Delaware jury finds Arm breached Qualcomm license, awards $2

A federal jury in Delaware found on Tuesday that Arm Holdings breached a licensing agreement with Qualcomm and intentionally interfered with the chipmaker’s business relationship with Meta Platforms. According to court records, the jury awarded Qualcomm nominal damages of just $2.

The verdict followed a five-day trial, the second in two years between the companies. The trial highlighted the deterioration of their business relationship after SoftBank Group acquired control of Arm in 2016 and Arm shifted from licensing technology to selling chips of its own.

Jury Findings and Damages

The jury determined that Arm breached its obligation to provide software patches and tools for its designs. However, the jury found for Arm on five other breach allegations brought by Qualcomm.

Regarding the interference claim, the jury found that Arm intentionally and negligently interfered with Qualcomm’s relations with Meta. Qualcomm claimed it had been on the cusp of a deal with Meta in 2024 when Arm allegedly leaked to Bloomberg News that Qualcomm had breached a licensing agreement, delaying the Meta agreement. The jury awarded a nominal $1 for each of the two findings, totaling $2.

Company Reactions

Both companies welcomed aspects of the verdict, which leaves some key issues unresolved.

“We are gratified that the jury found Arm breached its long-standing Architectural License Agreement (ALA) with Qualcomm, failed to honor its commitments, and intentionally acted to disrupt Qualcomm’s businesses,” Qualcomm said in a statement.

Arm said that “despite Qualcomm’s pursuit of this case in an attempt to deprive Arm of billions of dollars under our license agreements, the jury’s verdict confirms that Arm operated in good faith under its technology license agreement and its award of only two dollars confirms the merit of Arm’s arguments in the case.”

Unresolved Legal Issues

The findings keep open Qualcomm’s claims ahead of the lawsuit’s next phase, in which US District Judge Maryellen Noreika must resolve several disputes. The breach finding leaves open the possibility that Noreika could rule that Qualcomm can stop paying royalties to Arm for five years, potentially worth billions of dollars. Arm has argued the five-year royalty penalty, which is contained in a clause in the licensing agreement, is unenforceable.

The business interference finding by the jury could be used by Qualcomm to support its narrative that Arm refused to negotiate in good faith for Arm’s next version of its technology, which the judge also must resolve. The losing side in those decisions would likely appeal.

Market Reaction

Shares of Arm were down 1% following the verdict, while shares of Qualcomm rose 1%. Qualcomm’s stock was down slightly from gains of around 2.4% before the verdict.

Why it matters

The verdict marks a symbolic legal victory for Qualcomm in a dispute that has stretched across multiple courtrooms since 2022. While the monetary damages are negligible, the jury's findings on breach and interference provide legal reinforcement for Qualcomm's position in ongoing negotiations and potential future rulings regarding royalty payments and licensing terms. The case underscores the shifting dynamics in the chip industry, where traditional licensing relationships are being tested as companies like Arm move into selling their own processors.

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Sources

• cnbc.com: Delaware jury awards Qualcomm $2 in damages, finds Arm breached license agreement
• kfgo.com: Delaware jury awards Qualcomm $2 in damages, finds Arm breached license agreement | The Mighty 790 KFGO | KFGO
• thehindu.com: Delaware jury awards Qualcomm $2 in damages, finds Arm breached license agreement - The Hindu
• srnnews.com: Delaware jury awards Qualcomm $2 in damages, finds Arm breached license agreement - SRN News
• finance.biggo.com: Delaware Jury Finds Arm Breached Qualcomm License Pact, Awards $2 in Damages — BigGo Finance

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.