Beats headphones founders Dr Dre and Jimmy Iovine are facing legal action after being sued by a former collaborator. Noel Lee, the Monster founder whose firm were involved in launching the headphone in the late 2000s, accused the duo of “pirating” his company’s technology.
Lee claims to have “lost millions” after a “sham transaction” in which Dre and Iovine are alleged to have taken control of the product unlawfully. Beats was bought by Apple after it severed its ties with Monster, which the tech giant paying $3 billion for the company.
Although Dr Dre lent his name and image to the now-iconic headphones, Lee says that the rapper, producer and former N.W.A. man contributed barely anything at all to their creation. It’s widely agreed that Dre’s endorsement played a pivotal role in their success, with marketing strategies arguably implying that he designed the headphones.
Lee claims that the decision to sell Beats to HTC in 2012 forced him to cut his share in the company to 1.25% from 5%. He claims that he had no other option than to sell the remaining stake at the end of 2013 for $5.5 million. Dre and Iovine made an estimated $66 million each during the HTC sale. HTC soon sold their shares back to Beats. Lee says that the HTC deal was a designed to take Beats out of his ownership. Beats was later sold to Apple for $3 billion in 2014. Lee claims that if he still has his 1.25% stake when the company was sold for a second time, he would have received in excess of $30 million, whilst his original stake would have been worth an estimated £150 million.
Beats bought back 25.5% of its own shares just a few weeks after the deal went through. This allowed Beats to sever its ties with Lee’s Monster brand because of a change-of-ownership clause.
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