Question ARM lawsuit against QCOM/Nuvia !

[Thibsie]

Arm Files Lawsuit Against Qualcomm and Nuvia for Breach of License Agreements and Trademark Infringement

Arm filed a lawsuit against Qualcomm Inc. and two of its subsidiaries (“Qualcomm”) and Nuvia, Inc. (“Nuvia”) in the US District Court for the District of Delaware for breach of certain license agreements with Arm and trademark infringement.

www.arm.com

Yummy, don't you think ?

 

[Doug S]

That doesn't seem to be the case here, though, or ARM wouldn't have allowed Qualcomm to use Nuvia's IP under any circumstance. In this case, ARM is asking Qualcomm for cash.

They are not asking for cash they are asking for specific performance - the destruction of all technology created under Nuvia's ALA. They are only asking for cash incidental to the damages to compensate for the delay in Qualcomm's performance, but what they really want is for Qualcomm to destroy the Nuvia IP and be forced to re-create it from scratch. See paragraphs 68 & 69 on page 18.

Now that doesn't mean they might not accept a cash offer from Qualcomm, but they are under no obligation to do so. If the ALA terms are as ARM claims, they are fully entitled to specific performance under law.

 

[Roland00Address]

That doesn't seem to be the case here, though, or ARM wouldn't have allowed Qualcomm to use Nuvia's IP under any circumstance. In this case, ARM is asking Qualcomm for cash.

ARM gets do this if they write their contract in a successful fashion.

It may not be fair, but the ARM isa is their IP, use generic cores with fixed costs, or create your custom cores but ARM gets to determine their price prior to you printing the core and knowing its performance.

Vader and Lando it is like, but those are the rules.

 

[DrMrLordX]

They are not asking for cash they are asking for specific performance - the destruction of all technology created under Nuvia's ALA. They are only asking for cash incidental to the damages to compensate for the delay in Qualcomm's performance, but what they really want is for Qualcomm to destroy the Nuvia IP and be forced to re-create it from scratch. See paragraphs 68 & 69 on page 18.

Now that doesn't mean they might not accept a cash offer from Qualcomm, but they are under no obligation to do so. If the ALA terms are as ARM claims, they are fully entitled to specific performance under law.

I thought ARM repeatedly asked for cash during Qualcomm's acquisition of Nuvia, before filing suit?

 

[Thala]

Not really, it just has to include the term "non-transferable", and a requirement that if the license is canceled under the terms of the contract (i.e. by a transfer of ownership) then all IP created under the license must be destroyed.

I've seen contracts with both those requirements, so it wouldn't be unusual nor unenforceable.

Qualcomm did confirm that the Nuvia IP has been destroyed. They are developing cores under their own license - there was no need to transfer the Nuvia license - and Qualcomm did not ask to transfer the license either. Softbank is well aware that they have zero chance of winning this, but they know that Qualcomm needs to accept a compromise in order to not delay the release.

 

[Lodix]

Qualcomm did confirm that the Nuvia IP has been destroyed. They are developing cores under their own license - there was no need to transfer the Nuvia license - and Qualcomm did not ask to transfer the license either. Softbank is well aware that they have zero chance of winning this, but they know that Qualcomm needs to accept a compromise in order to not delay the release.

Where did Qualcomm confirm that they destroyed the Nuvia IP?

 

[Thala]

Where did Qualcomm confirm that they destroyed the Nuvia IP?

It is in the filing. In any case what Softbank tries to claim is, that the IP in upcoming products is in fact the Nuvia IP, which was developed under the Nuvia license years ago. They are trying to support their claims by quoting Qualcomm press releases, where Qualcomm used the word "Nuvia" to describe their upcoming products - that is a very weak proof if you ask me.
In addition, what they are asking for is cash.

 

[DrMrLordX]

It is in the filing. In any case what Softbank tries to claim is, that the IP in upcoming products is in fact the Nuvia IP, which was developed under the Nuvia license years ago. They are trying to support their claims by quoting Qualcomm press releases, where Qualcomm used the word "Nuvia" to describe their upcoming products - that is a very weak proof if you ask me.
In addition, what they are asking for is cash.

