theJasmineBRAND.com theJasmineBRAND.com theJasmineBRAND.com 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT STEPHEN E. MORRISSEY(187865) [email protected]SUSMAN GODFREY L.L.P. 1201 Third Avenue, Suite 3800 Seattle, Washington 98101 Telephone: (206) 373-7380 Facsimile: (206) 516-3883 BRIAN MELTON (Pro Hac Vice Application Pending) [email protected]SUSMAN GODFREY L.L.P. 1000 Louisiana St., Suite 5100 Houston, Texas 77002 Telephone: (713) 651-9366 Facsimile: (713) 654-6666 Attorneys for Defendants Steven Lamar and ROAM, Inc. (Additional Counsel for Defendants Listed on Signature Page) UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA BEATS ELECTRONICS, LLC, Plaintiff, v. STEVEN LAMAR; ROAM, LLC; ROAM, INC; and DOES 1-10, inclusive, Defendants. Case No. 2:14-cv-07537-FMO(MRWx) Hon. Fernando M. Olguin MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF DEFENDANTS’ MOTION TO DISMISS PLAINTIFF’S COMPLAINT PURSUANT TO RULE 12(B)(6) Date: January 29, 2015 Time: 10:00 a.m. Place: Courtroom 22 Case 2:14-cv-07537-FMO-MRW Document 11-1 Filed 11/21/14 Page 1 of 15 Page ID #:141 theJasmineBRAND.com theJasmineBRAND.com theJasmineBRAND.com
Transcript
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT
Attorneys for Defendants Steven Lamar and ROAM, Inc. (Additional Counsel for Defendants Listed on Signature Page)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
BEATS ELECTRONICS, LLC, Plaintiff, v. STEVEN LAMAR; ROAM, LLC; ROAM, INC; and DOES 1-10, inclusive,
Defendants.
Case No. 2:14-cv-07537-FMO(MRWx)
Hon. Fernando M. Olguin
MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF DEFENDANTS’ MOTION TO DISMISS PLAINTIFF’S COMPLAINT PURSUANT TO RULE 12(B)(6) Date: January 29, 2015 Time: 10:00 a.m. Place: Courtroom 22
Case 2:14-cv-07537-FMO-MRW Document 11-1 Filed 11/21/14 Page 1 of 15 Page ID #:141
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT
TABLE OF CONTENTS
I. INTRODUCTION ............................................................................................ 3
II. BACKGROUND .............................................................................................. 3
III. LEGAL STANDARD ...................................................................................... 5
IV. ARGUMENT ................................................................................................... 6
A. Beats’ Complaint Fails to State a Claim for Relief That Is
Plausible on Its Face Because It Is Neither False Nor Misleading
for Mr. Lamar to be Described as a “Co-Founder of Beats by Dr.
Cal. Bus. & Prof. Code § 17200 .............................................................................. 5
Cal. Bus. & Prof. Code § 17500 .............................................................................. 5
Cal. Civ. Proc. Code § 426.10 ............................................................................... 10
Cal. Civ. Proc. Code § 426.30 ......................................................................... 10, 13
RULES
Fed. R. Civ. P. 12(b)(6) ....................................................................................... 3, 5
Fed. R. Civ. P. 13(a) .............................................................................................. 10
Fed. R. Evid. 201 ................................................................................................. 4, 8
Case 2:14-cv-07537-FMO-MRW Document 11-1 Filed 11/21/14 Page 3 of 15 Page ID #:143
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3
MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT
Defendants Steven Lamar and ROAM, Inc. respectfully submit the following
memorandum of points and authorities in support of his motion to dismiss Plaintiff
Beats Electronics, LLC’s Complaint pursuant to Rule 12(b)(6) of the Federal Rules
of Civil Procedure.
