ARM withdraws CPU complaint against Qualcomm, continues litigation against Nuvia

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Processor developer ARM retracts the accusation that Qualcomm is deliberately developing high-end processors based on ARM and advertising them as such without being authorized to do so. A US jury ruled in December that Qualcomm had the correct license. ARM is apparently not appealing. The British company has now withdrawn its formal information about Qualcomm's alleged license infringement. This does not mean that the dispute is over.

Because, as heise online was able to find out, ARM is still taking legal action against Qualcomm subsidiary Nuvia. The jury only "acquitted" Qualcomm; they were unable to reach a decision on the question of whether Nuvia had violated its former ARM license. ARM may therefore reopen this part of the court proceedings in the first instance and would like to do so.

The world of ARM licenses

To understand the legal dispute properly, it helps to understand the licenses that ARM grants. The company develops processor designs but does not manufacture them itself, instead leaving this to third parties. ARM generally concludes a Technology License Agreement (TLA) with these third parties. This allows the processors to be manufactured with only minor deviations from ARM's specifications.

ARM rarely concludes more comprehensive Architecture License Agreements (ALA). These allow the licensee to further develop selected ARM processor designs. ARM provides support for this work, but there is no guarantee of success. If the further development is successful, the licensee may manufacture the corresponding processor cores and sell them using the ARM brand name. These rights may not be transferred to third parties, not even in the event of a change of ownership of the licensee.

Nuvia and Qualcomm

Qualcomm has such an architecture license, but discontinued the in-house development based on it in 2018. In 2019, former Apple and Google chip developers founded the company Nuvia, which also solved an ALA and further developed ARM processors. In 2021, Qualcomm acquired Nuvia and is continuing its work – not on the basis of the Nuvia license, which expired in 2022, but by relying on its own, much older ALA.

This bothers ARM, which would like to collect new, higher license fees, but Qualcomm won't pay them. So ARM sued Qualcomm, one of its biggest customers, in the US Federal District Court for Delaware. In the USA, there can be juries in civil proceedings, as in this case(Arm v Qualcomm et al, Ref. 1:22-cv-01146).

The jury had to answer three questions:

1. Did ARM prove that Nuvia infringed the architectural license?
2. Did ARM prove that Qualcomm violated the terms of Nuvia's license?
3. Did Qualcomm prove that its architectural license covered the CPU designs it acquired with Nuvia?

On the second and third questions, the decision was made shortly before Christmas in Qualcomm's favor. ARM could appeal. However, jury decisions in the US are considered decisions of fact, and federal appellate courts generally do not review them. ARM cannot therefore simply present the verdict as incorrect, but would have to show, for example, that errors by the judge misled the jury. This is difficult and obviously not planned.

On the other hand, ARM would like to have the first, unanswered question discussed in a new courtroom trial before the same federal district court with a new jury. The allegations against Nuvia are not part of Qualcomm's formal notice of alleged license infringement, which has now been withdrawn. This is because it is not about Qualcomm's ALA, but about the license that expired in 2022, which ARM later granted to Nuvia.

Quarterly figures

Both ARM and Qualcomm published financial figures on Wednesday. For Qualcomm, the three months to December 29, 2024 were the first quarter of the 2025 financial year. 11.7 billion US dollars in revenue is a new record and 17 percent more than a year earlier. Operating profit increased by 21 percent to 3.6 billion dollars and pre-tax profit by 23 percent to 3.6 billion dollars.

Qualcomm's operating cash flow even jumped by 56 percent to 4.6 billion dollars. However, the fact that the increase is so high is due to the fact that Qualcomm had to pay one billion dollars more in taxes a year ago than it had set aside in provisions. This time, however, the company was able to release provisions amounting to a quarter of a billion dollars, as the figures show. Qualcomm shares fell more than two percent on Thursday.

ARM is already reporting the third quarter of its 2025 financial year, with revenue up 19 percent to 983 million dollars and operating profit up 31 percent to 175 million dollars. Operating cash flow rose even more strongly, by 36 percent, to 423 million dollars. Pre-tax profit even jumped by 84 percent to 268 million dollars. And thanks to a lower tax burden, ARM can celebrate an almost tripled net profit of 252 million dollars. Nevertheless, ARM shares fell by more than three percent on Thursday. ARM is majority-owned by the Japanese group Softbank, but has been listed on the stock exchange again since 2023.

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