Qualcomm: Arm lawsuit motivated by greed, 'payback' for opposing Nvidia takeover
(2022/10/15)
- Reference: 1665785414
- News link: https://www.theregister.co.uk/2022/10/14/qualcomm_arm_lawsuit_nuvia/
- Source link:
Qualcomm has painted Arm as a greedy, capricious bully that's fixated on extracting more and more licensing fees for its designs.
The Snapdragon giant hit out at the Softbank-owned CPU designer in a court filing responding to Arm's lawsuit against Qualcomm.
Late this summer, Arm [1]sued Qualcomm , accusing the US chip titan of breaking the terms of its licenses from Arm, and demanded the destruction of Nuvia’s CPU designs.
[2]
Qualcomm, which [3]acquired Nuvia early last year for $1.4 billion, planned to incorporate the startup’s CPU cores into future products, including those aimed at notebooks and servers.
[4]
[5]
Crucially, Nuvia had an Armv8 architectural license from Arm, allowing Nuvia to design its own fully custom Arm-compatible processors, which Nuvia intended to use in datacenter systems. Qualcomm also licensed chip blueprints from Arm to use in its Snapdragon family of chips: Qualcomm holds Armv8 and v9 licenses as well as licenses for off-the-shelf, pre-designed CPU cores from Arm.
And when Qualcomm took over Nuvia, Qualcomm started to use Nuvia's Arm-compatible CPU cores for its own chips.
[6]
Arm alleged Qualcomm failed to obtain Arm’s consent, as required by its licenses, to absorb and use that Nuvia-designed technology, which was produced under Nuvia's architectural license. Arm said Qualcomm had declined to negotiate new licensing terms after the Nuvia acquisition.
Arm basically argued that the license it gave Nuvia was for Nuvia's Armv8 server chips only, and Qualcomm couldn't just start integrating those Nuvia designs even though it bought Nuvia: Qualcomm had to ask for Arm's permission as per the licensing agreements, it was claimed.
"Qualcomm effectively seeks to circumvent Arm’s licensing model," by buying Nuvia and continuing to use the startup's licenses rather than get fresh license agreements, Arm's lawsuit stated.
Arm has no right to demand any destruction of Qualcomm’s CPU technology
In Qualcomm’s 77-page response
The Snapdragon designer also suggested that Arm’s efforts to prevent it from using the core designs acquired from Nuvia was “payback” for opposing Nvidia’s bid to buy the British biz.
[8]
Nvidia's takeover of Arm fell through earlier this year after Nvidia failed to garner regulatory support for the mega-merger amid complaints from Qualcomm, Google, and others.
“Arm has no right to demand any destruction of Qualcomm’s CPU technology because Qualcomm’s use of Arm technology and information is licensed under overlapping license agreements,” Qualcomm submitted to the court.
It's understood that Arm licenses are tailored to the customer use case. Nuvia’s architecture licenses are believed to be tied to server processors, while Qualcomm’s architectural licenses are limited to personal devices, such as smartphones.
As such, Arm argues Qualcomm really should have negotiated and obtained permission to use Nuvia’s IP first, as required by the paperwork.
Qualcomm's filing states that Qualcomm believed Arm would welcome the acquisition, but instead demanded Qualcomm pay higher royalty rates; restrict Qualcomm employees with access to Arm confidential information from working on any CPU design related to the Nuvia acquisition for three years; pay a design transfer fee for Nuvia’s CPU design; and agree to a separate license subject to additional fees.
[9]Arm sues Qualcomm over custom Nuvia CPU cores, wants designs destroyed
[10]Qualcomm 'on track' for Apple M-level Nuvia chips in late 2023
[11]Qualcomm readying new Arm server chip based on Nuvia acquisition
[12]Arm'd with ex-Apple engineers from Nuvia, Qualcomm hopes to make Apple M1-matching chips for Windows PCs
“Arm’s demands were outrageous,” Qualcomm told the court. “Arm is claiming a right to control the transfer of Nuvia technology, when Nuvia’s ALA [architectural license agreement] provided no such rights to Arm.”
Failing to coax Qualcomm into paying higher fees and delaying development of Nuvia-derived CPUs, Arm's "alternative strategy was to seek to preclude Qualcomm from proceeding with developing its custom CPU, and in doing so, force the purchase of Arm’s off-the-shelf CPU," wrote Qualcomm.
