Having called Arm employees to the stand on Day 1 only to have them pummeled on cross, Arm started the day by calling rock-star CPU architect and Nuvia founder Gerard Williams. With its enemy (Arm’s words, not mine) on the stand, Arm went on offense. Pressing its advantage, the company then called another era’s star architect, Bob Colwell, as an expert witness. Key points include:
- Nuvia breached its confidentiality agreement with Arm. Among various provisions, Nuvia averred it would not disclose terms of its ALA to an acquirer. However, Arm showed the startup copied the ALA to the data room Qualcomm set up to evaluate its acquisition of Nuvia. Although this is a breach, it is routine practice—and necessary—for confidential agreements to be supplied during due diligence. I’m confident that Arm’s takeover targets do the same thing. The problem is that it is a breach. Moreover, the Nuvia architecture license agreement (ALA) was a double secret document, not only flagged confidential but specifically called out as not for acquirers’ eyes.
- Qualcomm did not delete the Nuvia core as Arm requested. Everyone knew this. Personally, I think they should’ve done a cleanroom reverse engineering and reimplementation. However, Qualcomm didn’t believe the Nuvia core (Phoenix) was Arm technology. Williams implied his team autogenerates the CPU decoder—a key (but not the only) part of the CPU tied to the Arm architecture—and regenerated it at Qualcomm. He didn’t press this point but instead asserted that microarchitecture is independent of instruction-set architecture (ISA), implicitly justifying that shielded Phoenix from destruction.
- However, Arm showed that custom CPUs and their derivatives are Arm technology, at least as defined in the confidentiality clause of the Nuvia ALA. Colwell’s testimony backed up this viewpoint but softened his stance during Qualcomm’s cross examination. Nonetheless, it’s in the signed ALA.
- In circumstances affording nuance, we think Colwell would mostly agree with Williams, who would concede the ISA affects more than the decoders in a microarchitecture. We’re familiar with stories of companies nominally swapping decoders to convert a CPU to another instruction set, but know conversion requires more work. Nonetheless, were Qualcomm to adapt Phoenix to RISC-V, would Arm still assert the core is its technology?
- Other than the unreasonably broad claims in the confidentiality clause, a further deficiency in the Nuvia-Arm arrangement is that it specified an acquiring company would have to obtain an ALA with Arm to access Nuvia’s design. It didn’t explicitly comprehend the case in which an acquirer already had such an agreement, as Qualcomm did. At the time of the acquisition, all parties—including Arm’s then-CEO Simon Segars—likely interpreted the agreement as covering this case. But it didn’t, and Arm’s new management smelled an opportunity to cash in.
Bottom Line
Finally, one of the parties addressed the dispute’s substance, as Arm supported its claims with hard evidence. Although the evidence goes against reality, it’s the truth as it exists within the courtroom—the only place that matters in a lawsuit.