Monster claims that Beats tech was ‘fraudulently acquired’ by Dr. Dre

Apple sued by Monster over Beats acquisition row

Monster is seeking damages in a lawsuit against Apple over the Beats acquisition, which has been described as ‘corporate betrayal’.

Monster claims that the Beats by Dr. Dre headphones were developed within an agreed partnership between co-founders Jimmy Lovine, Dr.Dre and Monster, however the company was not involved in the Apple acquisition whatsoever.

The lawsuit states that a ‘change of control’ clause was introduced when phone maker HTC bought a 51 per cent stake in Beats, draining the company of hundreds of millions of dollars, enabling the headphone franchise to be ‘fraudulently acquired’ by Beats, which went on to sell its brand to Apple for $3.2 billion.

The complaint claims: “Had the partnership expired on its own terms, there would have been no transfer of Monster’s Beats by Dr. Dre product line, including all development, engineering, manufacturing, marketing, distributing and retail right.

“Defendants also absconded with Monster’s global distribution chain, key retail relationships and intellectual property.”

Noel Lee, CEO of Monster, alleged that he was persuaded to sell his share to Beats for $5.5 million following a complaint over transparency concerns.

The five per cent that he sold back would have been worth over $100 million if they had waited until after the Apple acquisition.

This isn’t the first time Beats has been the target of a lawsuit, Bose previously claimed that the headphone manufacturer had infringed on the patented noise cancellation technology featured in its own headphones around the same that it signed a deal with Argos following a fall-out with Apple.

Apple has declined to comment.

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