Dr. Dre and his Beats Electronics partner Jimmy Iovine must pay $25 million (£19 million) to a former collaborator after he won a breach of contract suit against them.
A Los Angeles jury has ruled former hedge fund manager Steven Lamar was rightfully owed earnings from a pair of headphones sold through the rap mogul’s company. Lamar filed a lawsuit in 2016, claiming he was due royalties for the design of the original Beats headphones.
After the case was heard in court on Wednesday, it was determined that Lamar had fulfilled his contract and should be paid based on the profits from sales of three best over the ear wireless headphones for working out of the brand’s headphone models – the Studio 2 Remastered, the Studio 2 Wireless and the Studio 3.
Dr. Dre, born Andre Young, and Iovine argued Lamar was only due payment from sales relating to the initial headphone design. The latest ruling grants Lamar continued access to royalties from the Studio 3 line, which is still on sale, and compensation for his attorney’s fees, bringing his total take home to $40 million (£30 million).
Lamar maintained he played a key role early on in the firm’s existence by introducing Dre and Iovine to celebrated industrial designer Robert Brunner, who was brought on board to help develop the popular design of the early headphone line, and securing funding from investors. The stars sued Lamar in 2006, amid a contract issue, and accused him and his associates of planning to launch their own Beats audio products without Dre’s involvement, reports Billboard.com.
The two parties subsequently reached a settlement, which granted Lamar a four per cent royalty on the original headphones, but when he tried to claim additional compensation for alternate designs last year (15), his claim was shut down by a Los Angeles Superior Court judge.
Lamar challenged the decision and took his case to a California appeals court, where an official overturned the ruling, stating the royalty agreement was “ambiguous” enough to revive the dispute with a jury trial.
Dre and music label executive Iovine sold the Beats brand to Apple bosses in 2014, securing a whopping $3 billion for the company.