Monster is suing Beats over its deals with HTC and Apple.
Audio giant Monster is suing Beats Electronics LLC - owned by Apple - over alleged "fraud and deceit" in the way that it gained control of the popular brand of Beats by Dre headphones. Monster and Beats formed a partnership in 2008 and developed a hugely successful line of high-end headphones.
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According to a suit filed in San Mateo County Superior Court in California on Tuesday (January 6, 2014), Monster engineered the success of the headphones - worn by numerous celebrities - before being unfairly cut out when Beats was sold to Apple last year. The suit names Beats co-founders Jimmy Iovine and Dr Dre as well as HTC America Holdings Inc.
According to the complaint, the Beats head-honchos fraudulently acquired the product line including all of its development, engineering, manufacturing, marketing and distributing. In 2011, HTC said it would buy a 51 per cent stake in Beats for $309 million, though Beats bought back half of the interest in the company soon after the transaction, the documents state.
Furthermore, the suit alleges that Iovine and Dr Dre "improperly erased" Monster and its co-founder Noel Lee from Beats' history. Monster seeks general and special damages as well as punitive damages against Beats, HTC, Iovine and Dr Dre.
In May 2014, Apple acquired Beats in order to enhance its standing in the music industry and turn the Beats Music platform into a strong rival to Spotify and other streaming services. The new service will launch in the United States on January 21, 2014 - an advertisement for the service starring Ellen DeGeneres was aired during Super Bowl XLVIII.
Beats are yet to comment on the suit.
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