ARM’s court loss – analysis
ARM has lost its court case against Qualcomm for license infringement marks a key moment for the IP industry in several ways.
Late on Friday a jury ruled against ARM on two of the three counts, and was undecided on a third charge. The case came after Qualcomm bought high performance chip startup Nuvia to use its architectural license. The court case highlighted a range of issues with IP licensing and ARM’s moves to boost its revenue.
“The Delaware jury’s decision in favour of Qualcomm marks a pivotal moment in semiconductor industry licensing practices,” said Malik Saadi, Vice President at global technology intelligence firm ABI Research.
“This verdict effectively modernizes semiconductor IP licensing for an era of rapid innovation, establishing that foundational architecture rights must coexist with implementers’ freedom to innovate,” he said.
“Technical testimony proved crucial, particularly the clear distinction between architecture licensing and implementation, showing only 1% commonality between Arm RTL and actual implementations. This technical clarity helped separate ARM’s legitimate IP rights from overreach in claiming ownership of independently developed innovations.”
“The reasonableness of this verdict stems from multiple factors. First, ARM’s demand to destroy technology without seeking monetary damages appeared disproportionate, especially given the $50m claimed revenue impact. Second, internal Arm documents acknowledging Qualcomm’s “bombproof” contract undermined their position. Third, evidence of Arm’s strategic shifts – including potential moves into chip design and system company licensing, plus 300-400% royalty increases – suggested the case was more about business strategy than IP protection. The performance gap between Apple (20% improvement per generation) and Arm (10%) further justified Qualcomm’s need for independent innovation,” he said.
Qualcomm bought Nuvia in 2021 for $1.4bn and has employed a team of 300 engineers working on the Oryon high performance cores that were the result of the acquisition.
“The jury has vindicated Qualcomm’s right to innovate and affirmed that all the Qualcomm products at issue in the case are protected by Qualcomm’s contract with ARM,” said Qualcomm. “We will continue to develop performance-leading, world class products that benefit consumers worldwide, with our incredible Oryon ARM-compliant custom CPUs.
However trial judge Maryellen Noreika encouraged ARM and Qualcomm to mediate their dispute. “I don’t think either side had a clear victory or would have had a clear victory if this case is tried again,” she said.
However ARM has instigated the removal of the Qualcomm architectural licenses which is set to come into effect shortly, and is considering an retrial on the third issue on whether Nuvia broke the terms of its license.
ARM said it is considering a retrial. “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,” it said.
“For ARM, while seemingly a setback, this verdict might prove beneficial long-term,” said Saadi at ABI. “The ruling preserves Arm’s core licensing business while encouraging them to focus on innovation rather than aggressive licensing tactics,” said Saadi at ABI.
“It sets a framework for IP providers like Arm to maintain profitable licensing businesses. At the same time, technology companies can confidently invest in advanced development, ultimately benefiting the entire industry through continued innovation and competition.”
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