Discussion ARM vs Qualcomm: The Lawsuit Begins

[FlameTail]

The lawsuit will begin in about 10 hours from now. It will last five days, from Monday through to Friday.

Decided to make this seperate thread, so that the discussion about the lawsuit does not pollute other threads.

Edit: u/-protonsandneutrons- has an excellent post on r/hardware covering the topic;

https://www.reddit.com/r/hardware/comments/1hflya7/arm_v_qualcomm_us_federal_court_trial_begins_today

 

[NTMBK]

Suing one of your biggest customers (and your best chance for breaking into a new market) sure seems like a dumb strategy.

 

[Win2012R2]

seems like a dumb strategy

They would not have any customers left if Qualcomm gets away with it.

 

[Thibsie]

They would not have any customers left if Qualcomm gets away with it.

Let's see : Nvidia, AMD, Intel, all cloud custom cores, Amazon, Qualcomm, Mediatek, Apple, Rockchip, Marvell.

A bunch of those are architectural licensee of course. Any others ?

The whole question of this lawsuit is : is the license transferable in case of acquisition or not.

 

[Win2012R2]

Yes, and why won't those wealthy customers not do what Qualcomm allegedly did then?

ARM is trying to squeeze more money so customers can either accept it, take the RISCy route or the much easier Qualcomm HighWay (if they win).

 

[Thibsie]

If that the case, Arm just needs to go more expensive with their architectural license.

 

[Win2012R2]

If that the case, Arm just needs to go more expensive with their architectural license.

They did, and guess what Qualcomm allegedly did instead of getting it?

 

[FlameTail]

They did, and guess what Qualcomm allegedly did instead of getting it?

Which is what?

Qualcomm already holds their own ALA, which they acquired way before the Nuvia acquisition.

 

[Win2012R2]

Qualcomm already holds their own ALA, which they acquired way before the Nuvia acquisition.

AFAIK they had different (v8 I think) license, but Nuvia had new (more expensive) V9, which is the crux of the matter.

I am not a lawyer but from some reading on the issue at hand it seems that Qualcomm thinks that they can transfer to themselves ARM license that Nuvia had, and that license according to ARM isn't transferrable. ARM appears to (sensibly) give good terms for startups in order to encourage them and big firms like Qualcomm are expected to pay proper, so acquiring a company to appropriate non-transferrable license is a no-no, many licenses have change of control clauses too so even if Qualcomm made all that stuff under Nuvia umbrella then I'd expect that to fail in court too.

If I had to predict things I'd say Qualcomm will lose this one, but you never know in courts, most likely settle as it happens in most commercial disputes with such heavyweights, still Qualcomm is in the wrong here for sure.

 

[FlameTail]

AFAIK they had different (v8 I think) license, but Nuvia had new (more expensive) V9, which is the crux of the matter.

Nuvia had an ARMv8 ALA.

Qualcomm had both an ARMv8 and ARMv9 ALA, iirc.

I am not a lawyer but from some reading on the issue at hand it seems that Qualcomm thinks that they can transfer to themselves ARM license that Nuvia had,

Why would they do that? They don't need tbe Nuvia license. They have their own ALA that covers a much broader scope than the Nuvia ALA did.

ARM stated that Qualcomm couldn't transfer the technology developed under the Nuvia ALA to their own ALA, and Qualcomm should destroy all Nuvia IP. Court filings indicate that Qualcomm acquiesced, sequestered the Nuvia IP, and redesigned their Oryon core to remove the Nuvia IP from it. ARM alleges that this isn't enough, because there are a ton of similarities between the Nuvia Phoenix core and Oryon Phoenix core (Who could've thought? Both those cores are designed by the same engineers).

I admit my understanding of this legal kerfuffle is limited, and that isn't even the only thing in dispute. We need someone who has read the court documents to cut through the nonsense and present the facts.

@ikjadoon Where are you?

 

[FlameTail]

But if they settle what will I do with this huge bag of popcorn I made?

There has been no settlement yet, and it seems like the trial has begun and will proceed to it's bitter end.

I hope you didn't throw away all that popcorn. Give us some too!

 

[Win2012R2]

it seems like the trial has begun and will proceed to it's bitter end

Sadly they rarely do end properly.

there are a ton of similarities

Both those cores are designed by the same engineers

Well, that's the problem for sure, it wasn't clean room work, Qualcomm misses out on precedent that allowed to clone IBM PCs.

They have their own ALA that covers a much broader scope than the Nuvia ALA did

I guess we'll find out soon, my money on ARM to win. Oh and ARM cancelled their licenses, so they will have none...

 

[LightningDust]

Yes, and why won't those wealthy customers not do what Qualcomm allegedly did then?

Because the cost of developing a competitive high-performance microarchitecture absolutely dwarfs the cost of an ALA. "No customers left if an ALA is transferrable" is a ridiculous assertion.

 

[Win2012R2]

Because the cost of developing a competitive high-performance microarchitecture absolutely dwarfs the cost of an ALA.

