What just happened? GlobalFoundries acquired IBM's chip manufacturing business in 2014, and the two companies worked together for a while. Now, the multinational corporation says Big Blue is playing dirty with intellectual properties it has no rights to give anyone. The New York company has filed suit.

GlobalFoundries recently filed a lawsuit against IBM, saying the company illegally shared trade secrets and confidential intellectual property with Rapidus. Big Blue is working with the Japanese consortium to develop cutting-edge microchip technology on a two-nanometer manufacturing process. GlobalFoundries says IBM is infringing its IP.

GlobalFoundries stated that IBM is "unjustly receiving potentially hundreds of millions of dollars in licensing income and other benefits." Initially, IBM collaborated with Intel on a new-generation chip technology in 2021, which according to GlobalFoundries, is yet another infringement of its IP rights.

In a written statement sent to Reuters, IBM denied its former partner's allegations stating that GlobalFoundries filed a "meritless lawsuit" after a court previously rejected the company's attempt to "dismiss IBM's legitimate fraud and breach of contract claims." Intel and Rapidus, the two other companies involved in the GlobalFoundries lawsuit, have provided no comment.

GlobalFoundries and IBM worked together on the chip technology for decades, and the former had exclusive licensing rights on the IP since 2015. The company seeks monetary compensation, punitive damages, and an injunction against IBM. Furthermore, besides spilling its trade secrets to competitors, IBM is seemingly trying to recruit GlobalFoundries engineers at an accelerated pace after partnering with Rapidus in December 2022.

Rapidus is a joint initiative by Sony, NEC, and other major technology companies backed by Japanese state authorities. It is a national strategic effort for Tokyo to regain prominence in the chip manufacturing business through cooperation with US players in the industry. Japan aims to ensure that its car makers and IT companies have enough components in the supply chain to avoid new chip shortages in the future.

GlobalFoundries already tried to sue IBM in 2021, when Big Blue claimed the chip foundry owed $2.5 billion in damages. GlobalFoundries asked a judge to dismiss the contract breach accusation. That lawsuit is still ongoing.