A B727-200 ON TKOF FROM RNO; NV; ENCOUNTERS A GPWS AS IT CLBS TO A HIGHER ALT. A HILL 600 FT AGL AND SURROUNDING TERRAIN IS CLOSE TO THE GND TRACK OF THE DEPARTING ACFT.

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ON CLB OUT OF RENO INTL (WAGGE1 DEP) OUR GPWS ALERTED US TO 'PULL UP.' WE APPLIED MAX PWR AND CLBED UNTIL GPWS WAS SILENT. WE WERE ON THE SID EXACTLY AS PUBLISHED AND CLBING. WE COULD SEE WE WERE CLR OF ALL TERRAIN WHEN THE GPWS WENT OFF. WE PERFORMED STANDARD PROCS FOR A GPWS ALERT. #1 ENG EXCEED MAX LIMIT FOR 10 (BOOK LIMIT) SECONDS. WE CONTACTED COMPANY AND DISCUSSED THE SIT. MAINT CONFIRMED THAT WE HAD NOT EXCEEDED THE LIMITATION OF THAT ENG BECAUSE OF A HIGHER RATING ON THAT PARTICULAR ENG; SOMETHING WE KNEW AND CONFIRMED. MAINT; DISPATCH CONFIRMED WE WERE SAFE AND LEGAL TO CONTINUE THE FLT WITHOUT ANY EMER ACTION REQUIRE. WE USED STANDARD FOM PROCS TO HANDLE THE GPWS OCCURRENCE AND ENG SIT. WE REVIEWED ALL MODES OF GPWS ACTIVATION AND AT NO TIME WERE WE ANYWHERE NEAR ANY SCENARIO THAT WOULD ACTIVATE THE GPWS. MAINT WAS NOTIFIED OF THE FALSE WARNING AND OUR REACTION TO IT. I BELIEVE THAT A FAULTY GPWS SYS CAUSED US TO PERFORM PROCS THAT WEREN'T REALLY NECESSARY. IF THE ACFT WAS FLOWN IN STANDARD TKOF CONFIGN 1000 FT HIGHER THAN PRESENT SID REQUIREMENT (6412 FT) CLEAN UP ALT; WE WOULD NOT GET A FALSE WARNING LIKE WE RECEIVED. I WOULD RECOMMEND THAT THE STANDARD CLEAN UP ALT FOR ACFT BE 7412 FT.