SAN FRANCISCO, Aug 31 (Reuters) - Chip technology firm Arm
Ltd, which is owned by Softbank Group Corp, on
Wednesday said it had sued Qualcomm Inc and Qualcomm's
recently acquired chip design firm Nuvia Inc for breach of
license agreements and trademark infringement.
Arm is seeking an injunction that would require Qualcomm to
destroy designs developed under Nuvias license agreements with
Arm. Arm alleged its approval was needed before these could be
transferred to Qualcomm.
Qualcomm, which acquired Nuvia for $1.4 billion last year,
said Arm has no right to interfere with Qualcomms or NUVIA's
innovations. "Arms complaint ignores the fact that Qualcomm has
broad, well-established license rights covering its
custom-designed CPUs, and we are confident those rights will be
affirmed, said Ann Chaplin, General Counsel of Qualcomm in a
If Arm's effort is successful it would essentially unwind
one of Qualcomm's biggest strategic acquisitions in recent
The lawsuit represents a major break between Qualcomm and
Arm, one of Qualcomm's most important technology partners.
Qualcomm has relied on Arm since it stopped designing its own
custom computing cores. But in recent years, the companies have
been at odds.
Some inside Qualcomm have privately complained that Arms
pace of innovation is slackening, causing Qualcomms chips to
fall behind Apples processors in performance.
Qualcomm bought Nuvia, founded by former Apple chip
architects, to reboot its efforts to make custom computing cores
that would be different from standard Arm designs used by rivals
such as Taiwan chip designer MediaTek Inc..
One of Qualcomm's first goals with Nuvia's technology is to
challenge Intel Corp and Advanced Micro Devices Inc
. in the PC and laptop markets which they now dominate.
Qualcomm acquired Nuvia shortly after Apple ditched Intel to
begin using its own chips, which are also based on Arm
technology, in its Mac laptops.
Apple's move reinvigorated Mac sales, and Qualcomm CEO
Cristiano Amon told Reuters he wanted to use Nuvia's Arm-based
designs to do the same thing for the Windows-based laptop
market. Arm would still make more money because Qualcomm pays it
a royalty on each chip it sells that uses its technology. But it
is possible the royalty rates could be lower under Nuvia's deal
The arrangement highlights how much the two companies depend
on each other, said Bob O'Donnell of TECHnalysis Research
"Qualcomms opportunity moving forward with the PC (and
potentially server) business is utterly dependent on Nuvia
designs, and Nuvia is the primary means by which Arm can get
into Windows PCs. So the companies really need to partner well
if they want to have a meaningful impact on the PC market," he
The deal was seen as a way for Qualcomm to lessen its
reliance on Arm. In the past, most of Qualcomm's chips have used
computing cores licensed directly from Arm, while Nuvia's cores
use Arm's underlying architecture but are custom designs.
For Qualcomm, using more custom core designs - a move that
Apple has also made - could lower some licensing costs to Arm in
the short term and make it easier to move to a rival
architecture in the longer term.
A source close to Arm said that its licenses with Qualcomm
were not in dispute and that only technology developed under
Nuvia's licenses was being contested in the lawsuit.
(Reporting By Jane Lanhee Lee and Stephen Ellis; Editing by
Nick Zieminski and David Gregorio)