From your list - "Nvidia, AMD, Intel, all cloud custom cores, Amazon, Qualcomm, Mediatek, Apple, Rockchip, Marvell."

All of them got money to do it, apart from maybe Intel, and it takes only 1 or 2 to do it and license it to others cutting off ARM, it's an existential issue for ARM.

 

[FlameTail]

Everyone should read these for an understanding of the lawsuit and where things stand:

2 months ago

https://www.reddit.com/r/hardware/comments/1gfucc9/arm_vs_qualcomm_all_summary_judgments_motions

Today

https://www.reddit.com/r/hardware/comments/1hflya7/arm_v_qualcomm_us_federal_court_trial_begins_today

 

[LightningDust]

From your list - "Nvidia, AMD, Intel, all cloud custom cores, Amazon, Qualcomm, Mediatek, Apple, Rockchip, Marvell."

All of them got money to do it, apart from maybe Intel, and it takes only 1 or 2 to do it and license it to others cutting off ARM, it's an existential issue for ARM.

Cores developed under ALA aren't generally licensable. (They were, once upon a time. Faraday did it.)

 

[Win2012R2]

ARM cancelled Qualcomm's ALA, nuclear strike move but it is what it is.

 

[FlameTail]

ARM cancelled Qualcomm's ALA, nuclear strike move but it is what it is.

Source?

ARM didn't actaully cancel their ALA. They sent a notice that they will do it in the 60 days. IIRC, that would be sometime near the end of the trial, which would be Friday.

 

[Win2012R2]

Yes, notice to cancel, should be up in a week. Unless they settle ASAP it will be cancelled, though Qualcomm probably can get injunction in courts to stop it in the US, but they are selling all over the world, so that's not enough.

would be sometime near the end of the trial

Trial to end in a week? Well, decision won't be done that quick, plus it will be appealed by either side unless they settle.

 

[FlameTail]

Some interesting tweets about the strength of ARM:

https://twitter.com/x/status/1868709991655653582

 

[NTMBK]

Some interesting tweets about the strength of ARM:

https://twitter.com/x/status/1868709991655653582

View attachment 113330View attachment 113331

ARM rely massively on the uplift from Apple, as well as other big tech companies like Google. If they keep throwing their weight around and others get serious about switching ISAs they're in trouble, regardless of what they're saying here. ARM just aren't big enough to go it alone and maintain that ecosystem solo.

If big royalty payments dry up and developers focus their attention elsewhere, then they start to look a lot more like Imagination and MIPs.

(Hypothetically speaking. This would require anyone to actually be annoyed enough to switch.)

 

[ikjadoon]

Nuvia had an ARMv8 ALA.

Qualcomm had both an ARMv8 and ARMv9 ALA, iirc.

Why would they do that? They don't need tbe Nuvia license. They have their own ALA that covers a much broader scope than the Nuvia ALA did.

ARM stated that Qualcomm couldn't transfer the technology developed under the Nuvia ALA to their own ALA, and Qualcomm should destroy all Nuvia IP. Court filings indicate that Qualcomm acquiesced, sequestered the Nuvia IP, and redesigned their Oryon core to remove the Nuvia IP from it. ARM alleges that this isn't enough, because there are a ton of similarities between the Nuvia Phoenix core and Oryon Phoenix core (Who could've thought? Both those cores are designed by the same engineers).

I admit my understanding of this legal kerfuffle is limited, and that isn't even the only thing in dispute. We need someone who has read the court documents to cut through the nonsense and present the facts.

@ikjadoon Where are you?

Time has flown by. Thank you for making a dedicated thread. I saw a CNBC story pop up in my feed and completely forgot this is the week.

I haven't read the latest documents yet, as I thought there were some (Court-ordered) settlement negotiations, but those fell through. And, definitely do not trust Google's AI Overview. It fabricated a fake settlement sometime back in May 2024?!



From the CNBC story:

Opening arguments have begun. Arm CEO Rene Haas may testify on Monday or Tuesday; Qualcomm's CEO Cristiano Amon may testify on Wednesday. Some predictions (settlement, revenue hits, etc.) but hard to tell what is fair and what is unfounded.

From the Reuters story: https://www.reuters.com/legal/arm-qualcomm-trial-set-begin-over-chip-contract-dispute-2024-12-16/

During opening arguments, attorneys for both companies displayed on a screen for jurors images of contracts, emails and internal corporate chats with key language highlighted.
"We are here asking you to assist us with enforcing our rights," Daralyn Durie, an attorney for Arm, told the jury.

She walked the jury through the basics of license and royalty agreements, and showed them emails that she said would prove Qualcomm knew it was using Arm technology without permission.
Qualcomm's attorney told jurors the evidence would show that Arm was under pressure to raise royalty rates, while at the same time its technology was falling further and further behind.
"It’s very sad actually," said Karen Dunn, an attorney for Qualcomm. "They are here because they want to own the future and they don’t want Qualcomm to compete with them.”

Expected witnesses at the one-week trial include Arm Chief Executive Rene Haas, Qualcomm CEO Cristiano Amon and Nuvia founder Gerard Williams, who was a senior executive in Apple's (AAPL.O), opens new tab chip unit and is currently a Qualcomm vice president.

