Dr. Dre and Jimmy Iovine are about to cash out in a big way, thanks to their reported multibillion dollar sale of Beats Electronics to Apple. But of course, with more money comes more problems…and more lawsuits. Hollywood Reporter is reporting that the music moguls are facing a lawsuit from former hedge-fund manager Steven Lamar. Lamar, who is the founder of Jibe Audio, claims that back in 2006 he took the concept for celebrity artist-endorsed headphones to Iovine. In his cross-complaint, Lamar says that he is the founder of Beats Headphones.
“Lamar’s concept envisioned a partnership between technology that would provide a superior audio experience and an iconic product design and brand identity promoted by a well-known and respected artists,” reads Lamar’s cross-complaint. “Iovine proposed that Dre be the celebrity musical artists to endorse the headphones.”
The complaint also contests that Lamar had proposed to sell Beats products in Apple stores. Beats, however, partnered with Monster for distribution instead with Iovine and Dre set to receive a 20% royalty from the deal and Lamar/Jibe taking a 5% royalty. Dre and Iovine then sued Lamar, accusing him of trying to produce his own line of headphones similar to Beats with the California-based design firm Pentagram. The suit was eventually settled.
Lamar now claims that Pentagram negotiated a separate deal with Beats that cut out Jibe from receiving any royalties which led to Lamar filing suit against Dre, Iovine, Beats, Pentagram, and the law firm that handles Pentagram’s rights. The self-proclaimed founder of Beats is suing all parties for “breaching the terms of the settlement agreement and royalty agreement, and bad faith denial of contract.” He’s also filed separate lawsuits against Pentagram and its law firm for “breach of fiduciary duties” and suing his former business associate for “tortuous interference for allegedly inducing Iovine, Dre and Beats to renege on their contractual obligations made eight years go.”
The full cross-complaint can be read here.