Qualcomm-Arm Contract Dispute: Jury to Resume Deliberations Next Week

The jury in Qualcomm’s legal battle against chip technology company Arm Holdings failed to reach a verdict on Friday, leaving key questions about alleged licensing violations and interference with Qualcomm’s business dealings unanswered. Jurors are expected to resume deliberations on Tuesday. The five-day trial, held in federal court in Wilmington, Delaware, marks the second major courtroom confrontation between the companies in two years. Their relationship has deteriorated since SoftBank Group acquired control of Arm in 2016, particularly as Arm expanded its business strategy beyond licensing chip technology to developing and selling its own chips.

At the centre of the dispute is Qualcomm’s licensing agreement, which allows the company to use Arm’s computing architecture through 2033. The outcome could influence negotiations over the terms governing future versions of Arm’s technology. Qualcomm has accused Arm of breaching contractual obligations by withholding software patches and design tools. It also alleges that Arm violated a pricing arrangement intended to ensure Qualcomm paid no more than 10% above the lowest price offered for Arm’s processor designs.

Another major allegation concerns Qualcomm’s business relationship with Meta Platforms. Qualcomm claims Arm attempted to undermine those dealings by leaking a 2024 letter to Bloomberg that accused Qualcomm of violating a key licensing agreement. Arm disputes Qualcomm’s claims. Arm’s lawyers have argued that Qualcomm has not suffered any actual damage from the alleged actions. They have portrayed the lawsuit as an effort by Qualcomm to gain leverage in the companies’ wider dispute over licensing terms.

A separate proceeding before US District Judge Maryellen Noreika is examining whether Arm has negotiated those terms in good faith. A decision in that matter may take longer than the jury’s verdict. The current dispute follows a 2024 trial in which Arm failed to persuade a jury that Qualcomm had breached its licensing agreement. Both proceedings have featured testimony from Arm CEO Rene Haas and Qualcomm CEO Cristiano Amon. During opening arguments, Qualcomm lawyer Karen Dunn stressed the importance of the contractual relationship, arguing that the company’s chip business relies heavily on Arm honouring its commitments. Arm attorney Gregg LoCascio countered that Qualcomm had suffered no harm.

Qualcomm had also asked the judge to rule before trial that a contractual provision could allow it to stop paying royalties for five years if Arm breached the agreement. Noreika has yet to issue a ruling on the request, while Arm maintains that the proposed royalty penalty is unenforceable. The jury’s forthcoming decision could shape the next stage of the companies’ legal and commercial relationship, particularly as they negotiate access to the technology underpinning Qualcomm’s future chip development.