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> but this seems a bit of a radical step to suspend Nuvia's license and ask that all their design IP be destroyed.

I think it makes sense to ask for an extreme remedy in your suit in order to anchor perceptions and get a more desirable settlement/judgment eventually.

> to ask for an extreme remedy in your suit in order to anchor perceptions and get a more desirable settlement/judgment eventually.

I.e. "make an example out of them"

I think you are misunderstanding their point. They want to ask for more than what they expect to get, because the "reasonable outcome" will be seen as somewhere between what ARM is asking for and what Qualcomm is asking for. https://en.m.wikipedia.org/wiki/Anchoring_(cognitive_bias)

Assignment of terms of a contract upon acquisition being subject to approval by asignor is a pretty standard contract clause.

Famously, if either Intel or AMD are sold to a third party, their cross licensing agreements become null and void.

But how does Qualcomm need Nuvia's license when it has its own? And having the designs destroyed because of this wrinkle seems pretty rich. The licence was valid when the designs were created, but now they're not because the design (not the licence) was transferred to someone else?

For instance, Nuvia had a license to design ARM server cores but Qualcomm had a license to design cores for consumer devices. We don't know the exact terms but if you pay the (smaller?) price to design a server core during development then end up using it it in cell phones Arm might feel they have a legitimate beef.

And it seems like architectural licenses are essentially all bespoke agreements with Arm rather than standardized so who knows what else might be in there.

Could be for a number of reasons: Nuvia got the license because it was small, maybe slightly favorable terms that Qualcomm may want to subsume. Could be that ARM doesn't want to set a precedent of not enforcing assignment. Maybe they want something from Qualcomm and this is an excuse to get them to negotiate.

From Arm's complaint: "The licenses [to Nuvia] safeguarded Arm’s rights and expectations by prohibiting assignment without Arm’s consent, regardless of whether a contemplated assignee had its own Arm licenses."

If Nuvia signs an agreement "we get access to ARM tech and we won't transfer/assign our tech to someone else without ARM's agreement (even if that someone else already has ARM licenses" then the tech can't be transferred.

A big part of the complaint seems to come down to this: 1) Nuvia was granted licenses with fees and royalty rates that reflected the market opportunity and competition that Nuvia would bring to ARM's business; 2) In order to safeguard ARM's business, they needed to ensure that Nuvia couldn't transfer the technology developed under that license to someone else.

Let's look at this from ARM's perspective for a moment. ARM has major customers like Qualcomm that license chip designs. Let's say that Qualcomm is 30% of ARM's business. Let's say that architecture licenses cost 25% of what chip licenses cost. If Qualcomm can migrate from a chip license to an architecture license, then ARM loses 22.5% of its business. Let's say Qualcomm already has an architecture license because it got in on the ground floor in 2008 and there's nothing ARM can do about that. So there's always the huge threat that Qualcomm develops its own designs and ARM loses that huge portion of their business.

Now, Nuvia comes along and wants to build custom designs based of an architecture license. ARM's first thought is "Hell no! You'll just sell the designs to Qualcomm once you've proven them out." Instead, Qualcomm says "Ok, you can build the custom designs, but we get veto power over anyone acquiring the tech you build with our licenses - even if the acquirer already has licenses from us." Nuvia agrees to these terms. Their idea is that they're going to become the company to buy ARM server chips from - server chips that will be faster and more power efficient than Intel chips.

Years go by and it's hard to bring a product to market and Qualcomm comes around with a bucket of money (and a desperation to both compete with Apple and avoid being commodified by MediaTek and others licensing the same cores). Nuvia sells to Qualcomm. ARM now says "Wait a second, we didn't agree that you could transfer the tech you developed to Qualcomm. You agreed that you wouldn't do that!"

Qualcomm doesn't need Nuvia's license. Nuvia needs ARM's permission to transfer their tech to Qualcomm - because they agreed to that term (ARM alleges). Qualcomm's license (ARM alleges) doesn't allow them to incorporate ARM-based tech developed at third-party ARM licensees. The license was valid when the design was created, but it was specifically licensed only for Nuvia's use with a prohibition against being sold to a third party. When I buy a license for a movie, I can watch it in my living room, but I'm legally prohibited from exhibiting it in a theater. Licenses can have restrictions.

> And having the designs destroyed because of this wrinkle seems pretty rich.

That seems pretty reasonable to me. Qualcomm is looking to move its products forward by years based on these designs that ARM alleges Qualcomm isn't allowed to use. If Qualcomm isn't allowed to use those designs, what should the remedy be? An alternative would be that ARM could get an extremely high royalty rate on all future Qualcomm chips, but that would likely be more detrimental to Qualcomm than destroying the designs. As others have commented, it seems likely that Qualcomm will negotiate a settlement with ARM. Maybe Qualcomm could pay high rates for 3 years to compensate ARM while being able to get to market sooner and protect themselves from MediaTek and others. At the same time, ARM somewhat knows that even if the designs are destroyed, Qualcomm could likely get back to their current position in 3 years time given that they have the Nuvia employees and the resources of Qualcomm. That would let both sides move forward.

Minor nit, you mixed up parties in this sentence

> Instead, Qualcomm says "Ok, you can build the custom designs

saying Q can't use N designs isn't quite the same as A demanding those designs be destroyed.

although you can make a contract for (almost) anything, it's surprising to me that N would agree that A could forbid use of N designs. the most friendly and reasonable terms would be A demanding to be paid as much as N paid (or would have paid) for the IP in those designs. even renegotiating modestly to reflect Q's different role in the market.

it's the virality that's surprising here. even though N designs must have different from A's IP, A demands to destroy it?

Q should demand to audit A's IP to ensure that A has destroyed any benefit they got from the collaboration with N.

> Let's say that architecture licenses cost 25% of what chip licenses cost.

Why would the architecture license be less than the off-the-shelf chip license? If that were the case, I think youd see a lot more people designing cores.

> If that were the case, I think youd see a lot more people designing cores.

Why? Designing fast and efficient cores is difficult and expensive. Almost certainly more expensive than licensing a pre-designed core. You've got to have a clear business need and the money (and expertise) to do it.

> this seems a bit of a radical step to suspend Nuvia's license and ask that all their design IP be destroyed

My understanding is that they are targeting design work that took place after Nuvia's license was terminated.

>Arm terminated Nuvia’s licenses in March 2022. Instead of getting a new license, Nuvia and Qualcomm continued to develop processors based on the Phoenix core, which is a breach of license agreements, according to Arm.

https://www.tomshardware.com/news/arm-sues-qualcomm-and-nuvi...