MONSTER & NOEL LEE v. BEATS ELECTRONICS & DR. DRE NEWS RELEASE

January 13, 2015

 

MONSTER AND LEE FILE FRAUD SUIT AGAINST BEATS ELECTRONICS, JIMMY IOVINE & DR. DRE

FOR PIRATING THE “BEATS BY DR. DRE” LINE OF HEADPHONES

 

BURLINGAME – January 6, 2015 – Monster, LLC and Head Monster, Noel Lee, brought a 

lawsuit alleging fraud against Beats Electronics, rapper and record producer Andre Young, a/k/a 

Dr. Dre, and music mogul Jimmy Iovine, among other defendants.  Monster and Lee invented 

the break-through technology behind the “Beats By Dr. Dre” headphones.  The action, filed 

today in San Mateo Superior Court in Redwood City, CA, claims the Defendants’ scheme 

involved pirating the “Beats By Dr. Dre” line of headphones from Lee and Monster.  The 

Complaint alleges that, other than his celebrity status as a rapper, Dr. Dre’s primary contribution 

was to bless Monster’s headphones when he exclaimed: “That’s the shit!”

The Complaint also asserts Defendants attempted to re-write history by: concealing the roles of 

Monster and Lee in designing and engineering the critically acclaimed “Beats By Dr. Dre” line; 

covering up the fact that Monster and Lee educated Beats, Iovine, and Dre about engineering, 

manufacturing, distributing, and selling the headphones that Monster and Lee invented; and 

hiding that Monster leveraged all of its domestic and global distribution and retail relationships 

to make the “Beats By Dr. Dre” line a huge success.  The Complaint states that, after Defendants 

improperly took control of the “Beats By Dr. Dre” products, they severed all ties with Monster 

and Lee and then sold the Beats brand to Apple for $3.2 billion.  As alleged in the Complaint, 

Defendants made millions off the work of Monster and Lee, while the Plaintiffs lost millions.

“As stated in the Complaint, these claims arise out of deliberate acts of corporate betrayal in the 

consumer electronics industry,” stated Philip L Gregory, of Cotchett, Pitre & McCarthy, 

LLP, representing the Plaintiffs.  “The Complaint asserts Defendants, including Jimmy Iovine 

and Dr. Dre, engaged in a conspiracy and course of conduct to improperly take over Monster’s 

incredibly successful line of ‘Beats By Dr. Dre’ products, as well as Monster’s intellectual 

In their Complaint, the Plaintiffs state that, in January 2008, Iovine and Dre, acting as Beats, 

entered into a partnership arrangement with Monster to develop and promote Monster’s “Beats 

By Dr. Dre” product line.  According to the Complaint, Monster, not Beats, was responsible for 

inventing and developing the incredibly successful engineering, manufacturing, marketing, 

distributing, and sales channels of the “Beats By Dr. Dre” headphone line.  The Complaint goes 

on to assert that, in September 2011, months before Monster’s agreement with Beats was set to 

expire, Defendants improperly terminated the arrangement through a “Change of Control” 

provision in the contract, claiming HTC Corporation had purchased a 51% interest in Beats.  

According to Cotchett, Pitre & McCarthy’s Joseph W. Cotchett: “The Complaint claims that 

the initial fraud occurred when Beats exercised its ‘Change of Control’ rights in a sham 

transaction with HTC.  As a result, the Complaint contends Defendants fraudulently acquired 

Monster’s ‘Beats By Dr. Dre’ line of headphones.  According to the Complaint, had the 

partnership expired on its own terms, there would have been no transfer of Monster’s years of 

work on ‘Beats By Dr. Dre.’  In addition, the Complaint alleges Defendants also absconded with 

Monster’s global distribution chain, key retail relationships, and intellectual property.”  

The Complaint asserts that, in July 2012, less than thirty days after Beats took over Monster’s 

“Beats By Dr. Dre” product line, Beats repurchased the shares that had allowed the sham 

“Change of Control” transition to occur. At that point, as explained in the Complaint, Defendants 

had improperly acquired a company that had been built in partnership with Monster.  The second 

fraud alleged in the Complaint was when Beats set about to deceptively re-write history by 

claiming sole responsibility for the success of Monster’s “Beats By Dr. Dre” headphones.  The 

Complaint claims Beats manufactured a false narrative to erase the inventions of Monster and 

Lee in the eyes of the public, including dealers, consumers, and eventually Apple shareholders.

According to Forbes Magazine, Dr. Dre is now Hip Hop’s “Cash King”: “Thanks to Apple’s 

Beats buyout, Dre had the highest yearly earnings total of any musician ever evaluated by 

FORBES.  The $620 million sum is also more than the remaining 24 names on the Hip-Hop 

Cash Kings list—combined.”

“As a result of their corporate betrayal, the Complaint explains how Defendants were able to 

make hundreds of millions of dollars on the sale of Monster’s ‘Beats By Dr. Dre’ product line to 

Apple for $3.2 billion in 2014,” stated Gregory.  “The claims in the Complaint explain how 

Beats not only misappropriated the ‘Beats By Dr. Dre’ product line, but that Defendants then set 

out to further damage our clients’ reputation for developing the products. Our Complaint makes 

a strong case that the only ones damaged by the incredible success of these products were the 

inventors, Monster and Lee.” 

The case is Monster, LLC, et al. v. Beats Electronics, LLC, et al., Case No. [], in San Mateo 

County Superior Court in Redwood City, CA. A copy of the cover page of the Complaint is 

A copy of the Complaint, including exhibits, is available at:  www.cpmlegal.com.

Cotchett, Pitre & McCarthy, LLP represents Plaintiffs Monster, LLC and Noel Lee.