On Friday, October 9, a high-stakes federal trial in Wilmington, Delaware, heads to a jury, pitting chipmaker Qualcomm against chip technology supplier Arm Holdings over allegations of contract breaches and intentional business sabotage.
The five-day legal showdown in the U.S. District Court for the District of Delaware represents the second trial in two years between the two companies. At the heart of the dispute is the deterioration of the business relationship that followed SoftBank Group Corp’s 2016 acquisition of Arm, a pivot that moved Arm from licensing the technology needed to make chips to selling chips of its own.
The Core Allegations and Financial Stakes
Qualcomm’s license for Arm’s computing architecture runs until 2033, but the immediate friction centers on terms for new versions of Arm’s architecture. Qualcomm is asking the jury to find that Arm violated its contractual obligations by withholding software patches and design tools.
Furthermore, Qualcomm claims Arm breached an agreement designed to ensure Qualcomm paid within 10% of the lowest price for Arm’s processor designs. Beyond technical blockades, Qualcomm alleges that Arm actively tried to torpedo its dealings with Meta Platforms. Specifically, Qualcomm asserts that Arm leaked a 2024 notification letter—claiming Qualcomm was in breach of a key license agreement—to Bloomberg.
Representing Qualcomm, attorney Karen Dunn outlined the gravity of the situation during her opening statement on Monday. “It’s really bad because Qualcomm’s entire chip business depends on Arm and on Arm honoring its contract and honoring its promises,” Dunn told the court.
Defense Strategy and Related Court Proceedings
Arm’s legal team mounted a defense centered on a claim that Qualcomm had not suffered any harm. Attorney Gregg LoCascio told the jury on Monday that Qualcomm “were not harmed in the least,” characterizing the lawsuit as an attempt to exert leverage as the two fought over licensing terms.
While the jury weighs the breach of contract and intentional interference claims, US District Judge Maryellen Noreika is simultaneously overseeing a related bench trial. This separate proceeding addresses whether Arm is negotiating in good faith over those terms, though a ruling on that could come well after the jury delivers its verdict.
The current litigation shares striking similarities with a 2024 trial overseen by Judge Noreika, in which Arm failed to convince a jury that Qualcomm had breached its licensing agreement with Arm. Both trials featured testimony from Arm CEO Rene Haas and Qualcomm CEO Cristiano Amon.
As the jury prepares to deliberate, a significant legal question remains unresolved. Qualcomm requested that Judge Noreika rule prior to the trial on a clause in the licensing agreements meant that Qualcomm could stop paying royalties for five years if the contract were breached. The judge has not issued her ruling, while Arm maintains that the royalty penalty is unenforceable.
