qualcomm’s General Counsel sent Arm a letter enclosing a Nuvia representative’s termination certification. The certification acknowledged—without objection—that the Nuvia licenses had been terminated. The certification recognized the obligations upon termination, and asserted that Nuvia was in compliance. Qualcomm and Nuvia thereby conceded that termination of the Nuvia licenses was appropriate, and that the termination provisions had been triggered, are binding, and are enforceable.
But in the context of fair market competition those might as well be unenforceable EULA's.

Market competition is not served better by allowing ARM such overreach which is prohibited in patent licensing across the globe. They are putting themselves in a very bad place that will only result in the EU/UK forcing them into different licensing arrangements and this situation is not beyond the realms of ARM being renationalized in the UK with a compulsory purchase if they continue to try and subvert fair market competition.

Th UK government blocked Nvidia buying ARM and this action very much looks like the only benefactor would be Apple so is likely to draw a lot of interest from regulators as ARM manipulate the current open market which is almost certain to place any of their arguments at a starting position of -10. IMO.
 
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Sophist

Member
But in the context of fair market competition those might as well be unenforceable EULA's.

Market competition is not served better by allowing ARM such overreach which is prohibited in patent licensing across the globe. They are putting themselves in a very bad place that will only result in the EU/UK forcing them into different licensing arrangements and this situation is not beyond the realms of ARM being renationalized in the UK with a compulsory purchase if they continue to try and subvert fair market competition.

Th UK government blocked Nvidia buying ARM and this action very much looks like the only benefactor would be Apple so is likely to draw a lot of interest from regulators as ARM manipulate the current open market which is almost certain to place any of their arguments at a starting position of -10. IMO.

You should read the legal document i shared above. Nuvia told ARM that they wanted to design an ARM chip for servers. ARM gave them a special license and "preferential" support to help them develop the chip but at the condition that Nuvia couldn't be acquired without ARM consent otherwise the license automatically terminate.

Arm also provided substantial, crucial, and individualized support from Arm employees to assist Nuvia in its development of Arm-based processors for data center servers.
The licenses provided Nuvia access to specific Arm architecture, designs, intellectual property, and support in exchange for payment of licensing fees and royalties on future server products that include processor cores based on Arm’s architecture, designs, or
related intellectual property. Nuvia’s licensing fees and royalty rates reflected the anticipated scope and nature of Nuvia’s use of the Arm architecture. The licenses safeguarded Arm’s rights and expectations by prohibiting assignment without Arm’s consent, regardless of whether a contemplated assignee had its own Arm licenses. From September 2019 to early 2021, Nuvia used the technology it licensed from Arm to design and develop processor cores. Arm provided preferential support for Nuvia’s development efforts, with Arm seeking to accelerate research and development in next-generation processors for data center servers to support that sector’s transition to Arm technology.


It's not hard to understand what happened here: ARM helped Nuvia to develop their chip in exchange of future returns but Nuvia sold themselves to Qualcomm, pulling the rug under ARM feet.
 

PaintTinJr

Member
You should read the legal document i shared above. Nuvia told ARM that they wanted to design an ARM chip for servers. ARM gave them a special license and "preferential" support to help them develop the chip but at the condition that Nuvia couldn't be acquired without ARM consent otherwise the license automatically terminate.

Arm also provided substantial, crucial, and individualized support from Arm employees to assist Nuvia in its development of Arm-based processors for data center servers.
The licenses provided Nuvia access to specific Arm architecture, designs, intellectual property, and support in exchange for payment of licensing fees and royalties on future server products that include processor cores based on Arm’s architecture, designs, or
related intellectual property. Nuvia’s licensing fees and royalty rates reflected the anticipated scope and nature of Nuvia’s use of the Arm architecture. The licenses safeguarded Arm’s rights and expectations by prohibiting assignment without Arm’s consent, regardless of whether a contemplated assignee had its own Arm licenses. From September 2019 to early 2021, Nuvia used the technology it licensed from Arm to design and develop processor cores. Arm provided preferential support for Nuvia’s development efforts, with Arm seeking to accelerate research and development in next-generation processors for data center servers to support that sector’s transition to Arm technology.


