Beats is sitting pretty atop the Apple steeple, but in comes the angry mob. Monster, which helped design the original Beats by Dre headphones, is filing a lawsuit against Beats for a number of reasons, and it sounds like a high-school TV drama: Monster has accused Beats of stealing Monster’s technology, along with committing fraud in pirating the headphones away from the company.
Filed in San Mateo county Superior Court, the suit alleges that Beats co-founders purposely concealed the role of Monster in the creation of Beats by Dre; Monster also says it helped educate Beats with engineering, manufacturing, distributing and selling the headphones that Monster invented. Beats eventually broke ties with Monster, and was acquired by Apple for $3 billion. The fate of the two companies couldn’t be any different; Beats has been on a meteoric rise, while Monster has lost millions over the past few years.
If Monster CEO Noel Lee would have retained his 5-percent stake in Beats, it would have been worth upwards of $100 million, the suit says. Apple has yet to comment on the accusations. Beats and Monster originally had a five-year manufacturing and distribution deal; HTC also invested heavily in Beats in 2011, but Jimmy Iovine and Dr. Dre eventually bought the company back entirely in 2013, and was acquired by Apple last year. An attorney for Monster said Beats made those business moves to exercise its “change of control rights” to fraudulently get the headphones away from Monster.