Ex-Nuvia founder claims Qualcomm chips use minimal Arm tech in high-stakes trial

[Skye Jacobs]

What just happened? Gerard Williams III, one of the lead developers behind Oryon and a variety of Apple's processors, has provided crucial testimony in a trial over whether Qualcomm's existing agreements with Arm extend to Nuvia's chip designs post-acquisition. The jury verdict could potentially reshape the semiconductor industry's competitive landscape and redefine the boundaries of intellectual property in chip design.

In a high-stakes trial unfolding in US federal court in Delaware, former Apple executive Gerard Williams III took the stand to address a crucial question: Who owns the intellectual property built upon Arm's computing architecture? The case pits Arm against Qualcomm and could determine the future of Qualcomm's foray into the laptop market.

At the heart of the controversy are the Qualcomm Oryon general-purpose cores, found in Snapdragon X processors. These cores, based on Arm's Armv8 instruction set architecture (ISA), are the result of Qualcomm's $1.4 billion acquisition of Nuvia in 2021. During cross-examination, Williams, a co-founder of Nuvia and one of the lead developers behind Oryon, made a startling revelation about the extent of Arm technology in the final design developed by Nuvia.

When asked to estimate the amount, he stated, "One percent or less." His response underscores the crux of the dispute: whether Nuvia's cores are derivatives of Arm's technology or largely independent innovations.

The origins of this legal battle trace back to Nuvia's founding in 2019. The company acquired two non-transferrable licenses from Arm: the Technology License Agreement (TLA) and Architecture License Agreement (ALA). These licenses allowed Nuvia to rework existing cores and design custom cores, respectively. Williams emphasized that the team developed its cores from scratch, with minimal use of Arm's physical IP.

Qualcomm's acquisition of Nuvia in 2021 sparked the current legal dispute. Arm requested that Qualcomm renegotiate the licensing terms, a demand Qualcomm refused, asserting that its own ALA covered its subsidiary Nuvia. The situation escalated when Arm revoked Nuvia's licenses and, in October, terminated Qualcomm's Architecture License Agreement.

During the trial, attorneys for both sides grilled Williams on the nature of Nuvia's innovations and the role of Arm's technology in their development. Arm's attorney, Daralyn Durie, pressed Williams to acknowledge that the licensing contract covered Arm technology and its "derivatives" and "modifications." Williams, while admitting the contract's wording, maintained his belief that not all of Nuvia's work was derivative of Arm's technology.

The outcome of this trial could have far-reaching implications for licensing practices and IP ownership in the semiconductor industry. It may also impact Qualcomm's efforts to compete in the laptop market, where it aims to challenge Apple's dominance with custom chips.

As the trial progresses, industry analysts are closely watching, noting that Qualcomm reportedly pays Arm about $300 million annually. Evidence introduced at trial suggested that Arm executives believed they were missing out on an additional $50 million per year due to Qualcomm's acquisition of Nuvia.

The trial is not over, although a jury verdict is expected soon. Another key witness, Qualcomm CEO Cristiano Amon, is potentially taking the witness stand first.

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Ex-Nuvia founder claims Qualcomm chips use minimal Arm tech in high-stakes trial

 

[noblody]

ARM is trying to make money, so I do not understand why they aren't seeking monetary compensation for the alleged infringement and ask for the destruction of the designs. This is a clear indication of bullying not good faith. ARM should hope they lose this trial, because if they win they will lose a lot more than the trust of their partners which they already lost. The industry will lose because it will mean that all tech that incorporates ARM technology is nontransferable. The end result will be that new tech will be pushed to other architectures.

 

[Theinsanegamer]

Yeah, it only uses 1%. that 1% is the ISA. It is a very important 1%, one that breaks the chip if removed.....

kinda like how the brain stem is only 1% of your body weight.....

ARM is trying to make money, so I do not understand why they aren't seeking monetary compensation for the alleged infringement and ask for the destruction of the designs. This is a clear indication of bullying not good faith. ARM should hope they lose this trial, because if they win they will lose a lot more than the trust of their partners which they already lost. The industry will lose because it will mean that all tech that incorporates ARM technology is nontransferable. The end result will be that new tech will be pushed to other architectures.

Allegedly they did, they asked qualcomm for $50 million after the acquisition to upgrade their license and qualcomm told them to eat dirt.

 

[DanteSmith]

This is ridiculous on so many levels that it shouldn't even be mentioned.

 

[Tran Bronstein]

This is a basic but still fascinating legal case (Disclaimer: I have a law degree but don't practice for a living) but I want to be clear this is really a contract dispute as opposed to an intellectual property dispute. The IP dispute, while very important, is being used to try and sidestep the contract dispute itself. I'll simplify it as best I can:

1. ARM gave Qualcomm a license to use its tech for $300M. (not exact of course, let's go with it to keep numbers simple)
2. ARM gave Nuvia, a much smaller company, a separate license to use its tech for let's say $50M.
3. Qualcomm buys Nuvia so they now own it outright.
4. ARM says Qualcomm owes it the additional $50M Nuvia had to pay them for their license.
5. Qualcomm says Nuvia is a part of Qualcomm and so they only owe $300M under their original agreement. Eat our shorts.
6. ARM says F to the U then and cancels the licensing agreements with BOTH companies. And since the contracts are now cancelled, Qualcomm is not allowed to use Nuvia's chips which are based upon licensed ARM technology which would effectively kill their business.
7. But hold up, per this article Nuvia claims that their design only uses 1% or less of ARM's technology and 99% or more is new. So this doesn't fall under the prior licensing agreement terms.

So the legal IP turn on this is:
1. If Qualcommm created some new tech but it was based, however small, on ARM's previously created tech, can Qualcomm really claim it as 100% their own original creation?
2. If not, who owns what percentage of it? If ARM is truly 1% or less of the new tech but are deemed to have ownership of it, is that 1% or less ownership enough to make it fall under the original contracts which are now cancelled?

I'm really fascinated to see how this one eventually turns out. It has potentially chilling effects on business contracts and the advancement of technology in the future.

 

[Watzupken]

I think the question will be more like if that supposed less then 1% ARM IP is removed, will the product still be working? If ARM is not required, I don’t think Nuvia needed to get a license from ARM to begin with. I don’t think it is a big problem and could have been avoided if they had discussed this with ARM early when considering the acquisition. But of course that did not happen which led to this.

 

[Axeia]

So... Time to replace that 1% with Risc-V and give ARM the middle finger?

 

[Tran Bronstein]

I think the question will be more like if that supposed less then 1% ARM IP is removed, will the product still be working? If ARM is not required, I don’t think Nuvia needed to get a license from ARM to begin with. I don’t think it is a big problem and could have been avoided if they had discussed this with ARM early when considering the acquisition. But of course that did not happen which led to this.

Sorry I didn't catch this before the holidays. Thinking strictly as a bloodsucking greedy lawyer, let's say that this turns out to be the case. My next question would be, then why was it put there in the first place? I agree with you they should have discussed with ARM but the relationship was probably entirely broken at that point.