From Court Listener (holy wow, tons of updates): https://www.courtlistener.com/docket/64938776/arm-ltd-v-qualcomm-inc/

The reddit thread above covers much of it. Some other juicy things I've found:

- QC may be deposing another senior Arm engineer, Jeff Defilippi
- I honestly don't know how a jury is expected to understand all these records in the scant 11 hours per side.
- The Judge also ruled on Limine Motions (to exclude certain evidence): rulings seem to split evenly, perhaps a slight edge to Arm (e.g., Arm was able to exclude one more motion's worth of evidence vs Qualcomm)

Why would they do that? They don't need tbe Nuvia license. They have their own ALA that covers a much broader scope than the Nuvia ALA did.

ARM stated that Qualcomm couldn't transfer the technology developed under the Nuvia ALA to their own ALA, and Qualcomm should destroy all Nuvia IP. Court filings indicate that Qualcomm acquiesced, sequestered the Nuvia IP, and redesigned their Oryon core to remove the Nuvia IP from it. ARM alleges that this isn't enough, because there are a ton of similarities between the Nuvia Phoenix core and Oryon Phoenix core (Who could've thought? Both those cores are designed by the same engineers).

I think you've got it right. The only two other things re: NUVIA's ALA are noted in Arm's Reply to Qualcomm's Defence: https://storage.courtlistener.com/recap/gov.uscourts.ded.79892/gov.uscourts.ded.79892.21.0.pdf

At a minimum (even if everything else was hunky dory between Qualcomm & Arm), Arm alleges Qualcomm still breached the NUVIA ALA by not abiding by its change of control provisions, para 226, and that consent was required:

ARM Claim: "Qualcomm acquired Nuvia even though the Nuvia ALA required Arm’s consent prior to any assignment of the Nuvia ALA, which the ALA defined to include any other company’s acquisition of Nuvia, and Arm did not consent to the assignment."

Qualcomm says consent was not necessary, but they did apply for it nonetheless / anyways. Arm says because Qualcomm applied for it, that counts as an admission that they knew consent was required. Arm also notes in the same document that "derivatives" are included, so is Oryon a derivative of Phoenix (first blush might be yes, but the devil is in the details) or is Oryon different enough to not be a derivative?

ARM Claim: "First, pursuant to an express, independent obligation under Nuvia’s ALA, the relevant Nuvia technology, including the Phoenix core, can no longer be used and must be destroyed. This destruction obligation extends to all derivatives or embodiments of Arm technology generated at Nuvia based on Nuvia’s ALA. The Nuvia ALA leaves no doubt that the destruction obligation extends to processor cores, such as Nuvia’s Phoenix core, which is the basis for Qualcomm’s proposed future products. Defendants must discontinue any use of products derived from or embodying technology provided by Arm under the Nuvia ALA."

Thus, I think how Qualcomm used / managed the NUVIA ALA requirements vs Arm's understanding of the NUVIA ALA will still be important.

 

[Nothingness]

ARM rely massively on the uplift from Apple, as well as other big tech companies like Google. If they keep throwing their weight around and others get serious about switching ISAs they're in trouble, regardless of what they're saying here. ARM just aren't big enough to go it alone and maintain that ecosystem solo.

I think you're underestimating the number of embedded and Android developers, it likely dwarves the number of iOS/macOS devs. Apple surely helped Arm a lot, but they are unlikely to represent the majority of Arm ecosystem.

 

[ikjadoon]

Some more quotes, from Bloomberg:

Bloomberg - Are you a robot?

Arm-Qualcomm Contract Fight Threatens to Upend Chip Industry

Arm Holdings Plc’s legal dispute with Qualcomm Inc. is being argued before a federal jury in Delaware this week, pitting two of the world’s most influential chipmakers against each other in an intellectual property case that threatens to roil the technology industry.

www.bnnbloomberg.ca

“They wanted to take the code, but they didn’t want to pay for it,” Arm lawyer Daralyn Durie told jurors during opening arguments Monday. The trial is expected to last a week.

Qualcomm lawyer Karen Dunn said the company had its own license to use Arm technology, and that it had always made it a practice to “respect contracts.” Internal files at Arm showed executives there acknowledged Qualcomm’s licensing contract was “bombproof,” she said.

 

[digitaldreamer]

My understanding was that the license agreement that Nuvia and ARM originally agreed to was based on Nuvia selling server chips. The agreement was tailored to that expectation (read - low volume). When Qualcomm bought Nuvia, it was expected that they renegotiate the terms with ARM now that Qualcomm was going to repurpose the IP to sell chips for phones/laptops/desktops (much higher volume).

I find it puzzling that a licensee of ARM is refusing to renegotiate, as if they hold the cards in this battle. ARM, as owner of the IP, has the right to dictate the terms of the licenses, just like Qualcomm knows it has the right to dictate the terms of their licenses, no matter how unfair it appears to be (to Apple). Don't know why they think they can have it both ways.