Audio equipment maker Monster has sued Apple’s Beats Electronics over alleged “fraud and deceit” related to Beats’ acquisition of control of the rights to the Beats by Dr. Dre headphones, Reuters has reported.According to the suit filed in the San Mateo (Calif.) County Superior Court, Monster engineered the success of the headphones and was unfairly cut out before Beats was sold to Apple last year, Reuters reported, with the complaint naming Beats co-founders Jimmy Iovine and Dr. Dre, as well as HTC America Holdings Inc, as defendants.
Monster and Beats formed a partnership in 2008, developing the Beats by Dr. Dre headphones, while Beats was bought by Apple last year in a deal worth US$3 billion.
According to the complaint, the defendants fraudulently acquired Monster’s Beats by Dr. Dre product line via a “sham” transaction with HTC, Reuters reported, with HTC stating in 2011 it would buy a 51 per cent stake in Beats for US$309 million, with Beats buying back half of HTC’s interest in the company soon after the transaction.
Reuters reported 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 Monster founder Noel Lee and Monster.
The complaint did not mention a dollar amount in damages, and is seeking general and special damages as well as punitive damages against Beats, HTC and the individuals named, Reuters reported.