British chip designer ARM Holdings, owned by Softbank Group, said it has sued QUALCOMM, Inc. (NASDAQ:QCOM) and its recently acquired chip design firm Nuvia Inc for breaching license agreements and trademark infringement.
Arm is seeking an injunction to compel Qualcomm to destroy designs developed under Nuvia's license agreements with Arm, as Qualcomm allegedly was required to receive Arm's approval before these could be transferred to Qualcomm.
Arm has sued Qualcomm and Nuvia in a US federal court for using its processor designs and architecture.
"To accelerate its processor development efforts, Qualcomm spent over US$1bn to acquire Nuvia, a start-up led by senior engineers previously from Apple and Google that licensed Arm technologies to develop high-performance processor cores for semiconductor chips," read the lawsuit.
Ann Chaplin, general counsel of Qualcomm said in a statement that 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."
Qualcomm's latest strategic acquisition would essentially be unwound if Arm's plan succeeds, and as Qualcomm's most important technology partner, Arm's lawsuit represents a significant break between the two firms.
Despite relying on Arm since Qualcomm stopped designing its own custom computing cores, the two companies have been at odds in recent years.
Qualcomm employees reportedly have privately complained that Arm's pace of innovation is slowing down, resulting in Qualcomm's chips falling behind Apple Inc (NASDAQ:AAPL)'s processors.
To make custom computing cores that would differ from standard Arm designs used by rivals such as Taiwan chip designer MediaTek, Qualcomm acquired Nuvia, which was founded by former Apple chip architects.
With Nuvia's technology, Qualcomm hopes to challenge Intel Corporation (NASDAQ:INTC) and Advanced Micro Devices, Inc. (NASDAQ:AMD) in the PC and laptop markets which they now dominate.
Qualcomm acquired Nuvia a few months after Apple ditched Intel for its own chips, which are also based on Arm technology.
Arm now demands that Qualcomm and Nuvia cease use of relevant Nuvia technology, destroy it, as well as cease improper use of its trademarks with their related products.
Arm also is seeking damages for the misuse of its trademarks in connection with Nuvia technology integrated into semiconductor chips.