From the excellent Commodore books by Brian Bagnall:

While the engineers were showing off the new PET models, John Feagans noticed Bill Gates step up to one of the demo computers. “He was looking over his shoulder,” recalls Seiler.

“Gates walked up to our machine and played around with it.” What Feagans saw amazed him. Gates typed a simple command and the screen displayed the word MICROSOFT.

“If you put WAIT 6502 and then a number, it would print MICROSOFT that many times,” says Seiler. Gates cleared the screen and walked away, unaware Feagans had observed his deed.

Feagans soon realized Gates had snuck an Easter egg into Commodore BASIC. “There was another guy who did the first work on BASIC but Gates was working on it near the end. That’s how small the company was,” says Seiler.

Gates used the hidden code to fingerprint this particular version of BASIC. “He put in something in the PET because he was real suspicious of people like me stealing his BASIC on paper tape,” says Seiler. If someone attempted to incorporate BASIC into a machine using Gates’ code, it would be easy to check if the code originated with Micro-Soft.

Feagans felt perturbed because he had previously scanned through the code searching for hidden messages and found no discernable words. “It wasn’t in ASCII where you could see it. Gates had fiddled with a couple of bits with the ASCII character set, so it didn’t show up when you just looked at a raw binary dump,” says Seiler.

Feagans vowed to hunt down the hidden message and remove it from Commodore’s code. “He was just so perturbed that he had put that in there,” says Seiler. “Feagans is kind of a perfectionist like that.”