Dr. Dre And Jimmy Iovine Ordered To Pay $25 Million To Former Beats Partner

Image: Beats

A Los Angeles superior court jury has ordered Beats co-founders Jimmy Iovine and Andre “Dr. Dre” Young to pay former business partner Steve Lamar just over $34 million over royalties on the sales of Beats headphones, Billboard reports. The ruling expands a 2007 settlement granting Lamar royalties for only one pair of headphones, the Beats Studio.

The story of Beats has frequently been framed as a two-person collaboration between Dre and Iovine, as well as a struggle against the company’s former manufacturer, Monster. But Lamar claimed to have presented the idea of celebrity-endorsed headphones to Iovine and Dre in 2006, and helped with the design of the Beats Studio headphone model along with industrial designer Scott Brunner. In 2007, after a falling out, Dre, Iovine, and Lamar reached a settlement, with Lamar receiving 4 per cent in royalties from every headphone sold, “but only one headphone, Beats Studio, was specified,” according to Variety.

In the 2016 appeal filed by Lamar and his company, Jibe Audio, Lamar argued he was entitled to more royalties based on the contract’s wording, as well as the continued use of his original design in subsequent models, and sought $146 million in royalties based on the sales of all Beats headphone models.

The appellate court reversed the original decision that stated Lamar was entitled to royalties only for the original Beats Studio headphones, finding that the contract is “ambiguous as to whether it contemplated royalties only for the Studio headphone model or for other headphones” sharing the original Studio headphone design language. The jury awarded Lamar royalties on three additional Beats headphone models: The Studio 2 Remastered, the Studio 2 Wireless, and the Studio 3. As the $US350 ($476) Studio 3 is still available for sale, that means Lamar will also receive royalties from that until it’s no longer available.

[Billboard, Variety]