*

Arm sees its architecture as central to Qualcomm's ( QCOM ) laptop

push

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Nuvia's core designs' transfer rights questioned in court

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Williams claims minimal Arm tech in Nuvia's designs

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Qualcomm ( QCOM ) pays Arm an estimated $300M annually, potential

$50M

revenue loss claimed

By Tom Hals

WILMINGTON, Delaware, Dec 17 (Reuters) - Attorneys for

Arm and Qualcomm ( QCOM ) grilled a former

Apple executive on Tuesday about a key question for the

future of the chip industry: Who owns the intellectual property

built on top of Arm's computing architecture?

At stake in a trial in U.S. federal court in Delaware this

week is the fate of Qualcomm's ( QCOM ) push into the laptop business,

where it is helping partners such as Microsoft ( MSFT ) try to

regain ground that Windows computers lost to Apple after the

iPhone maker introduced its own custom chips.

Arm's flagship product is a computing architecture that

competes against Intel's architecture and is ubiquitous in

smartphones and increasingly used in laptops and data centers.

Competing computing architectures are the reason that, until

relatively recently, most smartphone apps did not work on most

laptops.

Massive companies like Apple design their own computing

cores based on Arm's architecture, but Arm also offers its own

off-the-shelf core designs that are used by smaller firms such

as MediaTek ( MDTTF ). Where Arm's ownership of the core designs

based on its architecture begins and ends is at the heart of the

dispute between Arm and Qualcomm ( QCOM ).

The companies disagree over whether Nuvia, a firm Qualcomm ( QCOM )

paid $1.4 billion for in 2021, had the right to transfer its

computing core designs to Qualcomm ( QCOM ) after the sale.

In U.S. federal court in Delaware on Tuesday, attorneys for

both sides pressed Gerard Williams, a former Apple engineer who

founded Nuvia in 2019, over whether Nuvia's cores were

ultimately derivatives of Arm's technology or whether Arm's

technology played only a trivial role in Nuvia's work.

Arm's attorney pressed Williams to acknowledge that the

licensing contract at the heart of the dispute covered Arm

technology and "derivatives" and "modifications" made from it.

Williams repeatedly said he did not believe the contract

meant that all of Nuvia's work was a derivative or modification

of Arm's technology, but acknowledged that was what the words on

the page appeared to say.

Daralyn Durie, the Arm attorney, pointedly asked Williams

to agree that "maybe you wouldn't say that, but that's what the

contract says."

"I wouldn't say that," Williams responded, "but I'm not a

legal expert."

Durie immediately said she was finished with her

questioning.

The exchange with Durie followed questioning by Qualcomm's ( QCOM )

attorney, who guided Williams to describe how little Arm

technology was in Qualcomm ( QCOM ) chips that power phones, laptops and

cars.

Williams said his team of developers started with Arm

architecture and was asked to estimate the amount of Arm's

technology in Nuvia's final designs. "One percent or less,"

Williams responded.

Analysts have told Reuters that Qualcomm ( QCOM ) pays Arm about $300

million per year, and evidence introduced at trial on Monday

showed Arm executives believed they were missing out on $50

million per year in additional revenue because of Qualcomm's ( QCOM )

acquisition of Nuvia.

A jury verdict could come as soon as this week in the trial,

and Qualcomm ( QCOM ) CEO Cristiano Amon also might take the witness

stand.