Noel Lee & Monster--Part Three--How They Created Beats and How They Lost It

201ldn't have 2-06-27-techscapelogocolumn1.jpg

This is the third of a four-part story of Noel Lee, Monster Products and the lawsuit Monster Products filed against Beats headphones for "Fraud and Deceit" among 10 other "causes of action." Part One can be read here and Part Two can be read here. This third part of our story is about the players of this alleged commercial theft and how they have a convincing pattern of operating dishonestly for decades. A look at their backgrounds and lifestyles is very telling.

There's a big jury trial in technology coming up and it begins September 6th in Los Angeles. That's where plaintiffs, Noel Lee and Monster Products will face-off versus Dr. Dre, Jimmy Iovine and Beats Electronics. Apple is also involved after their acquisition of Beats in 2014.

It should be quite a spectacle.

The title of this column is misleading. It says Noel Lee and Monster Products "lost" Beats. I was being nice. I believe Beats was stolen from them.

2015-10-07-1444247644-585360-SOM_Noel_Dre.jpg

And, the media is almost universally aligned against Noel Lee and Monster. The vast preponderance of articles and stories on this big lawsuit are cheer-leading Apple and Beats. I wonder why?

Hmmm ... perhaps it is in some way related to the massive, hundreds of millions of dollars deep ad budget Apple hangs over the head of any publication.

This article represents a small balancing of the accounts and my personal attempt to even the playing field; to show the other, unpublicized, side.

I've never seen this kind of dishonesty or conspiracy in business. After almost 35 years in the business world at large organizations like RCA Corporation and General Electric; medium-sized companies; small, family businesses and finally starting my own firm, I'm appalled. Cheating somebody is a karmic act. If you resort to this, the unseen forces of good will make you pay, eventually.

But in this case, the very much seen forces of a jury will decide whether Apple, Beats, Jimmy Iovine and Dre will pay hundreds of millions or even billions of dollars to Noel Lee and Monster Products.

Or, perhaps they will pay Lee and Monster nothing at all.

If you're a legal eagle, or would just like to see precisely what Monster and Noel Lee are alleging Beats, et. al. did that was actionable, you can read the entire complaint here. I can assure you a better understanding of the situation rests there.

And though Apple is not named in the lawsuit, they might as well be by right of their $3 billion acquisition of Beats; they are effectively in the same boat as the other defendants. It is the behind-the-scenes 'conversation' that Apple was apparently having with Jimmy Iovine for years and the misrepresentation that Noel Lee alleges, that is at the heart of this lawsuit.

Apple is also providing lawyers to Beats as an Apple unit, Iovine and Dre, so that would be a further rationale for their inclusion in the blockbuster lawsuit.

Add to that, the other claims of fraud wherein the Monster plaintiffs say Beats, Jimmy Iovine, Dr. Dre, HTC America and Paul D. Wachter, misrepresented material facts in order to steal away the hundreds of millions of revenue Monster and Lee were making from the very beginnings of Beats and you have a massive conspiracy, if proved in court.

Our story has it all: Fraud, deceit, conspiracy, cheating, lying, naivete, trust betrayed and on the Beats, Dre and Jimmy Iovine side, sex, drugs and rock 'n roll. Oh, and money. Lotsa money. Where else could a reader find such a broad panoply of human transgressions, I ask you?

Lee and Monster had conceived, designed, manufactured and distributed the Beats by Dre headphones from the beginning. The facts seem to support Lee's claim that the 5% of Beats stock Lee asserts was finagled out of him and if proved in court, you have a slam-dunk, metal-plated, bolted-down, massive judgment for Lee and Monster.

Should Lee & Monster be able to prove that the entire company and products they centrally built were stolen away from them through fraud and misrepresentation, an even bigger judgment in the hundreds of millions, or even billions may ensue.

Lee's lawsuit is not the only one pending against Beats, Iovine and Dre. There are a number of other serious-sounding legal actions pending against these two characters. Coincidence? Or a pattern of business fraud and conspiracy? Although I've already decided, I'll let you decide for yourselves.

Apple has been organizationally hammered by their consistent loss of major and even minor lawsuits. They just can't seem to win.

2013's horrendous loss in Federal Appeals court of the E-book collusion and price-fixing case, was yet another Apple legal calamity.

