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On Thursday, a Delaware federal jury ruled that Arm violated its license agreement with Qualcomm and unlawfully interfered with Qualcomm’s business relationship with Meta Platforms. However, the jury awarded Qualcomm only $2 in damages ($1 for each of the two proven claims).
The jury found that Arm violated its Architectural License Agreement (ALA) by withholding critical software patches and chip-testing tools used to verify Qualcomm’s custom Oryon CPU cores.
Qualcomm claimed that it was on the verge of a deal with Meta in 2024, when Arm allegedly leaked to Bloomberg News that Qualcomm violated a license agreement, delaying the agreement with Meta. The jury ruled in Qualcomm’s favor after a five-day trial.
Shares of Arm fell about 1% after the decision, while shares of Qualcomm rose 2%.
“We are pleased that the jury found that Arm breached its long-standing Architectural License Agreement (ALA) with Qualcomm, failed to uphold its obligations and acted knowingly to disrupt Qualcomm’s business.“, Qualcomm said in a statement.
Qualcomm added that “Along with Qualcomm’s previous court victory, this result further demonstrates Arm’s broad intentions to harm Qualcomm and its ecosystem.“The company said it will stay”focuses on developing and delivering industry-leading semiconductor products including our Oryon CPUs to customers and consumers worldwide“.
Arm is also happy with the jury’s decision. The company is pleased with the fact that the jury ruled in its favor on four claims, while awarding Qualcomm just $2 in total damages. This confirms, according to Arm, the merit of the company’s arguments in the case.
“Despite Qualcomm’s prosecution of this case in an attempt to deprive Arm of billions of dollars under our license agreements, the jury’s verdict confirms that Arm operated in good faith under its technology license agreement and its award of only two dollars confirms the merit of Arm’s arguments in the case.. ” Arm said in a statement.
The relationship between these two semiconductor giants has deteriorated since SoftBank gained control of Arm in 2016 and Arm expanded to develop its own chips.
Although the immediate financial payout in this case is negligible, this jury verdict gives Qualcomm great leverage in the next phase of trials overseen by US District Judge Maryellen Noreika.
Qualcomm is pursuing a contract provision that argues that because Arm violated the agreement, Qualcomm should be legally allowed to pay Arm for five years, which is worth billions of dollars. Arm argued that the five-year loyalty penalty was unenforceable.
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