If Qualcomm did in fact "start from scratch" then ARM has no case. Of course Qualcomm may be doing the old "10% differentiation" trick used in dodging patents, but that might be sufficient to claim its an entirely new design forged under Qualcomm's license.

 

[Doug S]

If Qualcomm did in fact "start from scratch" then ARM has no case. Of course Qualcomm may be doing the old "10% differentiation" trick used in dodging patents, but that might be sufficient to claim its an entirely new design forged under Qualcomm's license.

A lot of ARM's argument seems to hinge on the fact that Qualcomm has never designed their own high performing core (at best they were on par with ARM designs) and the speed at which this is coming (sample chips already given to partners and Qualcomm asking them to test it for standards compliance early this year) means it can't possibly be a clean sheet design but has to be largely based on mostly complete designs acquired from Nuvia.

With chips available for testing barely a year after the acquisition is completed - and presumably significantly better performing than ARM cores which Qualcomm never managed before - it is going to be hard for Qualcomm to argue they began from scratch. Doesn't help how much they kept talking about how Nuvia was the reason they were going to have these high performance cores soon.

 

[DrMrLordX]

A lot of ARM's argument seems to hinge on the fact that Qualcomm has never designed their own high performing core (at best they were on par with ARM designs) and the speed at which this is coming (sample chips already given to partners and Qualcomm asking them to test it for standards compliance early this year) means it can't possibly be a clean sheet design but has to be largely based on mostly complete designs acquired from Nuvia.

With chips available for testing barely a year after the acquisition is completed - and presumably significantly better performing than ARM cores which Qualcomm never managed before, it is going to be hard for Qualcomm to argue they began from scratch. Doesn't help how much they kept talking about how Nuvia was the reason they were going to have these high performance cores soon.

Both of those statements may be true, but in normal IP disputes over technical designs, even the barest amount of differentiation allows the inventor to claim novelty. But again that mostly pertains to patent cases. Still, I have a hard time believing that a judge would not adhere to a similar standard.

 

[Doug S]

SemiAnalysis has a good writeup on the current status of this that catches up with subsequent court filings. ARM's position appears weaker than it initially did, though as always our view is limited since we don't have access to the ALAs.

https://semianalysis.substack.com/p/is-arm-desperate-qualcomm-claps-back

 

[moinmoin]

SemiAnalysis has a good writeup on the current status of this that catches up with subsequent court filings. ARM's position appears weaker than it initially did, though as always our view is limited since we don't have access to the ALAs.

https://semianalysis.substack.com/p/is-arm-desperate-qualcomm-claps-back

It seems overall we came pretty close to what appears to have happened there.

Have to say though I have to disagree with Dylan Patel about one (the?) crucial part the court will have to decide about:

"Qualcomm believes they are freely able to pass the Phoenix core microarchitecture between the acquired Nuvia entity and themselves, which is a very strong argument. The IP that Qualcomm acquired was the core architecture implementation, which is owned by them, not Arm."

I don't think this is a strong argument at all. On the contrary (and as some in this thread previously already suggested as I recall) Qualcomm buying Nuvia would enable circumventing Arm's licensing agreement that expressly forbids licensing custom core to others, for and to any and all licensees. That's where Arm's demand that Nuvia's designs be destroyed come from since otherwise any big rich company wanting to have some specific custom core and not able to license it could just buy its owner. And with that argument it appears Qualcomm's whole defense stands and falls.

I expect this to become the crux of the whole lawsuit.

 

[Doug S]

It seems overall we came pretty close to what appears to have happened there.

Have to say though I have to disagree with Dylan Patel about one (the?) crucial part the court will have to decide about:

"Qualcomm believes they are freely able to pass the Phoenix core microarchitecture between the acquired Nuvia entity and themselves, which is a very strong argument. The IP that Qualcomm acquired was the core architecture implementation, which is owned by them, not Arm."