After promising to pay the fine if they lost the case in the last court, Apple quickly started making whiny noises about the Supreme Court hearing the case. Meanwhile back in reality, the Supreme Court declined to hear the Apple E-book appeal in 2016. Note to self: Apple Sr. VP and "ringleader" Eddy Cue was up to his eyeballs in this legal and media disaster.

Regardless, here are just a few of the legal battles Apple can't seem to win in just June of 2015, courtesy of Technology Tell:

"June 2015 saw a number of Apple lawsuits that didn't go their way, but as long as there are judges and lawyers and the ability to file appeals, courtroom battles will continue on.

**Apple lost a trademark lawsuit against Myphone, a Philippines handset company. Apple argued that Myphone sounds "confusingly similar" to iPhone, but the Philippines' Intellectual Property Office said that the "fame and popularity of iPhone in fact makes it improbable for one to confuse my|phone product as an iPhone."

**Shortly after the Apple Watch was introduced, the first patent troll filed a lawsuit over a patent that describes "a method of receiving and transmitting electronic signals, such as text messages or phone calls, on a vibrating device that can be strapped to a user's wrist, and alerting a user to the received electronic signal by vibrating the device."

**It's revealed that at least two Apple Store retail employees complained to Tim Cook about having their bags checked and that Apple managers "are required to treat 'valued' employees as criminals."

**As a result of the lawsuit Monster filed against Apple-owned Beats Electronics in January, Apple has revoked Monster's right to make licensed accessories for Apple devices.

**A123 Systems filed a lawsuit against Apple for allegedly poaching the electric-car battery maker's employees, and it was dismissed after they reached a settlement.

**Apple lost their anti-competitive lawsuit in Taiwan and was fined US $647,120.

**Samsung requested an en banc review, where a case is heard before all the judges of a court, of an earlier ruling that left them with $399 million in damages in their legal battle against Apple.

**Apple wants $15 million from Unwired Planet because they "asserted a menagerie of claims against Apple, presumably in the hope that something would stick and that Apple would tire of spending resources on litigating claims that would inevitably be abandoned."

**Evolved Wireless LLC, a non-practicing entity, filed a patent infringement lawsuit against Apple over "the lack of a license for a series of LTE patents that are part of the LTE standard."

**James Bruno, a former Apple Store manager, is suing Apple over unlawful sexual discrimination and retaliatory discharge after he complained how Apple "reports the dollar value of all sales transactions completed at each store, without adjusting the numbers to account for customer returns."

**Apple will pay $450 million, mostly to consumers, after a federal appeals court denied their challenge to a 2013 ruling finding them guilty of fixing ebook prices. Hopefully, this will bring an end to a long legal battle between Apple and the US Department of Justice."

Have these Apple people no shame?

"In my opinion" is a phrase you will be reading a lot in this final part of my story on Noel Lee and his company Monster. This is because Apple is the most aggressively litigious entity in the world, that will stop at nothing to continue their market dominance in any market they play or any market that draws their avaricious attention. They lie, cheat and steal ... shamelessly. In my opinion, for both of those last two sentences.

But don't just take my word or opinion for the fact that Apple does these things. Take the word of the man revered by Apple-bots and fools with little understanding of technology the world over, Steve Jobs.

"Picasso had a saying, he said, 'Good artists copy. Great artists steal.' And we have always been shameless about stealing great ideas." --Steve Jobs

The late, phony Jobs couldn't have been any clearer than those words about how he operated with impunity his entire career. It's like a business school case study in stealing technology.

Let's get something indelibly straight right now: Steve Jobs never invented anything. He shouldn't be compared to Thomas Edison or Nikola Tesla under any circumstances by sane, rational people. You see, he tells us so right above. Even the "other Steve," Steve Wozniak who was the driving technology force behind Apple, said so recently.

And so Jobs set the culture and future reputation for Apple that so few Apple-bots understand. Over the decades, Apple has misappropriated, nicked, filched, purloined, hijacked, embezzled and shanghaied anything that wasn't nailed down; and a lot that was. It is unsurprising to me and should be to you if you know anything about Apple, that they might be involved in a conspiracy with Jimmy Iovine and thug/drug dealer Dre to poach Beats from Noel Lee and Monster Products.