Background
Arm offers a full suite of pre-built, off-the-shelf core designs under its Cortex and Neoverse portfolios, which chipmakers can license under a more restrictive technology license agreement. Qualcomm holds both architectural (ALA) and technology (TLA) license agreements with Arm and has long used its Cortex cores in its Snapdragon mobile processors.
Qualcomm appears to suggest that Arm may have been concerned that a shift to Nuvia’s core designs could negatively impact Arm's profit margins. Chips covered by ALAs have a lower royalty rate to Arm than those using TLA cores.
If Qualcomm uses CPU cores designed by Nuvia under the startup's architectural license, Qualcomm doesn't have to pay Arm as much in royalties per-chip than if Qualcomm licensed off-the-shelf Arm CPU cores. And Arm seems to be arguing that Qualcomm can't use its own ALAs from Arm to cover the Nuvia-designed cores, as those will have to be renegotiated.
“The TLA has a higher royalty rate than Qualcomm’s ALA,” Qualcomm’s response reads. “When Qualcomm successfully replaces Arm-designed CPUs with its own designs, Qualcomm will pay Arm lower royalties under the ALA.”
The Snapdragon giant believed the integration of Nuvia’s Phoenix cores into its products would allow it “to compete more effectively against not only rival Arm licensees and Arm, but also rival suppliers of CPUs compliant with other instruction set architectures — notably, Intel’s x86.”
The chipmaker has called on the Delaware federal court to dismiss Arm’s claims and declare Qualcomm and Nuvia’s conduct fully licensed.
“Unless this court rejects Arm’s arguments, Arm’s extreme position could be weaponized against all of its licensees, allowing Arm to claim ownership over all its licensees’ innovations,” reads Qualcomm’s response, which was very quietly filed on a Friday at the end of September.
Arm is seeking to enforce Qualcomm’s obligation to destroy and stop using the Nuvia designs that were derived from Arm’s technology
Arm, meanwhile, maintains that it is simply protecting its ecosystem and partners from those that would circumvent the rules.
“Arm’s claim against Qualcomm is aimed at protecting the Arm ecosystem and partners who rely on our intellectual property and innovative designs. Qualcomm has violated the terms of the Nuvia license agreement and yet it continues to use the technology, unlicensed,” Arm told The Register today in a statement.
“This is an egregious breach of our agreement and ignores the requirements related to IP license assignment that are standard in Arm licensing agreements.
"Arm is seeking to enforce Qualcomm’s obligation to destroy and stop using the Nuvia designs that were derived from Arm’s technology under the terminated Nuvia agreements. We believe our argument is clear, and we are confident the court will agree.”
From our point of view, the row seems to be this: Arm wants Qualcomm to stick to the letter of the license agreements, and Qualcomm thinks it hasn't done anything wrong, and if it has, it was at least sticking to the spirit of the text. Until the wording of the ALAs are public at trial, we'll perhaps never know for sure. ®
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[1] https://www.theregister.com/2022/08/31/arm_sues_qualcomm/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Y0owXaL03C7V3grKRJ3URwAAAEg&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://www.theregister.com/2022/05/02/qualcomm_laptops_nuvia/
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[7] https://regmedia.co.uk/2022/10/14/arm_v_qualcom_response.pdf
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y0owXaL03C7V3grKRJ3URwAAAEg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[9] https://www.theregister.com/2022/08/31/arm_sues_qualcomm/
[10] https://www.theregister.com/2022/05/02/qualcomm_laptops_nuvia/
[11] https://www.theregister.com/2022/08/19/qualcomm_arm_server_chip/
[12] https://www.theregister.com/2021/11/16/qualcomm_pc_chip/
[13] https://whitepapers.theregister.com/
The Snapdragon giant hit out at the Softbank-owned CPU designer in a court filing responding to Arm's lawsuit against Qualcomm.
Late this summer, Arm [1]sued Qualcomm , accusing the US chip titan of breaking the terms of its licenses from Arm, and demanded the destruction of Nuvia’s CPU designs.
[2]
Qualcomm, which [3]acquired Nuvia early last year for $1.4 billion, planned to incorporate the startup’s CPU cores into future products, including those aimed at notebooks and servers.
[4]
[5]
Crucially, Nuvia had an Armv8 architectural license from Arm, allowing Nuvia to design its own fully custom Arm-compatible processors, which Nuvia intended to use in datacenter systems. Qualcomm also licensed chip blueprints from Arm to use in its Snapdragon family of chips: Qualcomm holds Armv8 and v9 licenses as well as licenses for off-the-shelf, pre-designed CPU cores from Arm.