I don't think this is a strong argument at all. On the contrary (and as some in this thread previously already suggested as I recall) Qualcomm buying Nuvia would enable circumventing Arm's licensing agreement that expressly forbids licensing custom core to others, for and to any and all licensees. That's where Arm's demand that Nuvia's designs be destroyed come from since otherwise any big rich company wanting to have some specific custom core and not able to license it could just buy its owner. And with that argument it appears Qualcomm's whole defense stands and falls.

I expect this to become the crux of the whole lawsuit.

It isn't clear that Qualcomm wants to license their core to third parties though. They haven't ever licensed their modems, for example, even though Apple would probably have been interested in that at some point.

I agree though that if Qualcomm does expect to do this that ARM will likely be able to prevent it since it is not permitted under Qualcomm's ALA. Actually I'm surprised Nuvia was able to negotiate such a clause, but I guess if you're willing to pay enough you can get almost any contract terms you want.

 

[moinmoin]

It isn't clear that Qualcomm wants to license their core to third parties though.

Qualcomm licensing their core to others is not the point here at all. Qualcomm wants to use Nuvia designs. Nuvia's license agreement with Arm allowed licensing its custom core at an apparently huge fee markup. That's already a big exception to usual LAs forbidding licensing custom cores altogether. Now Qualcomm buys Nuvia and pretends that way it could circumvent either the fee markup it would have to pay to Arm for licensing the custom core as agreed by Nuvia, or the inability to license a custom core outright. Qualcomm calls it a supposedly completely independent core architecture implementation owned by them, Arm calls it an implementation fully dependent on its ARM ISA. Arm as such considers it to be subject to all the Arm licensing rules which by Arm's account forbid passing ownership of custom cores from one to another company without Arm's express agreement.

The court will decide which of the two positions will fly. As the licensor Arm is in the way stronger position as it can freely set the licensing rules as long as they are legally water tight. Qualcomm as the licensee will need to prove that either it didn't break any of the rules, or Arm's own interpretation of the rules are not legally enforceable.

 

[Roland00Address]

Okay what is happening with ARM?

Not sure if I trust it, but yesterday Dylan Patel of SemiAnalysis wrote a post that was called this ”Arm Changes Business Model – OEM Partners Must Directly License From Arm”

Is there any truth to this or other sourcing? Dylan Patel says his analysis comes from documents submitted in the Arm and Qualcomm lawsuit.

 

[Doug S]

Okay what is happening with ARM?

Not sure if I trust it, but yesterday Dylan Patel of SemiAnalysis wrote a post that was called this ”Arm Changes Business Model – OEM Partners Must Directly License From Arm”

Is there any truth to this or other sourcing? Dylan Patel says his analysis comes from documents submitted in the Arm and Qualcomm lawsuit.

I'm not sure how that could work very smoothly in practice. Qualcomm is designing ARM cores in their SoCs but they aren't licensed and can't be legally used except if they are sold to an OEM who has a licensing agreement with ARM? So instead of a handful of agreements that cover the entire Android market with Qualcomm, Mediatek, Samsung, etc. now they will have hundreds? Thousands? I have no idea how many OEMs there are, but there are a lot of white label brands in places like India and China that all would have to sign a licensing deal with ARM.

I do find it poetic justice that ARM is trying to double dip in licensing similar to what Qualcomm does, but it seems like they are going to scare a lot of other ARM licensees (other than Apple, who can ignore all these shenanigans) in their attempts to bring Qualcomm to heel. Good news for RISC-V fans, I guess.

 

[Thibsie]

I'm not sure how that could work very smoothly in practice. Qualcomm is designing ARM cores in their SoCs but they aren't licensed and can't be legally used except if they are sold to an OEM who has a licensing agreement with ARM? So instead of a handful of agreements that cover the entire Android market with Qualcomm, Mediatek, Samsung, etc. now they will have hundreds? Thousands? I have no idea how many OEMs there are, but there are a lot of white label brands in places like India and China that all would have to sign a licensing deal with ARM.