The litmus test about who's been wronged here and who really invented and built Beats is the fact that Jimmy Iovine and Dre were originally only receiving royalties for their feather-light participation in these headphones which were selling like hotcakes.

They had to find a way to grab the company by excluding Noel Lee completely, manipulating even his paltry 5% Beats stock (estimated post-Apple acquisition value: northward of $150 million) from him by allegedly lying to him and taking it all for themselves.

To me, the 'smoking gun' here took place when Noel Lee first met with Jimmy Iovine and Dr. Dre at the Interscope Records offices in Santa Monica. The two were interested in making speakers, they called "Beats by Dre."

Speakers NOT headphones.

When Noel Lee heard this he thought it was a terribly bad idea because he knew that home audio systems were on the wane and smartphones playing people's music were going to take over.

Countering with a legendary entrepreneurial suggestion, Lee said, "Don't make speakers! Make headphones! They're speakers for the ears."

From that point forward, Beats by Dre were headphones. Because of Noel Lee.

Factor in that Lee and Monster did everything else to design, make and distribute the Beats by Dre headphones and then end up with nothing from the multi-billion dollar acquisition by Apple of Beats, convinces me who was defrauded and cheated here.

Another grubby Apple business strategy is to use the press to whitewash the real history behind any innovation. Beats had to whitewash--perhaps with Apple's experienced help--Noel Lee and Monster.

When Jimmy Iovine is quoted widely in the news media that he "spent more than two years developing the Beats headphones," he must be talking about taking the occasional call from Noel Lee and while Iovine rested in his easy chair. He contributed zilch to the product development, design or distribution of Beats. Noel Lee's central and most important role in developing Iovine's and Dre's only product cannot be whitewashed out of history.

Lee has the pictures to prove it.

2015-09-24-1443133191-7211825-03BeatsNYWireless10112011105506AM2.jpg

2015-09-24-1443133248-7311302-BeatsNYWireless10112011125423PM800x447.jpg

2015-09-24-1443133302-694234-AmericanIdol3232012123715PM323201221308PM2.jpg

2015-09-24-1443133352-6508945-CES08_BestBest_DrDre_TH004637x460.jpg
From CES 2008 when Beats launched, notice Lee and the Monster branding omnipresent ... Dr. Dre striding onstage to greet Lee

2015-09-24-1443133597-2932291-BeatsRedSox1.jpg
Noel Lee, LeBron James, Jimmy Iovine and Dr. Dre

As most legal actions are, this is complicated. Simultaneously, it's simple ... cut and dried.

Let us investigate all the players in the civil legal action, Monster LLC & Noel Lee, plaintiffs versus defendants, Beats Electronics, Andre Young (aka Dr. Dre), Jimmy Iovine, Paul D. Wachter and HTC America.

The easiest by far is an easy profile of Andre Young aka Dr. Dre ... there's so much out there on this creature. This degenerate miscreant is a convicted criminal, woman-beater, drug dealer and gang-member. And those nauseating accomplishments are dwarfed by this negative role model's real achievement: callously and greedily corrupting the morals of a couple of generations of our children.

Instead of looking up to Kobe Bryant or Lebron, who a disadvantaged, black kid might conceivably emulate, the contemptible, pusillanimous Dre positioned himself and Niggaz Wit Attitudes (N.W.A.) as somebody children might look up to through his absurd "music."

Instead of trying to mimic somebody who could do something positive with their bodies like slam-dunk or rush for 1,000 yards, Dre's murderous antics pied-pipered millions of mostly uneducated, future-less children into lives of crime, drugs, pimping, prison and God knows what else. The tragedy of this reprobate rascal has had an incalculably bad effect on society.

Right from the start, these ghetto scoundrels informed the world of their intentions with the song from their first album, "Fuck Tha Police." (This, and all uneducated vulgarity that follows is Dre's language, not mine.) What more do decent people need to know?

Let's take a quick look at just a few of Dre's lyrics from "The Chronic," his first album which made him an estimated $30 million and brought him fame, whilst destroying generations of young people. Talk about selling your soul.