I. INTRODUCTION
In May 2014, Defendant Steven Lamar filed suit against Plaintiff Beats
Electronics, LLC (“Beats”) in Los Angeles County Superior Court alleging that,
among other things, Beats had breached Mr. Lamar’s contractual right to receive
royalty payments for his role in developing the iconic “Beats by Dr. Dre”
headphones. Four months later, Beats filed the present suit against Mr. Lamar,
alleging that he is engaged in false advertising and unfair competition by referring
to himself as a “co-Founder of Beats by Dr. Dre.” Beats’ Complaint should be
dismissed for two alternative reasons. First, Beats’ claims are contradicted by
undisputed facts regarding the parties’ collaboration in developing the “Beats by
Dr. Dre” brand, and its Complaint therefore fails to state a claim upon which relief
can be granted. Second, to prove their respective claims before the state court and
this Court, the parties will rely on much of the same evidence, many of the same
witnesses, and present many of the same facts. Their cases are inextricably
intertwined and therefore should proceed in one court, the state court, which
assumed jurisdiction over the matter months before this Court, and which can—and
indeed must—hear Beats’ claims as compulsory cross-claims to those brought by
Mr. Lamar. Under either theory, this Court should dismiss Beats’ Complaint with
prejudice.
II. BACKGROUND
In early 2006, Steven Lamar, James “Jimmy” Iovine, and Andre Young p/k/a
“Dr. Dre” agreed to collaborate on the design, production, and sale of a new
headphone product line to be marketed and sold as “Beats by Dr. Dre.” (Dkt. No. 1
Case 2:14-cv-07537-FMO-MRW Document 11-1 Filed 11/21/14 Page 4 of 15 Page ID #:144
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4
MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT
[“Compl.”] ¶¶ 16–17; RJN Exh. A [“Cross-Compl.”] ¶¶ 13–15.)1 As part of that
collaboration, Mr. Lamar engaged a design firm to assist in developing the design
and corporate identity of the new line of headphones. (Cross-Compl. ¶ 15.) He
additionally found a manufacturing partner to engineer and manufacture prototypes
of the Beats headphones. (Id. ¶ 17.) By May 2006, the project was developing
such that Mr. Iovine began introducing Mr. Lamar to potential distribution partners,
including Apple, Inc. and Monster Cable Products, LLC, to secure their partnership
in selling Beats branded headphones to the general public. (Id. ¶¶ 20–22.)
Unfortunately, by July 2006, the partnership between Messrs. Lamar, Iovine,
and Young had deteriorated to the point where Messrs. Iovine and Young sued Mr.
Lamar, among others, for allegedly breaching their oral agreement concerning the
manufacture, marketing, and distribution of Beats branded headphones. (Compl. ¶¶
18; Cross-Compl. ¶ 23.) The parties settled the dispute out-of-court the next year.
(Compl. ¶ 18; Cross-Compl. ¶ 24.) As a result of the settlement, Mr. Lamar and the
other defendants in the case agreed to relinquish their rights, title, and interest in the
headphone design and the trademark “Beats by Dr. Dre.” (Compl. ¶ 18.) In return,
the parties executed royalty agreements whereby Mr. Lamar and the other
defendants would receive a royalty on all “Covered Headphones” subject to
specified limitations identified in the agreements. (Cross-Compl. ¶¶ 29–30.)
When the Beats Studio headphones—the first Beats branded headphones to
be released—were released in 2008, Mr. Lamar began receiving royalty payments
under the settlement and royalty agreements. However, when subsequent iterations
1 Pursuant to Federal Rule of Evidence 201, a court may take judicial notice of
“matters of public record” without converting a 12(b)(6) motion to dismiss into a motion for summary judgment. See Lee v. City of Los Angeles, 250 F.3d 668, 688–89 (9th Cir. 2001) (citing Fed. R. Evid. 201). The cross-complaint filed by Mr. Lamar in Los Angeles County Superior Court is a matter of public record, and may be judicially noticed by this Court. See Dawson v. Mahoney, 451 F.3d 550, 551 n.1 (9th Cir. 2006) (citing Fed. R. Evid. 201(b), (c)) (taking judicial notice of a state court’s orders and proceedings). The state court pleading is cited here to provide necessary factual context to the nature of the claims raised here by Beats.
Case 2:14-cv-07537-FMO-MRW Document 11-1 Filed 11/21/14 Page 5 of 15 Page ID #:145
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
5
MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT
of the headphones were released, Mr. Lamar did not receive royalty payments on
them. (Cross-Compl. ¶ 33.) The royalty payments stopped altogether by the end of
2013. (Cross-Compl. ¶ 37.) As a result, in January 2014, Mr. Lamar made a
demand for payment of his owed royalties under the agreement, and ultimately, was
forced to file a cross-complaint against Messrs. Iovine, Young, and Beats, among
others, to protect his rights.2 In his state court claim, Mr. Lamar alleges, in part,
that these actions constituted a breach of the settlement and royalty agreements by
Messrs. Iovine and Young, and by Beats, which is believed to have succeeded-in-
interest to some or all of Messrs. Iovine and Young’s rights and obligations under
the contracts. (Cross-Compl. ¶ 44–50.)
