Dr. Dre, Jimmy Iovine Are Being Sued For Beats Headphone Fraud

January 7, 2015

Rapper and electronics mogul Dr. Dre and his Beats co founder and record producer Jimmy Iovine have been sued by their former partner video and audio cable maker Monster for fraud, with Monster alleging they were deceitfully cut out of business dealings leading up Apple’s $3 billion acquisition of Beats last year.

According to USA Today, Monster and its CEO, Noel Lee, claim to be co-inventors of the technology behind the Beats By Dr. Dre headphones and are accusing the Beats co-founders of concealing Monster’s role in the creation of the Beats technology.

Adds Consequence of Sound, in the suit Lee contends that Dre’s “main contribution was to bless Monster’s headphones when he exclaimed: ‘That’s the shit!’” The event at the centre of the complaint is a bit of a complicated ordeal, and goes back to a 2011 deal with HTC.

At the time of the deal Lee held a 5 percent stake in Beats as part of a partnership between the headphone maker and Monster. According to claims made in the suit, Dre and Iovine orchestrated a “sham” deal with HTC that eventually led to the cessation of the Monster partnership.

According to Lee, when he sold his stake in the company he was assured by Beats executives that there were no plans to sell the company for at least several years. Beats of course announced its $3 billion sale to Apple in May last year.

Apple’s acquisition landed Dre on the top of Forbe‘s list of the world’s highest paying musicians in 2014 and his $620 million earnings marked the largest single-year haul of any musician, ever. If he had retained his 5 percent stake in the company, Lee’s share would have been worth roughly $150 million.

Additionally, Monster goes on to say that Beats began to engage in Monster-bashing”, with Beats representatives threatening to pull Monster products from shelves. “Beats told Monster’s distributors and retailers to drop Monster headphones as a product line, forcing them to choose between Beats and Monster,” reads the suit. “These sales representatives and dealers were the same distributors and retailers that Monster had introduced to Beats.”

Monster and Lee are appealing for punitive damages. You can read the full complaint at Gizmodo. Apple has not commented on the suit.