It's not hard to understand what happened here: ARM helped Nuvia to develop their chip in exchange of future returns but Nuvia sold themselves to Qualcomm, pulling the rug under ARM feet.
The question is, in regards of the special place ARM hold in the market: Does any of that info matter?

Nuvia's acquisition was cleared by competition agencies after they had tried to understand the market and the Qualcomm trajectory of the acquisition relative to other major players like Apple. ARM's entire motivation here is money and they are trying to threaten to suppress Qualcomm's ability to compete, and disrupt natural market forces unless Qualcomm capitulate to their demands.

At the end of this, ARM are unlikely to have made more money from Qualcomm per chip, and Qualcomm are unlikely to have been denied the ability to compete as they currently do, and Qualcomm is unlikely to be denied the ability to license the necessary technologies at a fair market rate - as they would patented technology - which is substantially less than what ARM are asking/extorting? So IMO the only outcome here is ARM backing down or regulators forcing ARM to license on fair terms which is the current status quo minus the lawsuit.

The carried out threat of ARM removing licensing at 60days notice is likely to see Qualcomm get given a 10year license by courts/regulators.

So I honestly think that the contract terms that are unreasonable and can be used for extorting Qualcomm aren't enforceable and ARM trying to flex their contracts are going to regret it.
 
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TheKratos

Member
ARM stock is already getting slapped, more than QCOM. Crooked CEO trying to weasel out from a legal case by threatening with cancellation. Fuck around and find out.
 

Magister

Member
Does this mean that all future Samsung phones will have Exynos processors?

They already do in Europe, but this can make them slap Exynos on all future US market phone models.

Exynos is an unoptimized mess.
 

Panajev2001a

GAF's Pleasant Genius
Summary of key points from the article:
  • Arm's License Cancellation:
    • Arm is canceling Qualcomm’s architectural license, which allows Qualcomm to design chips based on Arm's intellectual property.
    • The move follows a legal dispute that began in 2022 when Arm sued Qualcomm for breach of contract and trademark infringement.
  • Potential Impact:
    • The cancellation could significantly affect Qualcomm, which generates much of its $39 billion annual revenue from processors used in Android smartphones.
    • If the cancellation holds, Qualcomm may have to halt selling products tied to the disputed technology or face legal consequences.
  • Qualcomm’s Response:
    • Qualcomm disputes Arm's actions, with a spokesperson saying, "It appears to be an attempt to disrupt the legal process, and its claim for termination is completely baseless."
    • Qualcomm remains "confident that [its] rights under its agreement with Arm will be affirmed."
  • Central Dispute: Nuvia Acquisition:
    • Arm argues that Qualcomm's acquisition of Nuvia in 2021 and the use of Nuvia’s chip designs breach its license. Arm demands Qualcomm destroy Nuvia’s pre-acquisition designs.
    • Qualcomm contends that its existing license covers Nuvia’s work.
  • Broader Industry Implications:
    • The legal battle threatens to disrupt both the smartphone and personal computing markets, as well as the operations of two key players in the semiconductor industry.
  • Shift in Strategies:
    • Under CEO Rene Haas, Arm is pushing for more value from its engineering work by offering more complete chip designs, while Qualcomm, under CEO Cristiano Amon, is moving toward more independence from Arm's technology.

Bloomberg article
In a good amount of years RISC-V will laugh (devs not so much as it might increase ISA fragmentation… think OpenGL and proprietary extensions), but in the mean time this is a great gift to AMD, Intel, and Apple :D.
 

winjer

Gold Member

Qualcomm has emerged victorious in a high-stakes trial against Arm Holdings over a disputed chip technology license. The case, which unfolded in federal court in Delaware, centered on Qualcomm's $1.4 billion acquisition of startup Nuvia in 2021 and the subsequent use of Arm's chip architecture.
Friday's jury's verdict found that Qualcomm did not violate the terms of its agreement with Arm when incorporating the acquired technology into its chips without paying a higher licensing rate. This decision has significant implications as Arm's chip designs and instruction sets are fundamental to many of the world's largest tech companies.

However, Qualcomm did not win on all counts. While the jury concluded that Qualcomm had not breached the licensing terms, they could not reach a consensus on whether Nuvia, the acquired startup, had violated its license agreement with Arm. Federal Judge Maryellen Noreika indicated that lawyers could have this unresolved issue retried later.

Cat Wow GIF
 
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