Last Friday, former hedge-fund manager Steven Lamar fired a legal salvo aimed at Dr. Dre, Jimmy Iovine and others with claims of breach of contract and demands to be paid as much as four percent of royalties on headphone sales.
According to his cross-complaint, he’s not only the founder of Jibe Audio, but also the founder of Beats Headphones. He’s also been called the “father of Beats headphones” by others.
In 2006, Lamar [says] he took his concept for celebrity musical artist-endorsed headphones to Iovine, the co-founder of Interscope Records.
…Lamar now claims that a surreptitiously negotiated “separate agreement was made with Iovine, Dre, and/or Beats Electronics” which “effectively cut Jibe and Lamar out of the royalty stream.”
This is the first time a lot of people have heard of Steven Lamar, who clearly has a case. But this isn’t the first time Dre and Iovine have purposely undercut business partners. However, we won’t jump to any conclusions because it very hard to speculate the outcome from the information available right now.
Considering the deal with Apple is pretty much done, and that the suit is requesting past and future headphones sales royalties, this could really put a dent in folks’ pockets.