Jimmy Iovine and Dr. Dre Unveil Beats By Dr. Dre 2011 Holiday Product Line-Up

Steven Lamar, who helped create Beats headphones in 2006, has filed a complaint against Dr. Dre and Jimmy Iovine claiming he’s owed royalties on most of the company’s latest headphones, according to the Hollywood Reporter. In the complaint, Lamar recounts the earliest connection between Beats and Apple—and that the Cupertino company was almost the first Beats distributor.

Back in 2006, Lamar first hatched the idea for a line of celebrity-endorsed headphones. He took the idea to Interscope Records co-founder Jimmy Iovine and asked if Dr. Dre would be the celebrity sponsor. Lamar worked with a firm called Pentagram to create the first design for what would become Beats headphones.

That’s when Ivovine introduced Lamar to Apple retail VP Jerry McDougal. Lamar suggested to McDougal that Beats headphones should be sold in Apple retail stores, even going so far as to design the packaging around that very idea. McDougal introduced Lamar to Don Inmon, the man responsible for product placement in Apple’s retail stores.

Ultimately Beats didn’t partner with Apple for distribution, instead deciding to go through Monster, LLC.

In the new Monster distribution deal, Iovine and Dre got a 20% royalty on all sales, and Lamar, who initially created the concept, only got a 5% cut. However, Dre and Iovine later filed a lawsuit against Lamar and his company, SLS International, for attempting to create a line of Beats-like headphones without their involvement, apparently because he was unhappy with his end of the royalty deal.

As a result of that lawsuit, Iovine and Dre agreed to pay a 4% royalty on some—but not all—headphone sales. Now Lamar is claiming that his royalties should have been applied to future models of Beats headphones that were similar to the version that originally launched. Instead, he’s only been paid for that original model.

After the Beats-Apple deal was first rumored, MOG founder (and former Beats CEO) David Hyman also filed a lawsuit against the company, saying that he should be paid $20 million in unfairly-denied compensation. Perhaps it’s safe to say that everyone really wants a piece of the Apple pie.

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4 Responses to “Beats co-founder Steven Lamar brings royalty claim, reveals the company’s early Apple connection”

  1. standardpull says:

    Everyone wants millions for the celebrity branding of mediocre consumer headphones. This is akin to American innovation in the 1980s – innovation by putting lipstick on the pig.

  2. As soon as someone is about to make a crap load of money, everyone will cry wolf. You can’t sue for hurt feelings.

  3. After taxes, Dr. Dre is not the first billionaire rapper, he still a millionaire. He would be off 200 million to reach a billion. Anyway, bigger question, why Beats? Easy answer. Samsung is coming out with their headset and already pushed out the Milk app, so off set that with the beats by Dr. Dre who already have a strong fan base and ‘the beat music’ app can challenge the milk app. Smart move by apple.