I do find it poetic justice that ARM is trying to double dip in licensing similar to what Qualcomm does, but it seems like they are going to scare a lot of other ARM licensees (other than Apple, who can ignore all these shenanigans) in their attempts to bring Qualcomm to heel. Good news for RISC-V fans, I guess.

Yep, we may witness the point where Arm slowly begins to die and RiscV to rise. Would still take time though.

 

[moinmoin]

Yep, we may witness the point where Arm slowly begins to die and RiscV to rise. Would still take time though.

Seem to be mostly self-inflicted injuries by Arm that's boosting Risc-V rise. Arm must have let go all of its corporate strategists in preparation to the failed takeover by Nvidia...

 

[trivik12]

ARM is not making as much money as Qualcomm and they are the ones coming up with the IP. So they are hoping for a larger pie.

 

[Doug S]

ARM is making as much money as Qualcomm and they are the ones coming up with the IP. So they are hoping for a larger pie.

What are you talking about? Qualcomm's revenue and profits absolutely dwarfs ARM's. Qualcomm makes more profit in a quarter than ARM makes revenue in a year.

 

[trivik12]

What are you talking about? Qualcomm's revenue and profits absolutely dwarfs ARM's. Qualcomm makes more profit in a quarter than ARM makes revenue in a year.

you are right. I missed a not. That is why they are trying to get a bigger piece of pie.

 

[FlameTail]

Have you guys seen this!?

Arm Changes Business Model – OEM Partners Must Directly License From Arm

No More External GPU, NPU, or ISP’s Allowed In Arm-Based SOCs

www.semianalysis.com

 

[DrMrLordX]

Have you guys seen this!?

Yeah. It's gonna take a bit to digest the full implications of what ARM, Ltd. wants. It doesn't look good though. If Qualcomm is to be believed, ARM is telling people they can't put custom GPU IP into ARM SoCs. Instead they'll have to use some iteration of Mali or one of its successors. Qualcomm already uses Adreno over Mali, and due to a license deal they cut with AMD some time ago, Mediatek may still be able to use Radeon in their products (currently Mediatek uses Mali in their Dimensity SoCs).

 

[DeathReborn]

Yeah. It's gonna take a bit to digest the full implications of what ARM, Ltd. wants. It doesn't look good though. If Qualcomm is to be believed, ARM is telling people they can't put custom GPU IP into ARM SoCs. Instead they'll have to use some iteration of Mali or one of its successors. Qualcomm already uses Adreno over Mali, and due to a license deal they cut with AMD some time ago, Mediatek may still be able to use Radeon in their products (currently Mediatek uses Mali in their Dimensity SoCs).

They can use custom graphics etc if they use custom CPU cores, it's only if they use stock ARM cores that they have to use the rest of the ARM IP in the SoC. What we need is detail as to how much do you have to customise the cores to meet the criteria of being custom.

 

[DrMrLordX]

They can use custom graphics etc if they use custom CPU cores, it's only if they use stock ARM cores that they have to use the rest of the ARM IP in the SoC. What we need is detail as to how much do you have to customise the cores to meet the criteria of being custom.

Nearly everyone has reverted to stock ARM cores. Apple is the only outlier among the big ARM producers of the present day. Unless you count Nvidia but honestly I wouldn't, at least not for their also-ran consumer chips.

 

[podspi]

The x86 and RISC-V vendors must be so happy about this news.

ARM is really shooting its ecosystem in the foot here. Any company considering building its own cores are going to be pushed away from using ARM as the instruction set, if this is how they treat licensees. I get it that it is difficult for them to receive lower license payments under ALA, but the solution to that was to improve their own cores and roadmap.

And requiring OEMs to get licenses instead of the SoC developers? Good luck. Who wants to operate under that kind of system? Nobody wants to design and produce a product that requires your potential customers to get a license from somebody else. I am not sure how that would even work, legally.