Qualcomm Wins Jury Verdict Defeating Arm Chip Licensing Claims

Paul, Weiss won a decisive jury verdict for software and semiconductor giant Qualcomm Incorporated in a closely watched breach of contract suit brought by Arm Ltd., a UK-based semiconductor and software design company owned by SoftBank, over a technology license agreement with Qualcomm subsidiary NUVIA. Following a four-day trial in the U.S. District Court for the District of Delaware, a jury found that Qualcomm did not breach the terms of NUVIA's chip architecture licensing agreement with Arm and that its chips were properly licensed under Qualcomm's own license with Arm. The verdict paves the way for Qualcomm to continue to supply its custom central processing units (CPUs) worldwide without interruption, and to expand into other markets as planned, bringing world-class technology to consumers.

Arm, which has long licensed computer architecture that enables computer software and hardware to communicate, sued Qualcomm in 2022, alleging that, after Qualcomm bought a startup called NUVIA in 2021, it breached NUVIA's architecture license agreement with Arm by continuing to use and refusing to destroy Arm-compliant CPUs that Qualcomm had developed. Arm also claimed broad rights over technology with which 70% of the world's computer technology is compliant, including CPUs used, for example, in mobile phones, laptops, desktops, servers and cars.

Qualcomm filed counterclaims requesting a declaratory judgment that it has not breached any agreements with Arm and that its products incorporating some NUVIA-innovated technology are validly licensed under Qualcomm's own license with Arm.

The case was tried at a breakneck pace, with closing arguments delivered after just three days of evidence. The jury deliberated for 10 hours, ultimately finding Qualcomm had not breached NUVIA's agreement with Arm and that all of the products at issue were licensed. The jury was deadlocked on the question of NUVIA's breach.

While this case has significant financial implications for the parties, the impact of the verdict is much broader, with potentially sweeping implications for the protection and generation of innovative technology.

The Paul, Weiss team was led by litigation partners Karen Dunn, William Isaacson, Catherine Nyarady, Erin Morgan, Melissa Zappala and William Marks, and included partner Michael Holston and counsel Conrad Scott.