Business Notes COPYRIGHTS

Like the genes in a living cell, the microcodes on a computer chip carry the instructions that control the chip's functions. Manufacturers safeguard the valuable microcodes with copyrights, but their legality has been a vexing question. No longer. In a landmark ruling last week in San Jose, Federal Judge William Gray upheld a microcode copyright used by Intel Corp., the world's largest producer of microprocessors. The decision came in a dispute that began in 1984 when Japan's NEC challenged the copyright. Intel responded that NEC had illegally used the code in its own products. But while Gray upheld the copyright, he found that the NEC microcode differed from Intel's and had not infringed on the U.S. company in this case.

The impact of the ruling could take years to determine. Left in question was whether the copyrights, though now known to be legal, can serve as effective protection.