SAN FRANCISCO (Reuters) - In a case testing the limits of free speech in cyberspace, lawyers for a dismissed Intel engineer told the California Supreme Court on Wednesday that he had the right to send e-mails to up to 30,000 Intel Corp. employees criticizing the company for firing him.

Lawyers for former Intel INTC.O engineer Ken Hamidi said that silencing him would set a dangerous precedent allowing firms to stifle free speech. But lawyers for the company argued that the chipmaker was not violating anyone's free speech in the case, but merely controlling access to its internal e-mail system, which it considered private property.

The Supreme Court hearing came after two lower courts ruled that Intel could legally prohibit Hamidi from flooding Intel workers with e-mails.

Hamidi, who now works for the state Franchise Tax Board, sent six e-mail messages critical of Intel's employment practices to up to 30,000 employees between 1996 and 1998 after being fired following a disability leave.

"What a ruling in favor of Intel would do would be to really increase censorship of core First Amendment rights to speech and criticism," defense attorney Karl Olson said after in an interview after the hearing.

Many civil liberties groups were shocked that the two lower courts sided with Intel and some have called the case a major test of freedom of speech on the Internet.

PRIVATE PROPERTY

Santa Clara, California-based Intel, the world's largest maker of microprocessors, said it was only protecting access to its internal e-mail system, which is its private property. Intel spokesman Chuck Mulloy said, "Our employees did not want to receive the e-mails."

The company argued that its internal e-mail system was private property and that it had the right to keep people from harming that property. "It is our private property just like physical property is private property," Mulloy said.

In oral arguments, Hamidi defense lawyer Bill McSwain said the e-mails did not constitute trespassing because Intel did not show there was damage to the property as a result, such as a breakdown in the computer system.

"The only alleged damage they claim was that it distracted people," co-defense attorney Olson said. "If the court rules in favor of Intel every time a large company doesn't like the content of what someone says in an e-mail they're going to try to get an injunction."

Justices asked the lawyers how e-mails would be considered different from regular mail, telephone calls and faxes and brought up a scenario where an activist blasts a million e-mails to the governor's office.

Lee Tien, a senior staff attorney with the San Francisco-based Electronic Frontier Foundation which filed a friend of the court brief in Hamidi's favor, said Intel's argument could pave the way to barring other forms of electronic signals or communication, like telephone messages and TV broadcasts.

The California Supreme Court decision is expected within 90 days.