Monster, who joined forces with with Dr. Dre and Jimmy Iovine in 2008, is filing a lawsuit against Beats Electronics, the firm acquired by Apple in May.
Monster CEO, Noel Lee, state in the lawsuit that he and Monster created the Beats By Dr. Dre technology, and that Dre and Iovine committed fraud by pirating the headphones away from Lee and Monster. Lee states his company was “betrayed” by Beats Electronics when the two companies went their separate ways in 2012. He continues on to say that Beats has gone on to try to erase Monster’s contribution to its headphones.
The lawsuit was filed in San Mateo County Superior Court in California, and it charges that the Dre and Iovine hid the role that Monster and Lee played as it pertained to designing and engineering the headphone line, in addition to educating the pair about engineering, manufacturing, distributing, and selling the headphones that Monster and Lee invented.
Beats was purchased for $3 Billion by Apple back in May, after they severed ties with Monster. Though Dre and Iovine made a fortune as a result of the sale, the lawsuit alleges that Monster lost millions of dollars from its investment of Beats. If Lee retained his original 5% interest in Beats, his total stake in the Apple deal would have been worth over $100 million, according to the lawsuit.
HTC Invested $300 million (a 51% stake) in Beats in 2011 which netted Dre and Iovine $100 million each Forbes estimated, even before Beats and Monster’s five year manufacturing and distribution deal ended. By 2012, the Monster and Beats decided to split. Dre and Iovine bought back the entirety of Beats from HTC in 2013. Monster lists HTC and Beats board member Paul Wachter among the defendants.
According to Joseph Cotchett, an attorney with the California-based law firm of Cotchett, Pitre & McCarthy, which is representing Monster, those transactions were a “sham” that Beats used to exercise its “change of control rights” to fraudulently get the headphones away from Monster.” He continued by saying: “Had the partnership expired on its own terms, there would have been no transfer of Monster’s years of work on Beats By Dr. Dre.”
Monster and Lee are asking for punitive damages. Apple, who now owns Beats Electronics, had no comment on the lawsuit.
Last year Gizmodo ran a in-depth article breaks down the partnership between Monster and Beats Electronics.