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Jury deliberates on Arm, Qulacomm license dispute

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Arm says Qualcomm ( QCOM ) violated a licensing agreement

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Qualcomm ( QCOM ) argues Arm using suit to gain smartphone leverage

(Recasts headline, updates throughout)

By Tom Hals

Dec 19 (Reuters) - A license dispute between Arm

Holdings and Qualcomm ( QCOM ) went before a

jury on Thursday after attorneys from both sides completed

closing arguments.

The jury in a U.S. federal court in Delaware is

considering whether Qualcomm ( QCOM ) or Nuvia, a startup Qualcomm ( QCOM )

purchased for $1.4 billion in 2021, breached a license agreement

with U.K.-based Arm, which supplies intellectual property to

both firms.

The case could upend Qualcomm's ( QCOM ) push into the PC market with

a chip meant to rival Apple ( AAPL ) and Intel ( INTC ) on

speed.

During closing arguments, Qualcomm's ( QCOM ) legal team urged the

eight-member jury to find the chipmaker had not breached a

contract with Arm, warning that the British chip designer was

using its lawsuit to try to gain leverage over makers of smart

phone chips.

Qualcomm ( QCOM ) lawyer Karen Dunn told jurors that Arm is hoping to

force Qualcomm ( QCOM ) to destroy its recently launched high-speed chips

for AI laptops and then threaten similar license partners who

build mobile phone chips off its technology.

"You can bet the world is watching here," Dunn said to the

jurors in her closing argument.

Arm's lawyer Daralyn Durie warned the jury such allegations

were distractions from the issue they must decide: whether

Qualcomm ( QCOM ) and Nuvia, the start-up it acquired in 2021, breached

license agreements.

"It's an effort to get you to think about things that have

nothing to do with the breach of the contract," Durie said.

In 2022, Arm said Nuvia and Qualcomm ( QCOM ) had breached Arm's

contract for Nuvia technology and in response the British

company terminated the agreement, which obligated Nuvia to

destroy the tech built based on that technology. Qualcomm ( QCOM ) argues

that the Nuvia chip designs in question were created

independently from Arm.

Arm's attorney Durie said if Qualcomm ( QCOM ) didn't want to be

forced to destroy its microprocessors it should have complied

with the terms of its license.

"The decision to go ahead and use all this stuff without a

license, that was their choice," Durie said. "Now they are

saying that was a bad decision and they are unhappy. But that

was their decision not ours."

The jury met for three and a half hours without reaching a

verdict and will resume deliberations on Friday morning.

In the trial that started on Monday, Arm sought to

portray Qualcomm's ( QCOM ) moves as a first-of-its-kind flouting of

standard contractual terms the British company had used

successfully for decades and that would have upended its

business model.

At stake for Qualcomm ( QCOM ) was annual savings of up to $1.4

billion by using the Nuvia designs while claiming the work was

done at Qualcomm ( QCOM ), which would carry a less expensive licensing

deal, Arm attorneys said.

Qualcomm ( QCOM ) claimed Arm misled it into disbanding its own

design team, increasing its dependence on Arm technology and

then trying to raise royalty rates as much as 400%. It also

pointed to internal Arm documents that it said showed Arm was

plotting to get into the chip making business while undermining

Qualcomm ( QCOM ).

Arm's Chief Executive Rene Haas dismissed those allegations.