WILMINGTON, Delaware – Lawyers for Arm and Qualcomm questioned a former Apple executive on Tuesday regarding a key issue in the chip industry: Who owns the intellectual property derived from Arm’s computing architecture?
The ongoing trial in U.S. federal court in Delaware could determine the future of Qualcomm’s ambitions in the laptop market, where it is supporting companies like Microsoft in an effort to reclaim ground lost to Apple after the iPhone maker introduced its own custom chips. Arm’s flagship product is a computing architecture that competes with Intel’s, and is widely used in smartphones, laptops, and data centers. These competing architectures are partly why most smartphone apps were not compatible with laptops until recently.
While major companies like Apple design their own computing cores based on Arm\’s architecture, Arm also offers off-the-shelf core designs that are used by smaller firms, such as MediaTek. The core of the dispute between Arm and Qualcomm centers on where Arm’s ownership of the core designs begins and ends. Specifically, the companies are in disagreement over whether Nuvia, a firm Qualcomm purchased for $1.4 billion in 2021, had the right to transfer its computing core designs to Qualcomm after the acquisition.
During the trial, attorneys for both companies pressed Gerard Williams, a former Apple engineer who founded Nuvia in 2019, on whether Nuvia’s cores were derivatives of Arm’s technology or whether Arm’s technology only played a minor role in Nuvia’s work. Arm’s lawyer challenged Williams to acknowledge that the licensing contract central to the dispute covered both Arm’s technology and any \”derivatives\” or \”modifications\” made from it.
Williams argued that he did not believe Nuvia’s work was entirely a derivative of Arm’s technology, though he conceded that the contract’s wording seemed to suggest otherwise. When asked by Arm\’s attorney, Daralyn Durie, to confirm that \”maybe you wouldn’t say that, but that’s what the contract says,\” Williams responded, \”I wouldn’t say that, but I’m not a legal expert.\”
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The questioning by Qualcomm\’s attorney later focused on how little Arm technology was involved in Qualcomm’s chips, which are used in phones, laptops, and cars. Williams testified that his team of developers started with Arm’s architecture but estimated that “one percent or less” of Arm’s technology remained in Nuvia’s final designs.
Analysts have estimated that Qualcomm pays Arm approximately $300 million annually, and trial evidence introduced on Monday showed that Arm executives believed Qualcomm’s acquisition of Nuvia cost them about $50 million in lost revenue each year. A jury verdict could be reached as soon as this week, with Qualcomm CEO Cristiano Amon possibly taking the witness stand.
