News Arm vs. Qualcomm trial begins — Arm demands that the patent-infringing Nuvia designs be destroyed

[michaelmantion]

Apple was helping Acorn develop the ARM architecture before ARM Ltd. even existed as a company, and was a significant investor in the early days of ARM. Supposedly ARM hates it and wants Apple to pay more, but Apple is grandfathered in on a deal that

The thing is that Nuvia’s IP had contractual terms and conditions attached to it, including royalties. Qualcomm seems to believe then in purchasing the company they inherit the IP and can move it under their more preferential terms, while extinguishing the purchased company’s agreements attached to that IP. If you buy a company you usually get it all, the good (IP) and the bad (contract obligations), so Qualcomm needs to have a really good loophole up their sleeve to explain how they get one without the other.

Asking to destroy everything seems like ARM playing hardball, but Qualcomm offering a one-time $ 50m seems like it may be seen by ARM as a lowball based on how game-changing this core was talked up to be and the potential loss of the licensed core business. ARM is definitely attempting to shake down Qualcomm, but Qualcomm seems to have put themselves in a vulnerable position by acquiring a company with non-transferable licensing and putting that IP into all their products before the legal disputes cleared.

I think a reasonable person thinks if you buy Toyota completely that you get the IP they designed regardless of whom they may have partnered with. I would like to read the actual contracts but have yet to find them. The jury seems to agree that if you buy a company you get their IP. I would like to know why some jury members think Nuvia violated the license by selling their entire company and IP. Regardless the Jury decided that QCOM is properly licensed to use ARM IP and that QCOM is the owner of Nuvia IP and free to do what it wants.

One thing is for sure I would not sign a contract with ARM unless the leadership changes and they clearly explain that they were wrong to think they can control the sale companies and their IP.

 

[michaelmantion]

The trial is now over and I suppose questions about Arm canceling Qualcomm's license become real loud:

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www.reuters.com

Based on the jury opinion, it appears that QCOM acted in good faith and ARM would be responsible for any damages resulting from canceling its design contract.

My guess is ARM doesn't want to give up the revenue from their largest partner. Regardless ARM needs to go. RISC-V is a reasonable alternative.

 

[thestryker]

Thanks for the summary! What happens when the jury fails to reach a verdict on one of the claims? Does it trigger a retrial for just that claim (if ARM wants to pursue the matter)?

Retrial would definitely be required, but the judge also indicated they didn't think it would go any better and suggested the two companies figure out a solution other than more litigation.

 

[jlake3]

I think a reasonable person thinks if you buy Toyota completely that you get the IP they designed regardless of whom they may have partnered with. I would like to read the actual contracts but have yet to find them. The jury seems to agree that if you buy a company you get their IP. I would like to know why some jury members think Nuvia violated the license by selling their entire company and IP. Regardless the Jury decided that QCOM is properly licensed to use ARM IP and that QCOM is the owner of Nuvia IP and free to do what it wants.

One thing is for sure I would not sign a contract with ARM unless the leadership changes and they clearly explain that they were wrong to think they can control the sale companies and their IP.

Apparently the jury decided that Qualcomm is in the clear, but the thing is that when you acquire a company that partnered with someone else to develop IP, you are usually bound to the terms of the partnership that they originally agreed to. The Nuvia IP that Qualcomm is most interested in is a derivative of ARM IP, and therefore was not 100% "theirs" to do anything they wanted with.

In the automotive space, the more relevant example would be buying Fiskar. Fiskar may have developed the software for the Ocean, but it's built on top IP from others and is tangled up with it, and therefore Fiskar cannot simply open-source the entire software stack of the car and neither could anyone who buys the company. You could build more Oceans, you could further develop the Ocean, but you don't just "get" all the IP required to build an Ocean from top to bottom with no restrictions.

And if you were deal with ARM and insist that you won't sign a contract that includes any restrictions on the sale of your company or any ARM-derivative IP your company designs, expect them to price that license WAY out of the price range of a startup, because they're going to assume that if your designs end up being any good you'll just get acquired by an existing licensee with lower royalty rates.