2015-08-15-1439660987-7823502-DrDre1.jpg
2015-08-15-1439661169-8866255-Parentaladvisory.png

"So if you wanna take a trip to the Row
Let a nigga like Snoop Doggy Doggy know
Protected by niggaz with big dicks, AK's and 187 skills
So if you must test us
We can handle it with the streets nigga, fuck makin records"

"Nigga bow down to the Row
Fuckin' me, now I'm fuckin' you little hoe
Oh, don't think I forgot, let it slide
Let me ride, just another homicide"

"Yeah, that's what the fuck I'm talkin about
We have your motherfuckin record company surrounded
Put down the candy and let the little boy go
You knowwhatI'msayin, punk motherfucker"

"That if you fuck wit Drenigga you're fuckin with Death Row
And I ain't even slangin them thangs
I'm hollin' one-eight-seven with my dick in yo mouth, beeyatch"

"Yeah nigga, Compton and Long Beach together on this motherfucker
So you wanna pop that shit get yo motherfuckin cranium cracked nigga
Step on up. Now, we ain't no motherfuckin joke so remember the name
Mighty, mighty D-R. Yeahhh, MOTHERFUCKER!"

"If it ain't another ho thats I got ta fuck wit
Gap teeth in yo mouth so my dick's gots ta fit
With my nuts on ya tonsils
While ya on stage rappin at your wack-ass concerts"

"All these sucka ass niggaz can eat a fat dick
Yeah, Eazy-E, Eazy-E, Eazy-E can eat a big fat dick
Tim Dog can eat a big fat dick
Luke, can eat a big fat dick"

These lyrics are only FROM ONE early Dr. Dre song. Now, we all curse occasionally, perhaps when we stub our toe or more often ... but what kind of anti-social, stupid, psycho writes lyrics like these?

Give me Taylor Swift any day.

The effect of this animal infecting society with these horrendous words and ideas is certainly part of what's wrong with the world. Eliminate people like this and we'll have a much safer, cleaner and happier place to live.

The Washington Post has said members of N.W.A. display "a psychotic, brutal and obsessive fixation on beating, raping and killing groupies and prostitutes ... verbally reducing women to a subhuman level." NWA has many psychopathic titles which should suggest lifetime incarceration with larger examples of their moronic kind including, "To Kill a Hooker," "Findum, Fuckum & Flee" and "One Less Bitch"

What part of the "Parental Advisory" above, the name N.W.A. (Niggaz wit Attitudes) and the album being on "his own Death Row Records" could parents possibly miss? Not only did they not steer their young offspring away from this kind of mind-destroying crap, but instead actually gave them money to buy it. Is it their fault instead of Dre's? Were they so easily conned? Nope. I still blame Dre. "We ain't doing this shit to send out no messages," the waste-of-space Dre told a reporter in 1991, "We in this shit to get paid."

Dee Barnes was a female host on an LA hip-hop TV show and knows the chump Dre better than most. Her experience with him came at an LA party in 1991. According to a Rolling Stone article, "N.W.A. Beating Up the Charts":

"He picked her up by her hair and 'began slamming her head and the right side of her body repeatedly against a brick wall near the stairway' as his bodyguard held off the crowd with a gun. After Dre tried to throw her down the stairs and failed, he began kicking her in the ribs and hands. She escaped and ran into the women's rest room. Dre followed her and 'grabbed her from behind by the hair again and proceeded to punch her in the back of the head.'"

Barnes filed a $22.75 million civil suit and criminal assault charges against lethal misogynist Dre, who was rewarded with a $2,500 fine, two years of probation and 240 hours of community service. The lawsuit was "settled," however one has to wonder if Dre's criminal, gangland associates stepped in the grease the skids for that settlement through threats.

Underneath Dre's 'tough guy' image contradicts what is really a weak, cowardly, piss-ant of a man who would prefer to deceive children and beat up women rather than respect them.

Closer to home, Dre reportedly broke the ribs and nose of Michel'le, his onetime backup singer and wife. This lady apparently had little mental acuity as she later married Dre post-abuse and if that wasn't dumb enough, later married bat-wielding, allegedly murderous and unrepentant repeated felon/mobster, Suge Knight, founder of morally and financially bankrupt, Death Row Records. Poor, clueless woman.

