Summary Qualcomm and Arm return to court over alleged contract breaches, royalties, leaked licensing threats, chip testing tools and potential billions in damages.
WILMINGTON, Delaware (Reuters) - Chipmaker Qualcomm and chip technology firm Arm Holdings, which have been locked in a long-running dispute, will return to court on Monday, with Qualcomm accusing Arm of withholding chip-testing tools required under their contract.
Qualcomm also alleges that Arm leaked to the media its 2024 threat to terminate a key licensing agreement, damaging negotiations for a chip deal between Qualcomm and Meta Platforms.
In the lawsuit before a US federal court in Delaware, Qualcomm, one of Arm's largest customers, is seeking to stop paying royalties to Arm for up to five years. The payments could be worth billions of dollars.
However, Judge Maryellen Noreika is considering whether to strike that provision from the contract, which could limit Qualcomm to seeking a smaller amount of damages.
Arm, owned by Japan's SoftBank Group, has denied breaching the contract and argued that it did not cause damage to Qualcomm's chip deals, which it described as speculative.
Arm has also argued that Qualcomm cannot seek damages over the alleged leak of the termination letter because Qualcomm itself leaked non-public details of antitrust investigations involving Arm to the media.
The five-day jury trial marks another stage in the contentious relationship between the two companies.
Arm sued Qualcomm in 2022, alleging that Qualcomm had breached its contracts. Qualcomm secured a key victory in 2024 when a jury trial ended without a verdict after jurors failed to reach agreement.
In a related bench trial, Judge Noreika will also hear arguments over whether Arm negotiated in good faith with Qualcomm for the next version of Arm's chip technology. Qualcomm's agreement with Arm runs through 2033.
Qualcomm is a major supplier of chips for Android smartphones but has expanded into other areas, including data centre chips.
Arm has for decades supplied fundamental chip-design technology to Qualcomm and other chipmakers, including Nvidia. However, Arm has increasingly become a competitor to those customers by developing and releasing chips of its own.
Reporting by Tom Hals in Wilmington, Delaware, and Max Cherney and Stephen Nellis in San Francisco; Editing by Edwina Gibbs
