Qualcomm sued by chipmaker Arm

Arm, the British chipmaker owned by SoftBank, on Wednesday sued Qualcomm for breach of contract and trademark infringement, according to court documents.

Why it matters: This comes just months after reports that Qualcomm would seek to buy an ownership stake in Arm, whose prior agreement to be acquired by Nvidia was scrapped due to regulatory pressures.

• It's difficult to see that sort of deal coming together now, given the hard feelings sure to be sparked by the lawsuit.

At issue: Arm's complaint centers around Nuvia, a semiconductor startup founded by ex-Apple and Google engineers, which Qualcomm acquired last year for $1.26 billion.

• Nuvia had licensed Arm tech to develop its processor cores. Arm claims that the Qualcomm acquisition led it to terminate those licenses — and to "destroy any Arm-based technology developed under the licenses" — but that Nuvia and Qualcomm continued to leverage the Arm tech.
• "Further, Qualcomm’s conduct indicates that it has already and further intends to use Arm’s trademarks to advertise and sell the resulting products in the United States, even though those products are unlicensed," according to the filing.
• Arm is seeking enforcement of the license agreement termination, plus unspecified damages.

Be smart: Arm doesn't make its own chips but rather designs chip cores that can be licensed by chipmakers. Both Qualcomm and Nuvia have been licensees of its technology. However, the degree of customization allowed depends on the type of license that the company has with Arm. Arm also contends that Qualcomm couldn't transfer Nuvia's license rights without authorization from Arm.

What they're saying: Qualcomm general counsel Ann Chaplin provided the following statement to Axios: "Arm’s lawsuit marks an unfortunate departure from its longstanding, successful relationship with Qualcomm. Arm has no right, contractual or otherwise, to attempt to interfere with Qualcomm’s or NUVIA's innovations. Arm’s complaint ignores the fact that Qualcomm has broad, well-established license rights covering its custom-designed CPU’s, and we are confident those rights will be affirmed.”

Read the lawsuit: