Los Angeles (September 19, 2016) – Litigation Powerhouse Susman Godfrey has secured an important appellate victory for client Steven Lamar and Jibe Audio LLC in a case against Beats Electronics, Dr. Dre and Jimmy Iovine over royalties owed to Lamar from sales of several models of the popular Beats headphones. The Court of Appeal of the State of California, Second District, reversed a lower court ruling that granted a summary judgment in favor of Beats. The court has remanded the case back to the lower court for trial before a jury.
The dispute revolves around contractually owed royalty payments that Beats’ concept creator Steven Lamar claims are owed him and Jibe Audio LLC, over his iconic design of headphones which Susman Godfrey argued was the same design of several related models of Beats headphones. The Superior Court of Los Angeles had previously dismissed the case on summary judgment on the grounds that the 2007 written settlement at issue only required royalty payments on the first headphone model, the ‘Studio model’, as matter of law.
In arguing the appeal, Susman Godfrey associate Davida Brook maintained that there was ambiguity in the 2007 royalty agreement that the parties signed and that Lamar’s claims were meant to cover the headphones’ design, not just a single headphone product. Brooks claimed that the lower court erred by disregarding “credible” documentary evidence backing Lamar’s positions.
“When there’s a conflict in extrinsic evidence, it should go to a jury” Brook asserted. That credible evidence included a Power Point presentation that Lamar presented to Dr. Dre and Beats co-founder Jimmy Iovine back in January 2006. That Power Point presentation included pictures and plans for the first three headphone products Beats went on to make. “The royalty agreement covers every headphone that either embodies or is a “minor or cosmetic modification” of Lamar’s headphone design” Brook argued.
In its ruling, the appellate court agreed with Brook, stating that it found the contract “ambiguous” and that disputes of material facts did exist. The court went on to reverse summary judgement and remand the case for trial.
This win has received significant coverage in both entertainment and legal media. It has been covered by The Wall Street Journal, Billboard magazine, The LA Daily Journal*, and Law360*. In addition, The Los Angeles Recorder profiled associate Davida Brook, highlighting her success leading the case in appellate court as a fourth year associate.
Beats Electronics LLC, Jimmy Iovine and Andre Young are represented by Morrison & Foerster LLP. Robert Brunner and Ammunition LLC is represented by Coblentz Patch Duffy & Bass LLP.
The case is Jibe Audio LLC et al. v. Pentagram Design Inc. et al., number B267633, in the California Court of Appeal for the Second Appellate District.