Dr Dre to face jury in Beats headphones case
Dr Dre will be facing a jury after a California appeals court allowed a former hedge fund manager to proceed with his case against Beats Electronics. The dispute has to do with royalties over the Beats headphones range.
The plaintiff, Steven Lamar claims that he is in fact the original “founder of Beats headphones, its design and corporate identity”. He claims that he had done all of the prep work that went into setting up the company. In his case he is demanding a piece of the royalties on future sales of Beats headphones made from the original design, instead of the previously agreed four percent.
This appears to be a long and ongoing messy legal battle. Back in 2006 Dr Dre and co-founder Jimmy Iovine sued Steven Lamar and accused him not meeting contractual agreements and planning to release his own Beats headphones range without involving Dr Dre. It was after this case that they settled and agreed to pay Lamar the four percent royalty.
Last year, Lamar’s claims were rejected by a judge in the Los Angeles superior court. On Monday, California appeals court judge Roger Boren overturned the original ruling. The judge decided that the royalty agreement made between Lamar and Beats co-founders Dr Dre and Jimmy Iovine was “ambiguous” enough that it should go before a jury.
More than one case
It is interesting to note that Dr Dre and Iovine have been dealing with other lawsuits since Apple bought Beats for $3 billion two years ago.
This court case sounds like the typical story of the big guy taking advantage of the little guy. Dr Dre and his co-founder insist that Lamar only agreed to a one product deal. However, Lamar has proof that they discussed future models of the Beats headphones.
“Based on the extrinsic evidence presented and the language of the contract, we find that it is equally, if not more, plausible that the parties contemplated the interpretation for which Lamar advocates. There is no language in the contract limiting the agreement to a single model or product. Instead, the focus of the agreement is on the patented design on which the parties collaborated. Lamar has presented evidence that other headphone models, such as the Solo, were protected by the same patent granted on the headphones design illustrated in Schedule I of the Royalty Agreement. He has also presented evidence that the parties, including Brunner, contemplated that a wireless model based on the headphones design would be covered by the Royalty Agreement. Thus, the agreement is certainly reasonably susceptible to an interpretation that it covers more than just the original, Studio, headphone model.” Said Judge Boren in his ruling
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