What just happened? Gerard Williams III, one of the lead developers behind Oryon and a variety of Apple’s processors, has provided crucial testimony in a trial over whether Qualcomm’s existing agreements with Arm extend to Nuvia’s chip designs post-acquisition. The jury verdict could potentially reshape the semiconductor industry’s competitive landscape and redefine the boundaries of intellectual property in chip design.

In a high-stakes trial unfolding in US federal court in Delaware, former Apple executive Gerard Williams III took the stand to address a crucial question: Who owns the intellectual property built upon Arm’s computing architecture? The case pits Arm against Qualcomm and could determine the future of Qualcomm’s foray into the laptop market.

At the heart of the controversy are the Qualcomm Oryon general-purpose cores, found in Snapdragon X processors. These cores, based on Arm’s Armv8 instruction set architecture (ISA), are the result of Qualcomm’s $1.4 billion acquisition of Nuvia in 2021. During cross-examination, Williams, a co-founder of Nuvia and one of the lead developers behind Oryon, made a startling revelation about the extent of Arm technology in the final design developed by Nuvia.

When asked to estimate the amount, he stated, “One percent or less.” His response underscores the crux of the dispute: whether Nuvia’s cores are derivatives of Arm’s technology or largely independent innovations.

The origins of this legal battle trace back to Nuvia’s founding in 2019. The company acquired two non-transferrable licenses from Arm: the Technology License Agreement (TLA) and Architecture License Agreement (ALA). These licenses allowed Nuvia to rework existing cores and design custom cores, respectively. Williams emphasized that the team developed its cores from scratch, with minimal use of Arm’s physical IP.

Qualcomm’s acquisition of Nuvia in 2021 sparked the current legal dispute. Arm requested that Qualcomm renegotiate the licensing terms, a demand Qualcomm refused, asserting that its own ALA covered its subsidiary Nuvia. The situation escalated when Arm revoked Nuvia’s licenses and, in October, terminated Qualcomm’s Architecture License Agreement.

During the trial, attorneys for both sides grilled Williams on the nature of Nuvia’s innovations and the role of Arm’s technology in their development. Arm’s attorney, Daralyn Durie, pressed Williams to acknowledge that the licensing contract covered Arm technology and its “derivatives” and “modifications.” Williams, while admitting the contract’s wording, maintained his belief that not all of Nuvia’s work was derivative of Arm’s technology.

The outcome of this trial could have far-reaching implications for licensing practices and IP ownership in the semiconductor industry. It may also impact Qualcomm’s efforts to compete in the laptop market, where it aims to challenge Apple’s dominance with custom chips.

As the trial progresses, industry analysts are closely watching, noting that Qualcomm reportedly pays Arm about $300 million annually. Evidence introduced at trial suggested that Arm executives believed they were missing out on an additional $50 million per year due to Qualcomm’s acquisition of Nuvia.

The trial is not over, although a jury verdict is expected soon. Another key witness, Qualcomm CEO Cristiano Amon, is potentially taking the witness stand first.