Monster Sues Beats Over Bad Breakup

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Monster Sues Beats Over Bad Breakup

Before Apple had Beats, Monster did. Now, Monster is suing the Beats brand for dumping them, stealing their technology and damaging their reputation according to USA Today. The report details how Monster says Beats scammed them, including HTC in the mix:

Even before Beats and Monster's five-year manufacturing and distribution deal ended, HTC invested $300 million in Beats in 2011.

Iovine and Dre bought back the entirety of Beats in 2013, a year before Apple acquired the company for $3 billion. Monster lists HTC and Beats board member Paul Wachter among the defendants.

Those transactions were a "sham" that Beats used to exercise its "change of control rights" to fraudulently get the headphones away from Monster, said Joseph Cotchett, an attorney with the California-based law firm of Cotchett, Pitre & McCarthy, which is representing Monster. "Had the partnership expired on its own terms, there would have been no transfer of Monster's years of work on Beats By Dr. Dre."

The report adds that Monster CEO Noel Lee claimed in a previous interview that Monster developed the initial technology.

Lee said that Monster made 150 samples before Dre and Iovine saw any prototypes. "They went through 20 before it felt right," Lee said.

The report also points to a Gizmodo article from last year where, according to USA Today, "Monster founder Noel Lee and son Kevin Lee shed light on how they were outmaneuvered by the might of Dre, Iovine and Interscope and suggested that they weren't properly compensated for the development of the original headphones."

As USA Today points out...

Had Lee retained his original 5% interest in Beats, his total stake in the Beats-Apple deal would have been worth over $100 million, the suit alleges.

It impossible to tell at this point whether Lee and Monster have a case, or if they're just sour on a missed opportunity.

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