Qualcomm Wins Jury Verdict in Breach of Contract and Interference Trial Against Arm

On October 13, Paul, Weiss and co-counsel won a major jury verdict for semiconductor giant Qualcomm Inc. in a closely watched lawsuit brought by Qualcomm against Arm Holdings plc and Arm Ltd. Qualcomm claimed that Arm engaged in a pattern of anticompetitive conduct towards Qualcomm, including breach of contract, tortious interference and violation of the California Unfair Competition Law (UCL).

In particular, Qualcomm claimed that Arm breached its chip architecture license agreement with Qualcomm by withholding critical deliverables for more than two years; and that Arm intentionally and negligently interfered with Qualcomm’s relationship with its customer Meta, including though Arm’s communications with Meta, its leak of a letter that baselessly threatened to terminate Qualcomm’s architecture license agreement, and its subsequent outreach to ensure the threat of termination spread throughout the industry.

The five-day trial in the U.S. District Court for the District of Delaware included testimony from both Qualcomm and Arm CEOs, Arm’s general counsel, multiple senior Qualcomm and Arm executives, and engineers from both sides. During closing arguments, Qualcomm emphasized that it filed suit not with the goal of obtaining large damages, but to make clear that it was important to Qualcomm that Arm honor its contractual obligations and refrain from interfering with Qualcomm’s business relationships.

After deliberating over the course of two days, jurors returned a verdict that supported Qualcomm’s arguments and made clear that Arm was responsible for harming Qualcomm’s relationship with Meta. The jury found that Arm breached Qualcomm’s architecture licensing agreement, intentionally and negligently tortiously interfered with Qualcomm’s business relationship with Meta, and violated the UCL. The jury found for Arm on Qualcomm’s claim for breach of Qualcomm’s technology licensing agreement. The verdict is expected to have broader implications with respect to Arm’s conduct in the semiconductor industry.

A simultaneous bench trial was held in the evenings the same week as the jury trial on Qualcomm’s claims that Arm breached Qualcomm’s chip architecture licensing agreement by refusing to negotiate in good faith a license to the latest version of Arm’s computer architecture, and allegations of expanded UCL violations. Closing arguments are scheduled for October 20.

The verdict follows Qualcomm’s decisive trial victory in December 2024 in a lawsuit in which Arm sued Qualcomm for breach of its subsidiary’s chip architecture licensing agreement. That trial and verdict were widely followed in the semiconductor industry and highlight Arm’s continued business model pivot from licensing computer architecture that enables computer software and hardware communication, to building its own chips in direct competition with its customers, as well as Arm’s continued improper efforts to disrupt Qualcomm’s chip business.

The Paul, Weiss team was led by litigation partner Catherine Nyarady and included partners William Marks and Michael Holston.