Pentagram sued over Beats By Dr. Dre royalties

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Published:  May 22, 2014
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Steven Lamar, founder of Jibe Audio, has filed a lawsuit against Dr Dre, Jimmy Iovine (Beats By Dr. Dre co-founder) and designer Robert Brunner, former partner at Pentagram, over the shared royalties of Beats by Dr. Dre headphones.

The row surfaced with the news of Apple’s reported $3.5 billion acquisition of Beats. The endorsed headphones have proved immensely popular since their launch in 2008, but most of their company value having grown since 2012, valued at over $1.8b. The headphones retail from anywhere between $130 — $500, a cost recently lampooned on ABC’s The Checkout.

Lamar, a former hedge fund manager, claims he is a co-founder of the Beats brand, and has stated a breach of contract over royalties. In a court statement, Lamar said that he proposed the idea of a celebrity-endorsed set of headphones, specifically, Dr. Dre. Having discussed this idea with Iovine (then chairman of Interscope), Lamar approached Brunner, when at Pentagram, to develop the product design and the brand identity.

According to Lamar, in a 2006 legal settlement Iovine and Dre agreed to pay four percent of the royalties on the sold headphones to Pentagram, who would then distribute half of this payment to Jibe and Lamar. Lamar claims that up to this day he has not received royalty payments for all the ‘covered headphone’ models, as agreed upon in the original settlement. He is now suing on the grounds of: breach of contract, breach of good faith, bad faith denial of contract, breach of fiduciary duties, declaratory relief and accounting.

You can read the cross-complaint in full here.

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