And while Apple now has awarded Dre with a billion dollars and a corner office in close proximity to CEO Tim Cook, they've also begun an extended 'apology tour' for Dre's beatings of women.

In the NY Times' August 21st 2015 article entitled, "Dr. Dre Apologizes to the 'Women I've Hurt,'" Dre quickly becomes a remorseful mess. "Twenty-five years ago I was a young man drinking too much and in over my head with no real structure in my life. However, none of this is an excuse for what I did. I've been married for 19 years and every day I'm working to be a better man for my family, seeking guidance along the way. I'm doing everything I can so I never resemble that man again. I apologize to the women I've hurt. I deeply regret what I did and know that it has forever impacted all of our lives." Sure, when a billion dollars is involved, Dre becomes a decent human being but before this windfall, he was a degenerate criminal-coward, in my opinion.

Apple, disingenuously chimed in reassuringly in the same article, "Dre has apologized for the mistakes he's made in the past and he's said that he's not the same person that he was 25 years ago. After working with him for a year and a half, we have every reason to believe that he has changed." Protecting your revenue source Apple? Avoiding a shareholder revolt resulting in Tim Cook's firing?

Contrasting Apple, Dre & Company's soft words of sorrow with what hip-hop legend/woman-beater Dre said many years ago, "People talk all this shit, but you know, somebody fucks with me, I'm gonna fuck with them. I just did it, you know. Ain't nothing you can do now by talking about it. Besides, it ain't no big thing - I just threw her through a door." That's the real Dre.

I always tell my daughter, "Show me your friends and I'll show you your future." Well, to look at Dre's collection of friends is to enter the "bizarro world" of the dangerous, dumb and almost comically illiterate thugs and depraved perverts. Tupac Shakur, the idiotically-named Biggie Smalls, Eazy-E (AIDS) and many of the others are mercifully dead. Knight should be going away to the seventh circle of Hell for the rest of his debased life shortly. But anti-civilized society hoods, Snoop Dogg, Ice Cube and their crews appear to be reformed and settling on just being general pains-in-the-neck.

Nope, the world and America in general would be vastly improved if Dr. Dre disappeared down the sewer of imprisonment or death and left the rest of us decent, hardworking people alone.

This incredibly negative street hood is the first player in the alleged conspiracy to steal a $3.2 billion corporation away from the rightful owners, Noel Lee and Monster.

Jimmy Iovine
This little man suffers from both a Napoleonic and pseudo-Machiavelli complex at the same time. I've never heard of this duality of madness before, much less seen it in real life.

His short stature is legendary; he called "tiny" by anybody who's seen him in person. Hence the Napoleonic condition.

Machiavelli said, "it is far safer to be feared than loved." Iovine embodies this philosophy. I couldn't find one person who knew him or had worked with him to admit they liked Jimmy Iovine. To me, he's a pariah; an untouchable.

And it's easy to see why people shun him, especially if he does the kinds of things to others that he did to Noel Lee and Monster Products.

But I digress. Iovine grew up the son of an Italian longshoreman in Brooklyn, NY. I can't imagine it was easy for little Jimmy. He was probably brutally bullied and totally unable to stand up for himself. I'm sure he learned the sneaky art of politics in the classroom and then in the greater world in order to survive. For the diminutive members of such a community, sometimes the only way to pull through is a shiv in the back for your enemies.

Getting his first job as a cleaner in a recording studio, Iovine rose quickly--I wonder how-- and after a few years cleaning toilets, became a studio engineer.

His story from then on in is a classic success story. He started working with John Lennon and Bruce Springsteen. U2, Tom Petty, Stevie Nicks, Dire Straits, The Pretenders, Lady Gaga and many more followed over the years. It is estimated that Iovine had produced more than 250 albums. Eminem is considered one of Iovine's gifts to the world.

He got into movie soundtracks and documentaries, expanding his influence and power substantially. In 1999, Iovine got into bed with David Geffen, when Iovine's Interscope Records merged with Geffen's record company, creating Interscope Geffen A&M.

Funny thing is though, I couldn't get anybody in the music business to go on the record as genuinely liking Iovine. Many people refused to comment ... and that's a sure sign of not wanting to say anything bad about a powerful man who could hurt you, your family and income. One Rock star icon told me, "Iovine? He's a filthy, filthy man," with such great emphasis that I could only wonder what Iovine had done to this kind soul.

