📺 Stream EntrepreneurTV for Free 📺

Monster Sues Apple's Beats Over Alleged Fraud Audio-equipment maker Monster, which helped create Beats by Dre headphones, says it was unfairly cut out before Beats was sold to Apple last year.

By Reuters

entrepreneur daily

This story originally appeared on Reuters

Audio equipment maker Monster LLC has sued Beats Electronics LLC, owned by Apple Inc, over alleged "fraud and deceit" in the way that Beats acquired control of the rights to the popular "Beats by Dr. Dre" headphones.

Under a partnership formed in 2008, Monster and Beats developed "Beats by Dr. Dre", a line of colorful, high-end headphones that vie with the likes of Skullcandy Inc and Bose Corp.

According to the suit filed in San Mateo (Calif.) County Superior Court on Tuesday, Monster engineered the success of the headphones and was unfairly cut out before Beats was sold to Apple last year.

The complaint names Beats co-founders Jimmy Iovine and Dr. Dre as well as HTC America Holdings Inc, a unit of Taiwanese smartphone maker HTC Corp among others, as defendants.

Iovine is the co-founder of Interscope Records, a rap music pioneer that branched out to include acts like Lady Gaga and U2. Dr. Dre is a U.S. rapper and music producer.

The defendants fraudulently acquired Monster's "Beats By Dr. Dre" product line including all development, engineering, manufacturing, marketing, distributing and retail rights, via a "sham" transaction with HTC, according to the complaint.

In 2011, HTC said it would buy a 51 percent stake in Beats for $309 million. Beats bought back half of HTC's interest in the company soon after the transaction, the complaint said.

The complaint alleges the defendants used the change of control as an excuse to end its relationship with Monster in 2012, and that they had made millions off the work of Lee and Monster.

The suit alleges Iovine and Dr. Dre "improperly erased" Monster and Monster's founder Noel Lee from Beats' history.

Beats was not immediately available for comment.

The complaint did not mention a dollar amount in damages. It seeks general and special damages as well as punitive damages against Beats, HTC and the individuals named.

In May 2014, Apple bought Beats hoping to win points with the music industry and turn Beats Music into a strong competitor to Spotify and other streaming services.

(Reporting by Devika Krishna Kumar in BENGALURU; Editing by Ryan Woo)

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

These Coworkers-Turned-Friends Started a Side Hustle on Amazon — Now It's a 'Full Hustle' Earning Over $20 Million a Year: 'Jump in With Both Feet'

Achal Patel and Russell Gong met at a large consulting firm and "bonded over a shared vision to create a mission-led company."

Productivity

Want to Be More Productive? Here's How Google Executives Structure Their Schedules

These five tactics from inside Google will help you focus and protect your time.

Business News

These Are the 10 Most Profitable Cities for Airbnb Hosts, According to a New Report

Here's where Airbnb property owners and hosts are making the most money.

Side Hustle

How to Turn Your Hobby Into a Successful Business

A hobby, interest or charity project can turn into a money-making business if you know the right steps to take.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Starting a Business

This Couple Turned Their Startup Into a $150 Million Food Delivery Company. Here's What They Did Early On to Make It Happen.

Selling only online to your customers has many perks. But the founders of Little Spoon want you to know four things if you want to see accelerated growth.