Who Invented Microprocessors?

By RICHARD BEHAR

The U.S. Patent and Trademark Office registration number is tough to remember -- 4,942,516 -- and the holder of the patent, a Los Angeles inventor named Gilbert Hyatt, is a virtual unknown. But Hyatt, 52, has suddenly carved a memorable niche for himself in the multibillion-dollar semiconductor industry. Last week, after a 20-year battle with the patent office, the tenacious engineer announced that he had finally received a certificate of intellectual ownership for a single-chip microprocessor that he says he invented in 1968. The announcement sent shock waves throughout the computer industry, which could be forced to pay Hyatt millions of dollars in royalties.

Most business texts credit engineer Ted Hoff at Intel Corp., based in Santa Clara, Calif., with having fathered the microprocessor between 1969 and 1971. But Hyatt asserts that he put together the requisite technology a year earlier at his short-lived company, Micro Computer Inc., whose major investors included Intel's founders, Robert Noyce and Gordon Moore. Micro Computer invented a digital computer that controlled machine tools, then fell apart in 1971 after a dispute between Hyatt and his venture-capital partners over sharing his rights to that invention. Noyce and Moore went on to develop Intel into one of the world's largest chip manufacturers. "This will set history straight," proclaimed Hyatt. "And this will encourage inventors to stick to their inventions when they're up against the big companies."

Hoff still believes that his Intel group legitimately beat Hyatt to the punch. Yet some patent lawyers say Hyatt's new patent appears to apply to all microprocessor chips and the millions of personal computers and other products (from pocket calculators to videocassette recorders) that depend on them. Industry executives by and large are keeping mum, but if Hyatt's patent is broadly interpreted by courts, it could make him super-rich. According to analysts, a standard nonexclusive licensing fee of 3% of the value of computer products sold would translate into a $210 million payment just for last year.

A perennially broke inventor, Hyatt could certainly use the cash. In 1968 he quit a well-paying job as a Teledyne engineer to try to solve "the chip problem" out of a makeshift laboratory in the living room of his three- bedroom house in Reseda, Calif. He used all his $10,000 savings before he finally figured out a method to mount a series of tiny computer components on a silicon chip. "I had setbacks, but I never had any doubts," he recalls. "When the inventive drive comes, you have to follow it." Despite his continuing research and perseverance, Hyatt earned less than $40,000 last year as an aerospace consultant. "I'm struggling to make my next mortgage payment," he says.

Hyatt says he's not out for great wealth, only recognition and enough royalties to fund future experimentation. That attitude is admirable -- and wise. If Hyatt pushes for too much money, he will surely face lengthy and costly litigation from scores of computer companies that will try to overturn his "single chip" patent or at least narrow its scope. In all likelihood, he will face protracted courtroom battles anyway. One argument likely to be used against Hyatt is that he never translated his invention into working products. Another line of attack is the principle in patent law of "prior art." This holds that a patent could be invalidated if someone proves that he previously invented a microprocessor identical to Hyatt's, even though it was not patented.

But Hyatt has managed to survive two decades of objections by patent examiners, who demanded and ultimately received convincing proof of Hyatt's originality. That fact alone may inspire many computer firms to reach out-of- court settlements with him.

With reporting by Patrick E. Cole/Los Angeles