Microsoft Loses an Appeal

An appeals court will not reconsider the decision that mingling Windows and Internet Explorer is illegal. Also: Intel opens design center in Malaysia.... Vishay buys General Semiconductor.... and more.

An appeals court refused on Thursday to reconsider its decision that Microsoft illegally mingled its Windows operating system and Internet browser, handing the company a setback in its four-year antitrust battle with the government.

The U.S. Court of Appeals for the District of Columbia denied Microsoft's (MSFT) request in a brief order, clearing the way for the case to be sent back to a lower court to decide Microsoft's penalty for being an illegal monopoly.

"Nothing in the court's opinion is intended to preclude the District Court's consideration of remedy issues," the appellate judges said.

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Looking east: Intel announced plans to open its new network processor design center in Malaysia, its first in Asia.

The Southeast Asian country is expected to assemble, test and package the Pentium 4 chip, said Craig Barrett, chief executive of Intel (INTC).

These activities "demonstrate how we are building on Malaysia's manufacturing expertise to expand into new areas," Barrett said in a statement during a brief visit to Malaysia's northern Penang state.

"Manufacturing industries focused on (research and development), skill development and continued investment will remain competitive in the global market," Barrett said.

In a separate interview, the Intel CEO predicted that PC demand would improve during the second half of the year as students purchase new computers for schools and increased buying for the holiday season. Microsoft's introduction of its new Windows XP operating system will also help.

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Semiconductor deal: Vishay Intertechnologies is buying rival General Semiconductor (SEM) for $538.9 million in stock, in a deal that will add specialized semiconductors to its product line.

Vishay (VSH) is also assuming $229.4 million in debt for the electronic parts maker.

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Hollywood medicine: The government approved a tiny camera-in-a-capsule that patients can swallow to give doctors a close-up view of their small intestine.

The camera painlessly winds its way through the digestive tract, using wireless technology to beam back color pictures of the gut.

The video pill, called the M2A Swallowable Imaging Capsule, is made by Israel-based Given Imaging. "It's very sci-fi, and initially when the people from Given approached me two years ago I didn't believe it" could work, said Dr. Blair Lewis of New York's Mount Sinai School of Medicine, who tested the video pill on 20 patients and determined it works.

"I have been shown to be wrong; it is believable and shows tremendous promise," Lewis said, estimating that many of the some 25,000 people with internal bleeding of undiagnosed causes might be candidates to try the video pill.

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Commuter fatigue: Mark Perry, the chief financial officer of Covad Communications Group is stepping down from his post "to pursue other interests," the company said.

Covad (COVD) spokeswoman Martha Sessums said Perry likely was tired of traveling to Santa Clara, California, from his home in Denver.

Four finance executives will share Perry's duties while Covad searches for a replacement.

AP and Reuters contributed to this report