Monster sues Beats, its founders and HTC over what it calls a "sham transaction" to end partnership

[Shawn Knight]

Monster has filed a lawsuit against Beats Electronics, makers of the popular Beats by Dre headphones, as well as its founders Dr. Dre (real name Andre Young) and Jimmy Iovine and Taiwanese smartphone maker HTC for allegedly working together to boot Monster out of its partnership with Beats before the company was acquired by Apple last year for $3 billion.

Monster was instrumental in helping to launch the Beats brand of headphones in July 2008. The company claims it developed, manufactured and distributed the headphones on Beats’ behalf.

The problem, as noted in the suit filed in Superior Court in San Mateo County, California, primarily targets Beats’ deal with HTC in 2011. At that time, Beats sold a 50.1 percent controlling stake in their company to the handset maker for $300 million.

The suit alleges that Beats then bought back 25.5 percent of its shares from HTC less than a month after the initial deal closed and acquired the remaining stake in 2013.

Beats then exercised a change-of-ownership clause in its agreement with Monster enabled due to the HTC deal and as a result, Monster had to hand over all of the intellectual property related to the line to Beats. It’s a move that cost Monster millions in lost revenue, the suit claims.

Monster CEO Noel Lee also sold off his five percent stake in Beats, the last portion of which was reportedly sold in September 2013 after Lee was allegedly told that there was no “liquidity event” (an acquisition) planned for the next couple of years.

That information reportedly contradicts what Iovine and Apple Senior Vice President Eddy Cue said at a technology conference, noting that the acquisition was several years in the making. Had he held on to the five percent stake, it would have been worth more than $100 million following the Apple acquisition.

If true, the business deal certainly seems shady but then again, exercising a clause in a contract isn’t exactly a crime. Either way, it’ll no doubt be interesting to see how this matter plays out in the coming months. 

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https://www.techspot.com/news/59333-monster-sues-beats-founders-htc-over-what-calls.html

 

[Kevin82485]

Monster makes some of the most overpriced crap.

 

[Guest]

May the best money win

 

[JakeT]

Monster makes some of the most overpriced crap.

And Beats and Apple don't?

 

[Jamesbrah]

Monster makes some of the most overpriced crap.

It may be overpriced, but they managed to market the overpriced.. that's what's important.
There's better quality, but it isn't appealing to the standard user. Beats changed that, and capitalized on peoples poor experience with headphones.

If you've only ever listened to standard apple headphones - then you have to agree, Beats sound like heaven.

 

[Nobina]

Monster makes some of the most overpriced crap.

And Beats and Apple don't?

Word.

 

[Guest]

At least Apple's products are reasonably priced, and give you a degree of a better experience over the cheaper competitors.

Monster products? Hardly. Your $250 HDMI cable won't make a lick of difference. Beats? Your $300 plastic toy headphones will sound worse than something that costs 10% as much from Monoprice.

 

[Guest]

"At least Apple's products are reasonably priced, and give you a degree of a better experience over the cheaper competitors."

Well, the second half of that sentence is usually true.

 

[Skidmarksdeluxe]

Monster makes some of the most overpriced crap.

And Beats doesn't???

 

[Pinkie Pie]

If there is one thing that Monster knows about, it's shams.

 

[Nobina]

At least Apple's products are reasonably priced, and give you a degree of a better experience over the cheaper competitors..

Apple products reasonably priced? People actually think that, lol.

 

[wiyosaya]

Monster sues everyone. It probably makes more on lawsuits than on its products.

 

[Uncle Al]

Sounds more like they should be suing the lawyers that drew up the deal rather than the company. Of course this comes from a man that thinks the punchline about lawyers in a bus, going over a cliff as "a good start" might be one of the best quotes of the 19th, 20th, and 21st century ..... but .... well .... you know!

 

[Guest]

Both are over-marketed garbage anyway. If consumers would do some research they'd learn there are a lot better products out there for more competitive pricing anyway. Audio Technica for example.

 

[Kevin82485]

And Beats and Apple don't?

I'm just LOLing at all of your for shitting on me for no reason. I didn't say Beats and Apple were reasonably priced or even good. All I said was Monster is crap.

 

[JakeT]

I'm just LOLing at all of your for shitting on me for no reason. I didn't say Beats and Apple were reasonably priced or even good. All I said was Monster is crap.

Not shitting on you at all. Kind of agreeing with you.

 

[Guest]

People actually using these garbage? Ridiculous name/look/designed etc.