British chip designer unhappy with how one of its key customers is using lucrative blueprints

Updated Arm is suing Qualcomm, one of its key customers, in a row over the latter's Nuvia custom CPU cores.

The Softbank-owned British chip designer filed suit [PDF] against Qualcomm today in a US federal district court in Delaware.

Arm has accused Qualcomm of being in breach of its licenses, and wants the American giant to fulfill its obligations under those agreements, such as destroying its Nuvia CPU designs, plus cough up compensation.

How did we get here?

Back in 2019, Nuvia emerged as a startup formed by semiconductor veterans, including the former chief architect of Apple's iPhone chips, to design server microprocessors. To achieve this, Nuvia obtained from Arm a special architectural license, which allowed it to create its own custom high-end Arm-compatible CPU cores. Nuvia also licensed Arm's standard off-the-shelf designs to drop into its chips.

Then in 2021, Qualcomm bought Nuvia for $1.4 billion. This was seen as a move by Qualcomm to bring in designs and expertise to create or customize Arm CPU cores to better compete against its rivals. It was speculated that Qualcomm could use Nuvia's blueprints in server chips or adapt them for mobile devices.

According to Arm, though, the licenses it granted Nuvia could not be transferred to and used by its new parent Qualcomm without Arm's permission. Arm says Qualcomm did not, even after months of negotiations, obtain this consent, and that Qualcomm appeared to be focused on putting Nuvia's custom CPU designs into its own line of chips without this permission. 

That led to Arm terminating its licenses with Nuvia in early 2022, requiring Qualcomm to destroy and stop using Nuvia's designs derived from those agreements. It's claimed that Qualcomm's top lawyer wrote to Arm confirming it would abide by the termination.

However, says Arm, it appeared from subsequent press reports that Qualcomm may not have destroyed the core designs and still intended to use the blueprints and technology it acquired with Nuvia for its personal device and server chips, allegedly in a breach of contract with Arm. 

What's interesting is that Qualcomm has an Armv9 architectural license with Arm, which it can use to design custom cores. Qualcomm also licenses off-the-shelf standard Arm cores, and puts these to use in its widely used Snapdragon family of mobile processors. And at the same time, Arm is unhappy that Qualcomm intends to use Nuvia's custom CPU designs in PCs, phones, cars, servers, and so on, which one might think Qualcomm has permission to do, given all the licenses it holds.

Check the fine print

But Arm says individual licenses are specific to individual licensees. For example, according to people familiar with the matter, Nuvia's architectural license was tied to server processors, whereas Qualcomm's architectural license today applies to personal devices. Arm claimed in its lawsuit that Nuvia's licence was not automatically transferable. Qualcomm should have negotiated and obtained permission to use Nuvia's CPU core designs and didn't, it is alleged, and is now being sued.

"Qualcomm effectively seeks to circumvent Arm’s licensing model," the lawsuit states.

"Qualcomm’s improper acquisition of the relevant Nuvia technology in violation of Arm’s standard provisions threatens to harm Arm’s position in the ecosystem of Arm-based devices, harm Arm’s reputation as an intellectual property owner and technology developer whose licenses must be respected, and embolden other companies to likewise harm Arm’s reasonable business expectations in issuing its licenses."

It also occurs to us that Qualcomm at one point was designing its own Arm server chips, and then gave up on the idea, then Arm started offering and licensing out its Neoverse server-grade CPU core designs, then Qualcomm snapped up Nuvia and got hold of its own Arm server processor designs.

In a statement, Arm said:

Qualcomm, which months ago was rumored to be interested in buying a stake in Arm after Nvidia failed to acquire the Brit biz, was not ready to comment at time of publishing. ®

Updated to add

Qualcomm has responded to Arm's lawsuit with a statement by Ann Chaplin, its general counsel: