In the run-up to its hotly anticipated IPO, UK-based chip design company Arm has resorted to a risky strategy: suing one of its biggest customers. But with the dispute hinging on how revenue from new markets for its technology should be shared, it may have had little choice but to go to court.
The lawsuit, filed in district court in Delaware in late August, accuses mobile chip technology company Qualcomm of using Arm’s intellectual property without permission. The case stems from Qualcomm’s $1.4bn purchase last year of start-up Nuvia, which designs chips based on Arm’s technology.
The acquisition highlighted the technology interdependence of Arm and Qualcomm, with both companies searching for markets in which to expand beyond the mature smartphone industry. Nuvia’s first design was for an Arm-based chip for use in data centres, though Qualcomm has said it wants to use the same design to break into other new markets where Arm’s technology has yet to get a large foothold, including laptop computers and cars.