Jury Finds Arm Breached Qualcomm License, Awards Nominal $2 in Damages

A federal jury in Delaware found on October 13 that Arm breached its long-standing licensing agreement with Qualcomm. The jury also ruled that Arm intentionally interfered with Qualcomm’s business relationship with Meta, according to Reuters. Despite these findings, the jury awarded Qualcomm only nominal damages of $1 for each claim, totaling $2.

The jury determined that Arm failed to provide required software patches and tools for its chip designs. However, it sided with Arm on other breach allegations brought by Qualcomm. Regarding the Meta dispute, the jury found Arm’s interference to be both intentional and negligent. Qualcomm argued that Arm leaked information to Bloomberg News about a licensing breach, which allegedly delayed a deal with Meta in 2024.

Legal Implications and Next Steps

Qualcomm stated it was gratified that the jury found Arm breached the Architectural License Agreement and failed to honor its commitments. Arm countered that the verdict confirmed it operated in good faith and that the minimal award validated its arguments. US District Judge Maryellen Noreika must now settle several remaining disputes in the next phase of the case, Reuters reported.

The judge could rule that Qualcomm may stop paying Arm royalties for five years, a penalty outlined in the licensing agreement. Those royalties could be worth billions of dollars. Arm argues that courts cannot enforce this five-year penalty clause. This decision will determine the financial impact of the breach finding.

Industry Context and Future Disputes

Qualcomm may use the interference finding in another dispute regarding the next version of Arm’s technology. Qualcomm claims Arm refused to negotiate in good faith on the new technology, which the judge must also decide. The losing side in these upcoming decisions would likely appeal, according to Reuters. This marks the second trial between the two companies in two years, with the latest lasting five days.

Their relationship soured after SoftBank took control of Arm in 2016, Reuters reported. Arm has since shifted from solely licensing chip technology to selling its own chips, such as its in-house AGI CPU. Qualcomm remains focused on its own products, including Oryon CPUs, and unveiled latest Snapdragon chips in September, splitting its flagship phone chip into two versions.

What should you do?

Security and technology professionals should monitor official statements from Arm and Qualcomm for updates on royalty payments and licensing terms. Track court filings regarding the five-year royalty penalty and the good-faith negotiation dispute. Watch for any changes in Arm’s software patch distribution or tool availability. Review current licensing agreements for similar penalty clauses or interference provisions.

What to do and how to stay safe: Arm

• Monitor official statements from Arm and Qualcomm for updates on royalty payments and licensing terms.
• Track court filings regarding the five-year royalty penalty and the good-faith negotiation dispute.
• Watch for any changes in Arm’s software patch distribution or tool availability for chip designs.
• Review current licensing agreements for similar penalty clauses or provisions regarding business interference.

General security guidance from the Threat Times newsroom. It is not confirmed advice from the organisations named in this story.

Frequently asked questions

How much money did the jury award to Qualcomm?

The jury awarded Qualcomm a total of $2 in damages, consisting of $1 for the breach of contract and $1 for intentional interference.

Did the jury find Arm acted intentionally?

Yes, the jury found that Arm intentionally interfered with Qualcomm’s business with Meta and that this interference was also negligent.

What is the potential financial penalty for Arm?

Judge Maryellen Noreika could rule that Qualcomm may stop paying Arm royalties for five years, which could amount to billions of dollars.