Arm Holdings is terminating an architectural license agreement with Qualcomm that allows the latter to utilize intellectual property for chip design, as reported by Bloomberg News. The decision comes amidst an ongoing legal dispute between the two companies.
Arm has issued a 60-day notice to Qualcomm regarding the cancellation of the licensing agreement, which enables Qualcomm to develop its own chips based on standards owned by Arm. UK-based Arm, majority-owned by SoftBank Group of Japan, filed a lawsuit against Qualcomm in 2022 for not engaging in negotiations for a new license following its acquisition of Nuvia.
Arm previously stated that the design intended for Microsoft’s Copilot+ laptops is directly derived from Nuvia’s chip, leading to the cancellation of the license for these chips.
In response, a Qualcomm spokesperson mentioned, “This is more of the same from ARM – more unfounded threats designed to strongarm a longtime partner, interfere with our performance-leading CPUs, and increase royalty rates regardless of the broad rights under our architecture license.” The spokesperson continued, “With a trial fast approaching in December, Arm’s desperate ploy appears to be an attempt to disrupt the legal process, and its claim for termination is completely baseless. We are confident that Qualcomm’s rights under its agreement with Arm will be affirmed. Arm’s anticompetitive conduct will not be tolerated.”
Arm chose not to provide a comment on the report. The legal battle between the two tech giants is set to commence in federal court in Delaware in December.
If Arm emerges victorious in the litigation, Qualcomm and its approximately 20 partners, including Microsoft, may have to cease shipments of the new laptops. This outcome could essentially reverse one of Qualcomm’s significant strategic acquisitions in recent years.
Despite the public dispute between the companies, which heavily rely on each other for revenue and profit, some investors and analysts anticipate a settlement well before the trial.