Jury Deliberates High-Stakes Arm vs. Qualcomm Trial: Key Insights from Closing Arguments

The ongoing legal battle between chipmaking giant Qualcomm and British semiconductor designer Arm Holdings reached a critical juncture this week as the jury began deliberations following heated closing arguments in a U.S. federal court in Delaware. At the heart of the case is a contract dispute centered on licensing agreements, with potentially far-reaching implications for the tech industry.

The Case in Brief

The dispute stems from Qualcomm's 2021 acquisition of Nuvia, a startup it purchased for $1.4 billion. Arm claims that Nuvia violated its licensing agreements, requiring Qualcomm to destroy chip designs derived from those technologies. Qualcomm, however, contends that its designs were developed independently, and the lawsuit is Arm's attempt to gain undue leverage over mobile and PC chip manufacturers.

Closing Arguments

During closing arguments, Qualcomm's lawyer Karen Dunn accused Arm of using the case to disrupt Qualcomm’s advancements in high-speed AI laptop chips and to intimidate other licensees. "You can bet the world is watching here," Dunn emphasized, framing Arm's actions as a strategic ploy to gain market control.

On the other side, Arm's attorney Daralyn Durie urged jurors to focus solely on the alleged contractual breach, asserting that Qualcomm knowingly flouted licensing terms. Durie emphasized, "The decision to go ahead and use all this stuff without a license—that was their choice."

Broader Implications

This case could have profound repercussions for the semiconductor industry, particularly as Qualcomm seeks to expand into the PC market with chips designed to compete directly with Apple and Intel. At stake for Qualcomm are billions in potential savings tied to its use of Nuvia designs under a less expensive licensing structure.

For Arm, the trial represents a critical defense of its licensing model, which has been foundational to its success in the semiconductor ecosystem. Arm contends that Qualcomm's actions risk undermining the integrity of its longstanding business model.

The jury, consisting of eight members, deliberated for three and a half hours on Thursday without reaching a verdict. Discussions are set to resume on Friday.