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Thread: Monster Sues Apple's Beats Over Previous Headphone Deal

  1. #1
    What's Jailbreak? Akshay Masand's Avatar
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    Default Monster Sues Apple's Beats Over Previous Headphone Deal

    Apple’s Beats is being sued by the audio company, Monster, which asserts that cofounders Jimmy Iovine and Dr. Dre committed fraud by stealing the Beats by Dr. Dre headphone lineup from Monster and its CEO Noel Lee, who claims to have invented the popular headphones in a “sham” sale to HTC. Monster and Lee are claiming to have lost millions of dollars from its investment in Beats after Iovine and Dre misappropriated the Beats by Dre headphone line through a 2011 sale to HTC. Here, it should be noted that HTC is among the defendants listed in Monster’s filing as well.

    The complaint alleges that Beats hid the collective work that Monster and Lee put into the design, manufacture and distribution of the original Beats headphones. Iovine and Dre then sold 51% of the company to HTC for $300 million. Soon after the deal with HTC, Iovine and Dre reacquired 25.5% of Beats, allowing them to exercise a change of ownership clause that ended up severing ties with Monster.

    After the two had purchased control of Beats in 2013, Lee drew down his stake in the company from 5% to 1.5% and then eventually to nothing. Roughly eight months later Beats was acquired by Apple for $3 billion which represents a huge windfall for Iovine and Dre but nothing for Lee or Monster. The plaintiffs are arguing that if Lee kept his 5% it would be worth more than $100 million after the acquisition. As a result, Monster and Lee are suing for putative damages.

    It isn’t a surprise to find Beats in yet another lawsuit as the company seems to have been riddled with several over the past few years. The lawsuits range from plaintiffs who claim to have designed the headphones, invented technology used within the device lineup and in some cases even coming up with the idea of selling a fashionable headphone at premium prices. We’ll have to see how the company fares against Monster and Lee as the company just somewhat recently got out of a lawsuit with Bose.

    Source: USA Today

    Twitter: @AkshayMasand

  2. #2
    Is it just me or does this lawsuit being recently filed seem fishy? Why not file suit before it was sold to Apple?

  3. #3
    Livin' the SPIDEY Life SpiderManAPV's Avatar
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    Quote Originally Posted by scorpio02150 View Post
    Is it just me or does this lawsuit being recently filed seem fishy? Why not file suit before it was sold to Apple?
    There wouldn't be money before it was sold to Apple. The amount they'd be able to claim would be next to nothing until that $3 billion changed hands.

    Just your friendly neighborhood Spider-Man!

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