Copyright 1990 The New York Times Company
The New York Times
August 30, 1990, Thursday, Late Edition - Final
SECTION: Section D; Page 1, Column 1; Financial Desk
LENGTH: 870 words

HEADLINE: COMPANY NEWS; A Chip Patent Is Granted That May Rewrite History

BYLINE: By ANDREW POLLACK, Special to The New York Times


In a shock to the computer industry, a virtually unknown California inventor has been issued a patent that he says covers a fundamental development of the computer revolution - the microprocessor.

After a 20-year struggle, Gilbert P. Hyatt, an inventor in Southern California, was granted a patent for a design for building a computer on a single chip. Mr. Hyatt filed for the patent in 1970 based on work he started in 1968.

Attorneys and computer companies were studying the patent today to determine its significance, which could turn out to be far less than Mr. Hyatt hopes. But lawyers said Mr. Hyatt could collect millions of dollars of royalties over the next 17 years from manufacturers of the chips.

The development could also entail rewriting the history books of the electronics industry. Credit for inventing the microprocessor has generally been given to Ted Hoff, who developed the first such chip at the Intel Corporation in 1971. Texas Instruments Corporation, however, also has a fundamental microprocessor patent issued in the early 1970's.

The ability to cram the basic functions of a computer onto a single chip gave rise to personal computers and allowed programmable features to be added to electronic devices ranging from microwave ovens and videocassette recorders. A chip is typically a piece of silcon that contains microscopic electronic circuits that are the building blocks of computers and other electronic devices.

''It looks to me that it's broad,'' said Gary Hecker, a Los Angeles patent attorney who has seen Mr. Hyatt's patent. ''It could be sufficiently broad to cover basic microprocessor design.'' But he added that there appears to be plenty of areas where the patent could be challenged.

Michael Slater, editor of Microprocessor Report, an industry newsletter, said he did not think the patent covered microprocessors but other chips known as microcontrollers.

Mr. Hyatt's patent, Mr. Slater said, is for a chip containing both the processor and memory needed for a computer. Microcontrollers have both these features and are used in a variety of electronic appliances. Microprocessors generally only contain the processor, not the memory.

Big Markets Involved

Microcontrollers represent a larger market than microprocessors. Worldwide sales this year of microcontrollers will be about $3.4 billion and sales of microprocessors about $2.1 billion, according to Dataquest, a market research firm.

Intel and Motorola Inc. are the leading microprocessor manufacturers. Motorola is the leading maker of microcontollers. But numerous other semiconductor companies make one or both types of the chips. It is also possible that Mr. Hyatt's patent would entitle him to collect royalties from users of such chips, like personal computer manufacturers.

Spokeswomen for Intel and Motorola said their attorneys were reviewing the patent and that they did not yet have any comment. The patent was issued in July, but not publicized until this week.

Mr. Hyatt, who is 52 years old, said he began work on the computer chip in 1968 when he started a company called Micro Computer Inc. He said the company closed in 1971 because of a dispute with its venture capital investors before he could make such a chip. Since then, he said, he has been supporting his work as an inventor by consulting for aerospace companies.

''I always had confidence that we would set history straight,'' he said.

Mr. Hyatt, who lives in La Palma, outside Los Angeles, said he hoped to license the patent at reasonable rates to provide financing for his research. He said he was negotiating a joint venture with a ''major manufacturer'' that would license his patents and would then try to license them to others. ''Nobody is interested in litigation,'' he said.

Analysts said if Mr. Hyatt set his rates low enough, he might get what for him would be significant revenue without hurting chip companies. But if he asks for large amounts, he will no doubt be challenged.

Susan Nycum, a computer attorney in Palo Alto, Calif., said the new patent appears to predate Texas Instruments' patent. That could weaken the hand of the Dallas company, which is now seeking royalty payments from many personal computer companies, based in part on its microprocessor patent.

In relation to this effort, Texas Instruments has sued Zenith Data Systems and two Korean personal computer manufacturers, Samsung and Daewoo, for patent infringement. A Texas Instruments spokesman said the company didn't think the Hyatt patent would affect its litigation.

Long Wait for Patents

Attorneys said it was unusual but not unprecedented for a patent to take so long to issue. Gordon Gould was issued a patent in 1977 for a laser he invented as a graduate student in the late 1950's, and has since been pursuing royalty collection. And the Japanese patent office in November finally issued Texas Instruments a patent for the integrated circuit it had been seeking since 1960.

Other inventors have also waged long struggles. Only last month, Robert W. Kearns won a $5.2 million jury verdict against the Ford Motor Company, related to Mr. Kearns's development of intermittent windshield wipers about 20 years ago.