And when Qualcomm took over Nuvia, Qualcomm started to use Nuvia's Arm-compatible CPU cores for its own chips.
[6]
Arm alleged Qualcomm failed to obtain Arm’s consent, as required by its licenses, to absorb and use that Nuvia-designed technology, which was produced under Nuvia's architectural license. Arm said Qualcomm had declined to negotiate new licensing terms after the Nuvia acquisition.
Arm basically argued that the license it gave Nuvia was for Nuvia's Armv8 server chips only, and Qualcomm couldn't just start integrating those Nuvia designs even though it bought Nuvia: Qualcomm had to ask for Arm's permission as per the licensing agreements, it was claimed.
"Qualcomm effectively seeks to circumvent Arm’s licensing model," by buying Nuvia and continuing to use the startup's licenses rather than get fresh license agreements, Arm's lawsuit stated.
Arm has no right to demand any destruction of Qualcomm’s CPU technology
In Qualcomm’s 77-page response
[7]PDF
to the suit, Qualy denied the vast majority of complaints leveled against it. Qualcomm argued that its Armv8 architectural license with Arm was "broadly overlapping" with the one Nuvia had, with pretty much the same rights. In Qualcomm's mind, the license it had with Arm was the same as the one Nuvia had with Arm.The Snapdragon designer also suggested that Arm’s efforts to prevent it from using the core designs acquired from Nuvia was “payback” for opposing Nvidia’s bid to buy the British biz.
[8]
Nvidia's takeover of Arm fell through earlier this year after Nvidia failed to garner regulatory support for the mega-merger amid complaints from Qualcomm, Google, and others.
“Arm has no right to demand any destruction of Qualcomm’s CPU technology because Qualcomm’s use of Arm technology and information is licensed under overlapping license agreements,” Qualcomm submitted to the court.
It's understood that Arm licenses are tailored to the customer use case. Nuvia’s architecture licenses are believed to be tied to server processors, while Qualcomm’s architectural licenses are limited to personal devices, such as smartphones.
As such, Arm argues Qualcomm really should have negotiated and obtained permission to use Nuvia’s IP first, as required by the paperwork.
Qualcomm's filing states that Qualcomm believed Arm would welcome the acquisition, but instead demanded Qualcomm pay higher royalty rates; restrict Qualcomm employees with access to Arm confidential information from working on any CPU design related to the Nuvia acquisition for three years; pay a design transfer fee for Nuvia’s CPU design; and agree to a separate license subject to additional fees.
[9]Arm sues Qualcomm over custom Nuvia CPU cores, wants designs destroyed
[10]Qualcomm 'on track' for Apple M-level Nuvia chips in late 2023
[11]Qualcomm readying new Arm server chip based on Nuvia acquisition
[12]Arm'd with ex-Apple engineers from Nuvia, Qualcomm hopes to make Apple M1-matching chips for Windows PCs
“Arm’s demands were outrageous,” Qualcomm told the court. “Arm is claiming a right to control the transfer of Nuvia technology, when Nuvia’s ALA [architectural license agreement] provided no such rights to Arm.”
Failing to coax Qualcomm into paying higher fees and delaying development of Nuvia-derived CPUs, Arm's "alternative strategy was to seek to preclude Qualcomm from proceeding with developing its custom CPU, and in doing so, force the purchase of Arm’s off-the-shelf CPU," wrote Qualcomm.
Background
Arm offers a full suite of pre-built, off-the-shelf core designs under its Cortex and Neoverse portfolios, which chipmakers can license under a more restrictive technology license agreement. Qualcomm holds both architectural (ALA) and technology (TLA) license agreements with Arm and has long used its Cortex cores in its Snapdragon mobile processors.
Qualcomm appears to suggest that Arm may have been concerned that a shift to Nuvia’s core designs could negatively impact Arm's profit margins. Chips covered by ALAs have a lower royalty rate to Arm than those using TLA cores.
If Qualcomm uses CPU cores designed by Nuvia under the startup's architectural license, Qualcomm doesn't have to pay Arm as much in royalties per-chip than if Qualcomm licensed off-the-shelf Arm CPU cores. And Arm seems to be arguing that Qualcomm can't use its own ALAs from Arm to cover the Nuvia-designed cores, as those will have to be renegotiated.
