Dr. Dre and Jimmy Iovine Slapped with $100 Million Lawsuit Over Beats Royalties
Both Dr. Dre and Jimmy Iovine have profited handsomely off the success of their Beats by Dre headphone empire, but a former partner is looking for his cut of the revenue.
According to The Hollywood Reporter, Dre and Iovine are being sued by entrepreneur Steven Lamar who claims he brought the celebrity headphones idea to the music moguls but they allegedly screwed him out of the deal. A trial is underway in Los Angeles Superior Court in the matter.
Lamar said he brought the idea to Dre and Iovine back in 2006 based on a design by Robert Brunner, a respected industrial designer. After the trio had a falling out, Dre and Iovine sued Lamar but both parties reached a settlement before it went to trial.
In the settlement, Lamar agreed to absolved his rights in exchange for four percent royalty points from the sale of the headphones. Then in May 2014, Dre and Iovine sold Beats by Dre headphones to Apple for a record $3 billion.
So at issue is whether or not Lamar is owed royalties for the headphone models sold after the initial agreement or if Dre and Iovine owes him royalties. Initially, a trial judge rejected Lamar’s claims but a California appeals court revived the lawsuit in Sept. 2016, citing that the royalty agreement was "ambiguous" enough that a jury must consider the factual conflict about the interpretation of the contract.
Dre and Iovine maintain that when the initial deal was made no one had an idea if Beats would become a success much less have different initiations of the headphones. Lamar insists that all of that was discuss points to a PowerPoint presentation from the early days where he contemplated different models and the parties' future collaboration on a "line of headphones."
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