Co-founders of Beats, which is now owned by AppJimmy Iovine and Dr. Dre have been ordered by a court to pay more than $25 million to their former business partner Steven Lamar.
The legal battle between the two sides started in 2014, when Iovine and Dr. Dre sued Lamar for false advertising in which he claimed he was also the co-founder of Beats. However, a jury ruled in favor of Lamar's claim, meaning that Lamar should also receive royalties from sales of Beats headphones.
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Iovine and Dr. Dre sold his company Beats to the Cupertino company in 2014 for $3 billion, receiving $2,6 billion in cash and $400 million in stock. Apple decided to buy Beats for several reasons – the headphones, the music streaming platform Apple Music and two of the company's top executives, Dr. Dre and Jimmy Iovine. Beats continues to operate as a separate brand, with the headphones using Bluetooth chips from Appyou.
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On Wednesday, a jury ruled in Lamar's favor, meaning he should receive royalties for the sale of the headphones. Studio 2 Remastered, Studio 2 Wireless a Studio 3. However, Iovine and Dr. Dre claim that Lamar should only receive royalties for the Beats headphones Studiobecause it is connected only to them.
The co-founders of the Beats brand should thus pay Lamar a total of $25. Given that Dr. Dre is hip-hop's first billionaire and Iovine is even richer, it shouldn't be a problem for them to pay the set amount. Of course, it is possible that both will appeal against the court's verdict. The legal wrangling will probably continue some Friday.
