ARM's license agreements with its licensees often include provisions which,
subject to the satisfaction of certain conditions, require ARM to indemnify its
licensees if the licensed technology infringes the intellectual property rights
of a third party. The following proceeding, in which products incorporating
ARM's processor designs have been accused of patent infringement, is subject to
such indemnification provisions.

Technology Properties Limited, Inc. In October 2005, Technology Properties
Limited, Inc. ("TPL") filed suit, in the United States District Court for the
Eastern District of Texas (Marshall Division), against certain companies in the
Fujitsu, Matsushita. NEC and Toshiba groups of companies alleging infringement
of TPL's US Patents Nos. 5,809,336; 5,784,584 and 6,598,148 (the "Litigation").
All of the defendants are licensees of various ARM technologies. It was revealed
as part of the preliminary infringement contentions in the Litigation, filed in
July 2006, that certain ARM technology is alleged to infringe a single claim in
US Patent No 5,784,584 (the "'584 Patent"). In September 2006, ARM filed a
motion to intervene in the Litigation and that motion has been granted. ARM is
now a defendant party in the Litigation. The claim construction (or "Markman")
hearing is scheduled for May 2007 and the trial date is scheduled for November
2007. Based on legal advice and written opinions received from external counsel,
ARM is confident that the accused ARM technology does not infringe any of the
claims of the '584 Patent or that the patent is invalid. ARM has voluntarily
joined as a party to the Litigation to proactively defend its technology against
ill conceived and false infringement allegations and fully expects to prove the
case for non-infringement or invalidity in the course of the Litigation

http://sec.edgar-online.com/2007/04/11/0000950103-07-000900/Section21.asp