Genesis Microchip CEO Abruptly Steps Down

The chairman and chief executive of Genesis Microchip Inc., which last week agreed to pay a settlement to Silicon Image Inc. to end a patent dispute, abruptly resigned Sunday.

James E. Donegan said in a statement that his departure was in the best interests of San Jose-based Genesis, which makes chips used in computer monitors and DVD players.

Genesis’ chief financial officer, Eric Erdman, will serve as interim CEO, and Jeffrey Diamond, a board member, will become chairman, the company said.

Genesis did not return calls seeking comment.

Sunnyvale, Calif.-based Silicon Image sued Genesis in April 2001, alleging that its rival infringed its patent for a method of connecting monitors to personal computers via a digital link.

The U.S. District Court in Richmond, Va., approved a settlement whereby Genesis acquired a license agreement for some of Silicon Image’s technology in exchange for an undisclosed fee.

Donegan, in his statement, said he “strongly” disagreed with the Silicon Image settlement.

Shares of Genesis fell 6 cents to $14.99 Friday on Nasdaq.