Jury rules Beats headphones owes ex-partner $25 million

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Dr Dre, music mogul Jimmy Iovine and their headphone company Beats Electronics have been ordered to pay a former partner 25.2 million US dollars in royalties.

A Los Angeles Superior Court jury found Wednesday by a 9-3 margin that Beats breached a contract with Steven Lamar and his company Jibe Audio and that he was owed compensation.

Dr Dre and Iovine, the music producer and co-founder of Interscope Records, were not in court for the verdict. Both testified during the three-week trial and sat in the audience for opening statements.

Dr Dre (right) and Jimmy Iovine. /AP Photo

The suit said Lamar in 2006 came to Dr Dre, whose real name is Andre Young, with the idea for celebrity-endorsed headphones. Attorneys for Lamar contended he was owed over 130 million dollars for a dozen different models of headphones.

The defendants acknowledged that Lamar was involved in initial plans, but argued he was only owed for one product, the original Studio model, and was already paid.

"The jury really validated our theory of the case, that Mr Lamar was involved in the founding of Beats," Lamar's attorney Stephen E. Morrissey said outside court. "It's not everything we were asking for, but we're happy."

Lamar said the award could grow because of future sales of headphones still on the market.

Beats attorneys declined comment outside court. A minimum of nine jurors had to agree to reach a verdict.

Beats Electronics LLC headphones /VCG Photo

The verdict, reached after three days of deliberations, did not break down separate amounts to be paid by each defendant.

Beats, which added a music streaming service after its 2006 founding as a headphone company, was acquired by Apple in a 3 billion dollars deal in May of 2014.

The lawsuit was filed four months earlier and does not name Apple as a defendant.

Apple representatives did not immediately respond to phone calls and emails seeking comment.

The 25.2 million dollars award is pocket change for Apple. Based on earnings in the past fiscal year, it generates that much revenue, on average, every hour of the day.

Source(s): AP