A jury has found that Dr Dre, music mogul Jimmy Iovine and their headphone company Beats Electronics owe a former partner $25.2m in royalties.
The Los Angeles superior court jury found by a narrow 9-3 margin that Beats breached a contract with Steven Lamar and his company Jibe Audio.
The suit said Lamar in 2006 came to Dr Dre, whose real name is Andre Young, with the idea for celebrity-endorsed headphones. The plaintiffs contended Lamar was owed over $130m for a dozen different models of headphones, but the jury found he was only owed for three pairs in the Studio series.
The defendants acknowledged that Lamar was involved in initial plans, but argued he was only owed for one model of headphones 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.
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 Music in a $3bn deal in May 2014. The lawsuit was filed four months earlier and does not name Apple as a defendant.
It is not the first lawsuit to hit the Beats brand. In 2014, Bose sued the company for the incorporation of noise-cancelling technology, infringing patents they held. The lawsuit was eventually settled out of court. In 2015, the technology company Monster Inc sued Beats for fraud but the case was dismissed in 2016.