Now Qualcomm ( NASDAQ:QCOM ) is allowed to sell chips that incorporate Nuvia's technology without disruption as they already won the legal battle against Arm.

Qualcomm ( NASDAQ:QCOM ) acquired startup Nuvia in 2021 for $1.4 billion but can't sell the chips with Nuvia's technology incorporated inside without paying royalties. The reason is because Nuvia's tech was licensed under agreement with Arm.

Arm started the legal proceeding against Qualcomm in 2022, a year after Nuvia was acquired by Qualcomm earlier in 2021, claimed that Qualcomm was abusing the licenses of Nuvia's technology that was once licensedto Nuvia by Arm before the acquisition.

Qualcomm, however, believed their existing license covered the use of Nuvia's technology. Delaware federal court trial decided to rule in Qualcomm's favor, the jury found that Qualcomm's central processors are licensedunder its agreement with Arm and can continue using Nuvia's technology in its chips.

Reuters reported that the estimated potential annual savings from this legal victory is $1.4 billion in royalties to Arm. This is important to support Qualcomm to continue strengthening its chip designs with proper licensing content for PCs and smartphones to compete with Apple and Intel.

However, there is still an issue, of whether or not Nuvia violating the licensing contract it had with Arm that would result in a retrial against Nuvia.

This article first appeared on GuruFocus .