Beats hit with royalties suit over first model headphones

With the possibility of making billions in the rumored Apple-Beats deal, the high-end headphones company gets slapped with lawsuits.

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Sarah Tew/CNET

One side effect of making it to the big time is that all sorts of people come looking for a piece of the action.

While it has yet to be confirmed if Apple is indeed throwing down $3.2 billion for Beats Electronics, the high-end-headphones maker has already been slapped with two lawsuits.

The most recent suit was filed on Tuesday by the self-proclaimed creator of Beats headphones Steven Lamar, according to The Hollywood Reporter. He's claiming Beats owes him royalties.

Jimmy Iovine, along with rapper Dr. Dre, founded Beats in 2008. The company is best known for a top-selling line of headphones; it also plays in the competitive market for subscription-based, streaming music.

In the complaint filed Tuesday, Lamar claims he's the one who brought the idea of celebrity-endorsed headphones to Iovine in 2006 -- suggesting that Dre be the first famed sponsor. Lamar also details meetings he had with Apple executives regarding distribution of the Beats headphones in Apple retail stores. Ultimately, Beats went with Monster for its distributor.

What ensued over the next few months appears to be a convoluted tangle of companies, lawsuits, and royalty distribution disputes among Lamar, Iovine, and Dre. This mess was eventually smoothed out after a 2006 lawsuit in which Iovine and Dre agreed to pay Lamar a 4 percent royalty on the original headphones model.

And, this brings us to the crux of Lamar's current complaint. He now claims his royalties should have also included future versions of Beats headphones that resembled the original model.

Besides the Lamar suit, MOG founder and former Beats CEO David Hyman filed a lawsuit against the company last week saying he should get $20 million in unfairly denied compensation, according to 9to5Mac.

When contacted by CNET, Beats declined to comment.

Updated May 21 at 8:05 p.m. PT to note that Beats declined to comment.

 

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