Somewhere and somehow, Iovine became a leading proponent of Rap, and not just any kind of harmless Rap, but full-on Gangsta Rap or Murder Rap.

Looking for a pattern of Iovine ripping off business partners and associates in the past, I quickly came across several other major lawsuits filed against Iovine, Dre and Beats. One case, has strikingly similar circumstances to what Noel Lee reports; while the other seems eerily similar too. Iovine's modus operandi has all the appearances of an organized crime syndicate, to me and in my opinion.

Paul D. Wachter
Paul Wachter is a heavy-hitter representing Lebron James, Arnold Schwarzenegger, Bono, Tom Werner and of course, Jimmy Iovine. It is in perhaps this capacity that the Ivy League-educated lawyer and Wharton graduate came into contact with Noel Lee.

He negotiated the sale of the Boston Red Sox to John Henry and client Werner; the lifelong endorsement deal of Lebron with Nike; as well as Lebron's minority interest in the Liverpool Football Club and discussions with Warren Buffett.

Wachter sits on the Board of Directors of Time-Warner, Virgin America and Beats Electronics.

It was while negotiating the sale of Beats to Apple, that Noel Lee alleges Wachter told him there were no liquidity events occurring with Beats "for years" and that therefore Lee should just give up his 5% stock back to Beats instead of paying millions to retain it. It is alleged that Wachter knew the Apple deal was coming shortly thereafter and was tasked with convincing Lee to give up his 5% stock in Beats.

HTC America
The US subsidiary of giant HTC, maker of phones and other technology. Named in the lawsuit because they are accused of conspiring to defraud Lee and Monster by acting as a 'parking spot' for a majority interest of Beats's stock which then triggered a "change of ownership" clause in the original agreement thus eliminating Monster's central role in the design, development, manufacturing, marketing and distribution of Beats' products. It was this one stock activity that set in motion the entire case and alleged fraud Monster claims.

Eddy Cue, Apple SVP Internet Software and Services
Since 1989, Cue has been an Apple employee. As a lifelong Appler, he must have the best lay of the land and political positioning inside Apple. Cue is the mover and shaker that put together the first Apple online store; App Store, iTunes, Siri, Maps, iAd, iCloud and most importantly for this legal case, Apple Music.

You see, it is now known that Apple didn't really want the maturing headphone/earbud/speaker business of Beats. They wanted the Beats Music Service; that was the real crown jewel Jobs had discussed with Iovine and later, Cook had 'imagineered' with Iovine.

Now Cue has also had some major screw-ups such as Apple TV and the aforementioned E-book collusion $450 million judgement against Apple.

Tim Cook, CEO, Apple
Apple's replacement CEO for Steve Jobs. Not at all similar or satisfactory to shareholders, employees or customers. Where Jobs was strong; Cook is weak. Where Jobs pushed staff; Cook leaves them alone. Where Jobs was feared; Cook is joked about and ignored.

When I was told Monster planned to depose Tim Cook in this case, I thought, "No way Apple will allow that to happen." Last Friday, Cook was deposed by Monster attorneys. Advantage: Monster.

Also involved but not named in the suit is The Carlyle Group as they quickly bought back half of HTC's stake and roughly doubled their reported $500 million investment in Beats with unbelievable speed to $930 million. Hmmm ... nice multiple for a short-term investment. Perhaps they had insider information?

And though Noel Lee invented the Beats headphones by demanding that Iovine and Dre make headphones instead of speakers, and then supplied everything from soup-to-nuts in terms of design, global sourcing, manufacturing and distributing the headphones, Lee and Monster products received zero dollars from the Beats acquisition by Apple. Here's the breakdown and beneficiary list of the hijackers:

2015-09-23-1442966512-3660869-PrivcoBeatsAppleanalysis1024x551.png

So that is the list of characters and participants in Monster LLC vs. Beats Electronics et. al.

Having tried to bury Lee and Monster with a "blizzard of motions," the Beats/Apple legal team is now in their bunker mentality facing the inevitable coming of a jury trial in Los Angeles beginning next month.

This is gonna be interesting.