“The TLA has a higher royalty rate than Qualcomm’s ALA,” Qualcomm’s response reads. “When Qualcomm successfully replaces Arm-designed CPUs with its own designs, Qualcomm will pay Arm lower royalties under the ALA.”
The Snapdragon giant believed the integration of Nuvia’s Phoenix cores into its products would allow it “to compete more effectively against not only rival Arm licensees and Arm, but also rival suppliers of CPUs compliant with other instruction set architectures — notably, Intel’s x86.”
The chipmaker has called on the Delaware federal court to dismiss Arm’s claims and declare Qualcomm and Nuvia’s conduct fully licensed.
“Unless this court rejects Arm’s arguments, Arm’s extreme position could be weaponized against all of its licensees, allowing Arm to claim ownership over all its licensees’ innovations,” reads Qualcomm’s response, which was very quietly filed on a Friday at the end of September.
Arm is seeking to enforce Qualcomm’s obligation to destroy and stop using the Nuvia designs that were derived from Arm’s technology
Arm, meanwhile, maintains that it is simply protecting its ecosystem and partners from those that would circumvent the rules.
“Arm’s claim against Qualcomm is aimed at protecting the Arm ecosystem and partners who rely on our intellectual property and innovative designs. Qualcomm has violated the terms of the Nuvia license agreement and yet it continues to use the technology, unlicensed,” Arm told The Register today in a statement.
“This is an egregious breach of our agreement and ignores the requirements related to IP license assignment that are standard in Arm licensing agreements.
"Arm is seeking to enforce Qualcomm’s obligation to destroy and stop using the Nuvia designs that were derived from Arm’s technology under the terminated Nuvia agreements. We believe our argument is clear, and we are confident the court will agree.”
From our point of view, the row seems to be this: Arm wants Qualcomm to stick to the letter of the license agreements, and Qualcomm thinks it hasn't done anything wrong, and if it has, it was at least sticking to the spirit of the text. Until the wording of the ALAs are public at trial, we'll perhaps never know for sure. ®
Get our [13]Tech Resources
[1] https://www.theregister.com/2022/08/31/arm_sues_qualcomm/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Y0owXaL03C7V3grKRJ3URwAAAEg&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://www.theregister.com/2022/05/02/qualcomm_laptops_nuvia/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y0owXaL03C7V3grKRJ3URwAAAEg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
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[7] https://regmedia.co.uk/2022/10/14/arm_v_qualcom_response.pdf
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y0owXaL03C7V3grKRJ3URwAAAEg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[9] https://www.theregister.com/2022/08/31/arm_sues_qualcomm/
[10] https://www.theregister.com/2022/05/02/qualcomm_laptops_nuvia/
[11] https://www.theregister.com/2022/08/19/qualcomm_arm_server_chip/
[12] https://www.theregister.com/2021/11/16/qualcomm_pc_chip/
[13] https://whitepapers.theregister.com/
Good luck to Arm
VoiceOfTruth
Qualcomm is a US company suing in a US so-called court. Arm has about a 2% chance of an impartial decision.
Lorribot
Ah the joys of Licensing.
The licensee will rarely win as they didn't right or read the EULA and these things are never favourable to commonsense. Qualcomm has gotten very rich of using ARM IP. It could always design its own chips r move to RISC-v or some other IP, but i dare say that would be a tad difficult and very expensive, more than ARM licence fees.
I generally find...
aerogems
... that when the ad hominems come out, it's usually a pretty sure sign that the party knows it's up shit creek without a paddle and is just desperately flailing about in the hopes of getting lucky. As the old saying goes: If the law is against you, argue the facts. If the facts are against you, argue the law. If the facts and law are against you, pound the table and yell like hell. Qualcomm seems squarely in that third category.
Must be a mistake
Kevin McMurtrie
"Qualcomm has painted Arm as a greedy, capricious bully that's fixated on extracting more and more licensing fees for its designs."
Somehow "has painted Arm as" replaced the word "is".
Qualcomm argued that its Armv8 architectural license with Arm was "broadly overlapping" with the one Nuvia had, with pretty much the same rights.
I expect Qualcomm thought: We can buy NuVia, and get our money back from using the cheaper licenses in phone processors. When ARM sues we will just dissemble and prevaricate, and if the worst comes to the worst, we will be forced to pay what we agreed to.
It's a hard row being an IP vendor. Sooner or later (ok - sooner) your customer stops wanting to pay for something they have already gotten their hands on.