Tech company Monster, best known for co-designing the original Beats By Dre headphones, is now suing Beats Electronics, and co-founders Jimmy Iovine and Dr. Dre.
In the suit that was filed in San Mateo Superior Court, Monster CEO Noel Lee, claims that Iovine and Dre fraudulently stole the design and technology behind the popular headphone brand. The suit claims that Beats serviced the role of Monster to design and engineer the product while also learning about manufacturing the device to sell and profit at the expense of Lee and his company.
Beats originally announced their plans to not renew its deal with Monster in 2011, leading their partnership to come to an end in 2012. If Lee and Monster would have been retained by Beats Electronics, his 5 percent share of the company would have equaled around $100 million when the company was purchased by Apple for $3 billion in 2014. It's not known if Lee is seeking a total of $100 million in the lawsuit, but the report does state that he is seeking punitive damages.
Not only is Lee claiming that Beats Electronics stole his manufacturing and product, but that they did so through "sham" business transactions, most notably Beats' deal with HTC in 2011. In 2011, HTC invested a total of $300 million into Beats Electronics, which made them the majority share holder of the company. In 2013, a year after the deal expired with Monster and a year before the sale to Apple, Iovine and Dre bought back the shares from HTC, which Lee claims was all done to push himself and Monster out of the picture.
Last year, tech website Gizmodo dug deeper into these claims in an interview with Lee and his son, where they spoke in detail about the situation and how they believe they were taken advantage of by Beats. Apple, nor Iovine or Dre have yet to comment on the suit. We will continue to update this story as more details are made available.
Beats originally announced their plans to not renew its deal with Monster in 2011, leading their partnership to come to an end in 2012. If Lee and Monster would have been retained by Beats Electronics, his 5 percent share of the company would have equaled around $100 million when the company was purchased by Apple for $3 billion in 2014. It's not known if Lee is seeking a total of $100 million in the lawsuit, but the report does state that he is seeking punitive damages.
Not only is Lee claiming that Beats Electronics stole his manufacturing and product, but that they did so through "sham" business transactions, most notably Beats' deal with HTC in 2011. In 2011, HTC invested a total of $300 million into Beats Electronics, which made them the majority share holder of the company. In 2013, a year after the deal expired with Monster and a year before the sale to Apple, Iovine and Dre bought back the shares from HTC, which Lee claims was all done to push himself and Monster out of the picture.
Last year, tech website Gizmodo dug deeper into these claims in an interview with Lee and his son, where they spoke in detail about the situation and how they believe they were taken advantage of by Beats. Apple, nor Iovine or Dre have yet to comment on the suit. We will continue to update this story as more details are made available.
source: complex.com By Zach Frydenlund
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