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John Dorbal
@JDorbal1989
Stealth Analyst: Paid to focus on QCOM, Arm Discount JD & CS PhD
162 Following    428 Followers
@insane_analyst Qualcomm on X: "Qualcomm Incorporated today announced the renewal of its global patent license agreement with Apple, effective April 1, 2027: " / X
Thanks for asking. It is hard to gauge whether my tweets make sense to normal folks and it seems not, unless you've been following along since the start. First, to answer your specific question: No, this trial was not about damages for Arm trying to cancel Qualcomm's ALA. The overall dispute is large, as you know Arm sued Qualcomm over the Nuvia acquisition. But Qualcomm countersued Arm for customer interference (Like leaking the ALA termination notice from 2 years ago to bloomberg) and for breaching their licensing agreements (the ALA and TLA) by withholding technical deliverables. This specific trial was in front of Judge Noreika alone because under California law, whether a contract remedy is legal or an unenforceable penalty is decided by a judge, not a jury. So to clarify the post you asked about. Qualcomm has a provision in both agreements (Section 8.3) stating that if Arm fails to provide required technology deliverables (like Architecture Reference Manuals and test vectors for the ALA, or core RTL/design files for the TLA) and fails to fix it within 30 days after notice, Qualcomm's royalty payments drop to zero for 5 years. The nuance is if Arm breaches either contract, royalties drop to zero across both contracts. The two possible outcomes from Judge Noreika: 1. The Judge upholds Section 8.3 as legal: The clause stays alive. When the jury trial starts on October 5, the jury has to decide whether Arm actually breached those delivery terms and refused to cure. If the jury says yes, Qualcomm gets 5 years of zero royalties. 2. The Judge strikes Section 8.3 down as an illegal penalty: The 5-year zero-royalty remedy is completely dead. Qualcomm cannot get free royalties. Instead, if the jury later finds Arm breached, Qualcomm can only ask for "actual damages" (the proven, real-world dollar cost caused by the delivery delay), which is much harder to prove and subject to strict liability caps in the contract. Hope that clears it up.
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