Pentagram and Ammunition sued in Beats By Dr. Dre royalties row

The consultancies are being sued alongside rapper Dr Dre, Beats By Dr. Dre co-founder Jimmy Iovine and designer Robert Brunner, a former Pentagram partner and co-founder of Ammunition.

The action comes as Apple is reportedly set to buy the Beats by Dr. Dre brand for £1.9 billion.

It has been brought by Jibe Audio and its founder Steven Lamar, who claims he is one of the founders of the Beats By Dr. Dre brand.

In the court statement, Lamar says that in 2006 he discussed his concept for celebrity-endorsed headphones with Iovine, who was then chairman of record label Interscope. Iovine proposed that Dr Dre endorse the headphones.

Lamar says he engaged Brunner, then at Pentagram, to develop designs and branding for the headphones, including product designs, logos and packaging.

Lamar also says that he discussed a potential distribution deal with Apple, before Monster was chosen as the eventual Beats By Dr. Dre distribution partner.

In a 2006 legal settlement, Lamar says Iovine and Dre agreed to pay 4 per cent royalties on all ‘covered headphones’ sold by Monster and others to Pentagram. Pentagram would then pay Jibe and Lamar half of these royalties.

Lamar claims that to date he has only received royalty payments for the Studio model of Beats Headphones, and not for any of the other models, such as Solo, Pro and Wireless.

Lamar also claims that Brunner, who co-founded Ammunition in 2007, ‘surreptitiously negotiated’ a separate agreement with Iovine and Dre, and cut Lamar out of the royalty stream. Lamar says he only discovered this at the end of last year.

In an earlier action, filed in January, Pentagram says that it ‘owes no obligation to Jibe and Lamar under the Pentagram-Lamar Settlement Agreement [2006]’.

In a cross-claim, filed to the Superior Court of California, County of Los Angeles on 16 May, Lamar is suing on a number of complaints.

He is suing Pentagram for breach of contract, breach of good faith, bad faith denial of contract, breach of fiduciary duties, declaratory relief and accounting.

Brunner and Ammunition are being sued for intentional interference with contractual negotiations, negligent interference with contractual relations, intentional interference with a prospective economic advantage and negligent interference with a prospective economic advantage. Brunner is additionally being sued for breach of fiduciary duties.

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You can read the cross-complaint in full here.