US Jury Finds Arm Violated Qualcomm's Architecture License Agreement, Awards $2 in Damages; Judge to Rule on 5-Year Royalty Suspension
A US federal jury ruled that Arm breached its Architecture License Agreement (ALA) with Qualcomm and interfered with its relationship with Meta. While damages were a symbolic $2, the focus now shifts to whether the judge will grant Qualcomm's request to suspend royalty payments to Arm for up to five years, posing a significant financial risk to Arm's ~10% global revenue share.
On October 13, 2026, a jury at the US Federal District Court in Delaware delivered a verdict finding that UK-based chip IP licensor Arm Holdings violated its Architecture License Agreement (ALA) with Qualcomm and intentionally interfered with Qualcomm's business relationship with its customer Meta. However, the jury awarded only nominal damages: $1 each for the breach of contract and interference claims, totaling $2. The critical unresolved issue is whether Judge Maryellen Noreika will grant Qualcomm's requested remedy of suspending royalty payments to Arm for up to five years.
The lawsuit stems from fundamental disagreements over intellectual property commercialization models between the two semiconductor giants. Arm primarily profits from licensing Instruction Set Architectures (ISAs) through two main modes: Technology License Agreements (TLA), which allow customers to use off-the-shelf Cortex CPU designs, and Architecture License Agreements (ALA), which permit customers to design unique CPU cores based on the underlying architecture while maintaining software compatibility. Qualcomm acquired ALA rights through its purchase of Nuvia and used them to develop its custom Oryon CPUs for Snapdragon smartphones, AI PCs, and automotive platforms. Arm accused Qualcomm of abusing ALA terms to avoid per-product royalties and issued a termination warning in 2024.
For Qualcomm, the favorable jury verdict removes the risk of an injunction against manufacturing or selling Oryon CPUs, clearing legal hurdles for continuing to launch devices with its self-developed chips. In a statement, Qualcomm welcomed the jury's finding that Arm failed to meet its long-term contractual obligations and intentionally disrupted its business, calling it "a win for innovation and competition." Conversely, Arm stated that the jury rejected most of Qualcomm's claims and awarded only $2 in total damages, arguing this validates Arm's good faith in fulfilling contracts and suggesting Qualcomm's lawsuit aimed to deprive Arm of billions in legitimate royalty income.