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Monster, the co-designer of the original Beats by Dre headphones, is suing Beats Electronics and its co-founders Dr. Dre and Jimmy Iovine, USA Today reports.
A lawsuit filed in Northern California this week says that Lee and Monster invented the technology behind the Beats By Dre headphones. Furthermore, the suit alleges that Dre and Iovine conspired to cut out Monster and its CEO Noel Lee’s involvement, and committed fraud in the process.
HTC invested $300 million in Beats in 2011 before Beats and Monster’s five-year manufacturing and distribution deal ended. In 2013, Iovine and Dre bought back the entirety of Beats, a year before Apple acquired the company for $3 billion.
The suit claims that Beats used its “change of control rights” to fraudulently get the headphones away from Monster. “Had the partnership expired on its own terms, there would have been no transfer of Monster’s ‘Beats By Dr. Dre’ product line.”
HTC and Beats board member Paul Wachter are among the defendants listed in the suit.
USA Today writes: “After severing ties with Monster, Beats was purchased by Apple for $3 billion. But as the Beats co-founders made millions, Monster lost millions from its investment in the rise of Beats, the suit charges. 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.”
Monster and Lee are asking for punitive damages.
Related: NFL Bans Players from Wearing Beats by Dre Headphones