Qualcomm beats Arm in high-stakes licensing dispute, yet walks away with just $2

On Thursday, a Delaware federal jury ruled that Arm breached its licensing agreement with Qualcomm and unlawfully interfered with Qualcomm’s business relationship with Meta Platforms. However, the jury awarded Qualcomm just $2 in damages ($1 for each of the two proven claims).

The jury found that Arm breached its Architectural License Agreement (ALA) by withholding critical software patches and chip-testing tools required to verify Qualcomm’s custom Oryon CPU cores.

Qualcomm claimed that 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 agreement with Meta. The jury concluded this in Qualcomm’s favor after a five-day trial.

Arm’s shares fell about 1% following the decision, while shares of Qualcomm rose by 2%.

“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,” said Qualcomm in a statement.

Qualcomm added that “Together with Qualcomm’s prior court victory, this outcome further exposes Arm’s broader intentions to harm Qualcomm and its ecosystem.” The company said it remains “focused on developing and delivering industry-leading semiconductor products including our Oryon CPUs to customers and consumers worldwide.”

Arm is also pleased with the jury’s decision. The company is happy about the fact that the jury ruled in its favor on four claims, while awarding Qualcomm just $2 in total damages. That, according to Arm, confirms the merit of the company’s arguments in the case.

“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. ” said Arm in a statement.

The relationship between these two semiconductor giants has deteriorated since SoftBank acquired control of Arm in 2016 and Arm expanded into developing its own chips.

Though the immediate financial payout is negligible in this case, this jury verdict gives Qualcomm a great leverage heading into the next phase of litigation overseen by US District Judge Maryellen Noreika.

Qualcomm is pursuing a contract provision arguing that because Arm breached the agreement, Qualcomm should be legally permitted to stop paying to Arm for five years, which could be worth billions of dollars. Arm has argued that the five-year royalty penalty is unenforceable.

Stay tuned for more updates. You can check our News section for latest stories or join our Telegram channel to get instant alerts.