IT News on October 6th: According to a report by Reuters today, chip manufacturer Qualcomm and chip technology company Arm once again faced each other in court on Monday local time, with a five-day jury trial taking place at the United States District Court for the District of Delaware.
Qualcomm accuses Arm of retaining chip testing tools delivered under contract, and also accuses Arm of leaking threats to terminate an important licensing agreement in 2024 to the media, which has damaged the chip trading cooperation between Qualcomm and Meta.
Qualcomm seeks to stop paying licensing fees worth billions of dollars to Arm, with a potential duration of up to 5 years. However, Judge Maryellen Noreika is deciding whether to dismiss this portion of the contract. If she does so, Qualcomm may have to seek only smaller damages.
In the relevant trial by the judge, Noreika also heard debates regarding whether Arm conducted honest negotiations with Qualcomm over next-generation chip technology. The agreement between Qualcomm and Arm is valid until 2033.
A lawyer from Qualcomm, Karen Dunn, stated in the opening remarks that Qualcomm was on the verge of reaching an agreement with Meta at that time, but Arm notified Qualcomm of a violation of their architectural agreement and threatened to stop granting licenses. Subsequently, it is alleged that Arm leaked the notification letter to Bloomberg. Meta was concerned that Qualcomm would lose the Arm license, resulting in a reduction of $170 million in the contract value (Note from IT: The current exchange rate is approximately 1.141 billion yuan).
However, Gregg LoCascio, the lawyer for Arm, told the jury that it was actually Meta who took the initiative to shift towards the AI glasses market, reducing investment in the VR head-mounted display sector. As a result, Arm did not cause any losses to Qualcomm.
Qualcomm CEO Ammon testified during part of the court hearing on Monday. During that time, Qualcomm's lawyers repeatedly cited a chart showing that the licensing fees for Arm's Computing Architecture Version 10 (ARMv10) had increased by 1,800% compared to Version 9 (ARMv9).
During cross-examination, the lawyer for Arm asked An Meng whether she wished to adhere to the price stipulated in the 2013 framework authorization agreement, which set the patent fee ceiling for each chip (containing at least 5 CPU cores) at $1.88 (approximately 12.6 yuan according to the current exchange rate).
The lawyer from Arm stated that this protocol, which originated from the era of small smartphone chips, may be priced too low in the market in 2026, as some data center chips already have up to 288 CPU cores. The lawyer asked Ammon whether this transaction structure means that Qualcomm only needs to pay for 5 of these CPU cores, with the remaining 283 CPU cores being given for free.
Ammon replied to this: I don't think so.
Reuters said that this five-day trial marks another phase of tension between Arm and Qualcomm. Arm sued Qualcomm in 2022, accusing it of contract violations, but Qualcomm achieved a key victory in 2024.
