With testimony from additional expert witnesses, including Nuvia Founder Gerard Williams, the second day of the civil jury trial between Arm and Qualcomm, cut through some of the superfluous issues and focused on two key topics, the licenses and technical details of CPU cores, providing more insight on where the contractual confusion arose and what is likely to be considered by the jury in determining a verdict.
Disclosure: My company, Tirias Research, has consulted for Arm, Qualcomm and other companies mentioned in this article.
Among the Expert Witnesses on the second day of expert testimonials were the following:
- Gerard Williams – The former CEO of Nuvia, now a Senior VP of Engineering at Qualcomm
- Dr. Robert Colwell – formerly of Intel and DARPA
- Shou-Wei (Mike) Chen – Professor of Electrical Computer Engineering at USC
- Jonathan Weiser – Qualcomm attorney
The License Agreements
Arm has two business models. The first is to sell IP blocks, including CPUs, to companies for use in chip designs through Technology License Agreements (TLAs). The second is to license the Arm instruction set architecture (ISA) allowing companies to develop custom CPU cores that are Arm-compliant through Architecture License Agreements (ALAs). TLAs are much more common and account for the vast majority of the thousands of Arm licenses. There are only a few companies that have ALAs allowing for the development of custom Arm-compliant CPU cores. According to Arm testimony, this number ranges between 5 and 20 licensees and includes, or has included, the likes of AMD, Ampere, Apple, Broadcom, Google, Intel, Marvell, Microsoft, Qualcomm, and Samsung. These ALA licensees compete directly with Arm’s most profitable business of selling IP through TLAs.
The Nuvia ALA
While there are common elements in Arm’s licensing agreements, each one is negotiated and customized around the needs of the customer. Unfortunately, all of the agreements are confidential and not available for review. Even through the proceedings, only a limited view of bits and pieces of the agreements was made available. However, today’s testimony provided some notable facts about the Nuvia ALA that is at the heart of the case such as:
- Arm has the right to approve an acquisition of the licensee, in this case, Nuvia. This in itself may be deemed an unreasonable condition because of the limitation it places on the licensee, but that’s up to the court to decide.
- If Nuvia is acquired, the Nuvia ALA is null and void, and the acquiring company must acquire its own license, or in this case licenses because Nuvia was using the ALA to develop the custom CPU core and a TLA allowing it to use other off-the-shelf Arm IP in the development of a server processor. According to this, there was no need for Arm to terminate the Nuvia licenses because they were automatically terminated once Qualcomm acquired Nuvia. However, Qualcomm already has both TLA and ALA licenses from Arm.
- Upon termination of the agreement, the licensee must stop using and destroy material related to an Arm-compliant processor.
- Sections were added to the Nuvia ALA to define Nuvia intellectual property (IP) and to try and protect it. This added to the confusion and dispute between the parties.
- The contract does say that Arm must approve any transfer of the license. One section of the license covers technology while another covers Nuvia technology and derivatives, which would appear to include any transfer of CPU designs even though the term “designs” is not specifically mentioned.
The Heart Of The Case
These last few points led to a major point of contention. Is the Phoenix CPU core Nuvia IP or does it fall under the category of an Arm-compliant design? Arm claims that the Arm-compliant CPUs are derivatives of the Arm ISA and that the Phoenix CPU core was Arm-compliant. Qualcomm claims that the microarchitecture, the actual CPU design, is independent of the ISA and while Phoenix was intended to eventually be Arm-compliant, the design was not completed and it was never tested to be Arm-compliant.
Qualcomm does not deny using the Phoenix core as the basis for the CPUs in its latest generation of PC and flagship smartphone SoCs, codenamed Hamoa and Pakala, respectively. Qualcomm is also using it as the basis for the CPU in the upcoming automotive SoC, codenamed Nordschleife. However, according to Qualcomm all of these are unique designs that began after the acquisition of Nuvia in July 2021.
So, the real issue on which the jury will need to decide is whether Qualcomm has the right under either the Nuvia ALA and/or the Qualcomm ALA licenses to use the Nuvia technology.
The Side Bar
There is another facet to this dispute that is being decided by the judge, which is presumably related to the countersuit previously filed by Qualcomm. Close to the end of the day, the jury was dismissed and testimony began over the use of suggestions provided by Nuvia to Arm in the development of Arm’s CMN-650 (codenamed Rhodes), CMN-700 (codenamed Kampos), and the next generation CMN (codenamed S3). CMN stands for coherent mesh network. The CMN-700 is the first to support the Armv9 architecture.
According to the testimony, Nuvia was collaborating with Arm on the CMN development by providing feature suggestions and testing. Nuvia was also provided early access as a lead partner. According to the documentation, Nuvia provided many suggestions to improve the platform, but only the high to mid-priority items were included, which resulted in less than half of the suggestions being implemented. The total appears to be roughly five or six suggestions in the CMN-700. Unfortunately, the cooperation was interrupted by the acquisition of Nuvia by Qualcomm.
Nuvia is claiming that Arm has used Nuvia-confidential information, because all of the suggestions were provided to Arm through documents stamped “confidential,” and that Arm failed to destroy all the documents after termination of the license. Arm claims that under the TSA, it has the right to use any suggestions from its partners and that they are not considered confidential. However, the two companies also have an NDA agreement from 2019 supporting Nuvia’s claim that the information is confidential. The existence of multiple conflicting documents is adding to the complexity of this dispute.
Up Next
The testimony on the Nuvia claim against Arm will end early Wednesday.
In the main suit, Arm rested its case toward the end of Tuesday and Qualcomm began. Wednesday will feature more testimony from Qualcomm experts, including Qualcomm CEO Cristiano Amon.