A Los Angeles Superior Court jury has ruled against Beats co-founders Dr Dre and Jimmy Iovine, and as a result, the two will now have to pay their former business partner Steven Lamar a sum of $25,247,350.
Lamar claimed the idea for ‘celebrity endorsed headphones’ and later put it forward to Dre and Iovine in the year 2006. The original Beats headphones were based on the design Lamar helped propose along with designs by renowned industrial designer Robert Brunner. Both the parties had a fall out after which a settlement was drafted.
However, as per the lawsuit filed by Lamar in the year 2014, he alleged that both Dre as well as Iovine had violated the contract and should pay him lucrative loyalties from the sale of three Beat headphones designs. The case was dismissed by a judge but was later revived again by an appeals court and eventually went to trial in early June.
Dre and Iodine argued that Lamar was only entitled to the royalties from the sale of first Beats headphones, which led to controversy on whether Lamar had a settlement based on one Beats product or if it included the ‘celebrity endorsed headphones’ that was released later.
However, the jury finally made a decision that Lamar had met all the terms of his contract and owed royalties on three Beats models- the Studio 2 Remastered, the Studio 2 Wireless, and the Studio 3-resulting in the payment of $25,247,350. He had been initially seeking royalties of more than $100 million.
With the Beats Studio 3 headphones being on sale still in the market, the verdict means Lamar will continue to get royalties on the sales still. Moreover, he is also entitled to prejudgment interest as well as attorneys’ fees as per California law, which makes total amount payable to Lamar $40 million.