Monster Sues Beats, Dr. Dre and HTC for Fraud Over Stolen Headphone Tech

Discussion in 'Android News' started by dgstorm, Jan 7, 2015.

  1. dgstorm

    dgstorm Editor in Chief
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    Although the tech industry is awash in multiple patent lawsuits at any given time, it's pretty rare when we see an actual fraud lawsuit brought against a company in the tech world. That's exactly what just began though. Monster, Inc., the company famous for expensive cables and surge protectors is suing Beats, Dr. Dre and HTC for fraud related to the Beats by Dre headphones.

    Here's the gist of it... In 2008, Monster's founder, Noel Lee, worked out a deal with Dr. Dre and his fledgling Beats Audio company to design, produce and manufacture the “Beats by Dr. Dre” headphones. Since that time, The "high-end" headphones market has grown astronomically into a $1 Billion market with multiple celebrity endorsements. A vast majority of this market was spear-headed and is controlled by "Beats by Dre."

    The problem is that Monster got "shamed" out of their shares in the deal. In 2011 HTC famously bought a 51% stake in Beats Audio for $309 Million. Anyone in the mobile industry will remember that not long after that, Beats Audio bought back half of HTC's interest in Beats, and then eventually worked out a deal to sell all of it back.

    Monster alleges that Beats intentionally bought back the stock from HTC in order to purposefully cut out Monster altogether because of an ownership clause in the contract. According to Monster’s attorneys, “Had the partnership expired on its own terms, there would have been no transfer of Monster’s years of work on Beats By Dr. Dre.”

    Of course, fast forward to the present, and Beats Audio was bought up by Apple for $3 Billion last year. Monster contends that it was their work in designing the headphones that Beats profited from, and they deserve a cut of the pie, to the tune of $100 million. Monster specifically claims that Beats made misleading claims in 2013, because Beats claimed there weren't any pending “liquidity events” (i.e. a major transaction).

    Noel contends that if he had known about the Apple buyout, he would not have reduced his stake in Beats and missed out on the resulting windfall. Overall, this is going to be a tough case for Monster to prove in court. They have to prove that Beats intentionally planned all of this, and that there was malice involved if they want to win a settlement.

    What do you think? Does the whole thing smell stinky to you too?

    Source: Monster sues Beats and HTC for fraud over their headphone deal
     
  2. cr6

    cr6 Super Moderator
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    Both Monster & Beats are two extremely over priced brands that aren't worth the money imo, but that's just me.
    But yeah, smells a little fishy to me.


    S5 tap'n
     
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  3. johnomaz

    johnomaz Silver Member

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    It sounds like Beats found a way out of the Monster deal, a loophole in the contract. They used it and Monster got their panties in a bunch about it.
     
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  4. WERA689

    WERA689 Administrator

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    Noel Lee gets his panties in a bunch about a lot of things, and he's spent an inordinate amount of time in various courts. I suspect that this is just another. That said, something doesn't seem right about the whole Beats thing.
     
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  5. Jonny Kansas

    Jonny Kansas Administrator
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    Yup. Something seems a bit off, but this won't affect me either way...
     
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  6. FoxKat

    FoxKat Premium Member
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    Like @cr6 pointed out, both companies' products are way overpriced. Frankly their products are mediocre at best and they are profiting highly from marketing trickery and the lack of knowledge and experience of the average consumer as to what is a high end audio product, what is true flat frequency response in speaker and headphone technology and why that is the holy grail, and how power and audio signal is carried in wires, and what influences the sound as it's carried from device to preamp to amplifier to speaker.

    The average consumer knows nothing of wire gauge, whether the copper in that wire is low or high Oxygen and what if anything it actually means to them in regards to musicality. As for the headphones, "it's all about that bass, no treble" is what their target market understands, and they're being fooled out of their money in record millions or billions for it.

    Sent from my Droid Turbo on Tapatalk.
     
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  7. xeene

    xeene Gold Member

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    Sennheizer is so much nicer then beats and cost a lot less for a decent pair.
     
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  8. KaosMaster

    KaosMaster Senior Member

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    I only buy Skullkandi, there product is good for price points.
     
  9. cr6

    cr6 Super Moderator
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    Sennheiser is a great mid level brand. I have a pair of OTE headphones and use them when watching movies on my tablet. I go through earbuds though like their going out of style. Because I'm so hard on them, I usually buy cheap earbuds for everyday use. The ones that come with the Galaxy S phones aren't bad, they just don't last. I agree with Kaos, Skullcandy makes a fairly decent product for being as inexpensive as they are. For watching YouTube videos on my phone at night before bed, they work great.

    S5 tap'n
     
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  10. 94lt1

    94lt1 Super Moderator
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    Buy JL or westone or shure.. For iem's.. For cans.. I like pioneer... Yes.. The stereo company.. Or Sony..
     
    #10 94lt1, Jan 8, 2015
    Last edited: Jan 8, 2015
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  11. SquireSCA

    SquireSCA Silver Member

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    I can't believe that mediocre headphones went for $3B.
     
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  12. 94lt1

    94lt1 Super Moderator
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    I agree.. But they have a cult like following among the tone deaf "music lovers".. And in the gym.. I see tons of people wearing em.. Why??
     
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