By Stephen Nellis and Jane Lanhee Lee

SAN FRANCISCO (Reuters) -Chip expertise agency Arm Ltd, which is owned by Softbank (OTC:) Group Corp, on Wednesday mentioned it had sued Qualcomm (NASDAQ:) Inc and Qualcomm’s just lately acquired chip design agency Nuvia Inc for breach of license agreements and trademark infringement.

Arm is looking for an injunction that might require Qualcomm to destroy designs developed beneath Nuvia’s license agreements with Arm. Arm alleged its approval was wanted earlier than these might be transferred to Qualcomm.

Qualcomm, which acquired Nuvia for $1.4 billion final yr, didn’t instantly reply to a request for remark. If Arm’s effort is profitable it could primarily unwind one in every of Qualcomm’s greatest strategic acquisitions lately.

The lawsuit represents a significant break between Qualcomm and Arm, one in every of Qualcomm’s most necessary expertise companions. Qualcomm has relied on Arm because it stopped designing its personal customized computing cores. However lately, the businesses have been at odds.

Some inside Qualcomm have privately complained that Arm’s tempo of innovation is slackening, inflicting Qualcomm’s chips to fall behind Apple’s processors in efficiency.

Qualcomm purchased Nuvia, based by former Apple (NASDAQ:) chip architects, to reboot its efforts to make customized computing cores that might be completely different from customary Arm designs utilized by rivals resembling Taiwan chip designer MediaTek Inc..

One in every of Qualcomm’s first targets with Nuvia’s expertise is to beat the PC and laptop computer markets at the moment dominated by Intel Corp (NASDAQ:) and Superior Micro Gadgets (NASDAQ:) Inc . Qualcomm acquired Nuvia shortly after Apple ditched Intel to start utilizing its personal chips, that are additionally based mostly on Arm expertise, in its Mac laptops.

Apple’s transfer reinvigorated Mac gross sales, and Qualcomm CEO Cristiano Amon advised Reuters he needed to make use of Nuvia’s Arm-based designs to do the identical factor for the Home windows-based laptop computer market. Arm would nonetheless earn more money as a result of Qualcomm pays it a royalty on every chip it sells that makes use of its expertise. However it’s potential the royalty charges might be decrease beneath Nuvia’s cope with Arm.

The association highlights how a lot the 2 firms rely upon one another, mentioned Bob O’Donnell of TECHnalysis Analysis

“Qualcomm’s alternative shifting ahead with the PC (and probably server) enterprise is totally depending on Nuvia designs, and Nuvia is the first means by which Arm can get into Home windows PCs. So the businesses really want to associate nicely in the event that they need to have a significant impression on the PC market,” he mentioned.

The deal was seen as a manner for Qualcomm to minimize its reliance on Arm. Prior to now, most of Qualcomm’s chips have used computing cores licensed immediately from Arm, whereas Nuvia’s cores use Arm’s underlying structure however are customized designs.

For Qualcomm, utilizing extra customized core designs – a transfer that Apple has additionally made – may decrease some licensing prices to Arm within the brief time period and make it simpler to maneuver to a rival structure in the long run.

A supply near Arm mentioned that its licenses with Qualcomm weren’t in dispute and that solely expertise developed beneath Nuvia’s licenses was being contested within the lawsuit.