Audio equipment maker Monster LLC has sued Apple's Beats Electronics over alleged "fraud and deceit" in the way that Beats acquired control of the rights to the "Beats by Dr. Dre" headphones.
Under a partnership formed in 2008, Monster and Beats developed "Beats by Dr. Dre", a line of high-end headphones.
According to the suit filed in San Mateo (Calif.) County Superior Court on Tuesday, Monster engineered the success of the headphones and was unfairly cut out before Beats was sold to Apple last year.
The complaint names Beats co-founders Jimmy Iovine and Dr. Dre as well as HTC America Holdings Inc, among others, as defendants.
The defendants fraudulently acquired Monster's "Beats By Dr. Dre" product line including all development, engineering, manufacturing, marketing, distributing and retail rights, via a "sham" transaction with HTC, according to the complaint.
In 2011, HTC said it would buy a 51 percent stake in Beats for $309 million. Beats bought back half of HTC's interest in the company soon after the transaction, the complaint said.
The complaint alleges the defendants used the change of control as an excuse to end its relationship with Monster in 2012, and that they had made millions off the work of Lee and Monster.
The suit alleges Iovine and Dr. Dre "improperly erased" Monster and Monster's founder Noel Lee from Beats' history.
The complaint seeks general and special damages as well as punitive damages against Beats, HTC and the individuals named.