Six months after Mr. Lamar filed his cross-complaint in state court, Beats
filed the present action. Beats alleges that in advertising his new headphones
venture, Mr. Lamar violated the Lanham Act, 15 U.S.C. § 1125(a), California’s
False Advertising Law, Cal. Bus. & Prof. Code § 17500et seq., and California’s
Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200, et seq., by describing
himself as a “co-Founder of Beats by Dre” on his new venture’s web site. (Compl.
¶¶ 23.) Meanwhile, the claims in the state court, related to the royalties owed to
Mr. Lamar for his role in creating the “Beats by Dr. Dre” brand of headphones,
remains pending.
III. LEGAL STANDARD
Federal Rule of Civil Procedure 12(b)(6) requires that a plaintiff’s complaint
must be dismissed when the allegations contained within it fail to state a claim upon
which relief can be granted. In order to survive a 12(b)(6) motion to dismiss, a
complaint must state a claim for relief that is plausible on its face. Ashcroft v.
2 Mr. Lamar’s claims were filed as cross-claims because after he made the demand
for payment of his owed royalties, Hinrichs & Associates and Pentagram Design, Inc., the entities from whom he was to directly receive royalty payments under the royalty agreement, filed a declaratory judgment action in state court to determine its obligations.
Case 2:14-cv-07537-FMO-MRW Document 11-1 Filed 11/21/14 Page 6 of 15 Page ID #:146
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
6
MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT
Iqbal, 556 U.S. 662 (2009). In evaluating whether that standard has been met, the
court must accept as true all material allegations of the complaint, as well as all
reasonable inferences to be drawn therefrom. See Pareto v. F.D.I.C., 139 F.3d 696,
699 (9th Cir. 1998). It should additionally construe the complaint in the light most
favorable to the nonmoving party. See Sprewell v. Golden State Warriors, 266 F.3d
979, 988 (9th Cir. 2001). However, the court need not accept as true allegations
that contradict matters that are properly subject to judicial notice. See id. (citing
Mullis v. United States Bankr. Court, 828 F.2d 1385, 1388 (9th Cir. 1987)).
Moreover, the court is not required to accept as true allegations that are merely
conclusory, unwarranted deductions of fact, or unreasonable inferences. See id.
(noting that on a motion to dismiss, a court is not required to accept as true
allegations that contradict matters that are properly subject to judicial notice, nor
allegations that are merely conclusory, unwarranted deductions of fact, or
unreasonable inferences).
It cannot reasonably be disputed that Mr. Lamar played an early role in
founding the Beats brand. Beats’ false advertising and unfair competition claims
originate from a 2006 business relationship between Messrs. Iovine, Young, and
Lamar. (See Compl. ¶¶ 17–18.) While Beats’ Complaint is vague about the nature
of that relationship beyond that it ultimately deteriorated to the point of an out-of-
court settlement in which Messrs. Iovine and Young were assigned exclusive rights
in the trademark “Beats by Dr. Dre,” the demurrer Beats filed to Mr. Lamar’s cross-
claims in state court is not:
In early 2006, Iovine, Dre, Pentagram Design, Inc. (“Pentagram”), and
Lamar participated in the design of certain audio headphones to be
marketed under the “Beats by Dre” brand. The working relationship
of the parties deteriorated, resulting in a 2006 lawsuit filed in Los
Case 2:14-cv-07537-FMO-MRW Document 11-1 Filed 11/21/14 Page 8 of 15 Page ID #:148
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
8
MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT
Angeles Superior Court by Iovine and Dre against Lamar . . . alleging
breach of contract, unjust enrichment, and unfair competition . . . .
(RJN Exh. B [“Demurrer”] at 2.)3 The demurrer continues:
The parties ultimately reached an out-of-court settlement, and under
the terms of a global settlement of the 2006 lawsuit, the Lamar Parties
and Pentagram agreed to assign to Iovine and Dre their rights in the
headphone depicted in Schedule I of a contemporaneously executed
royalty agreement between Iovine, Dre, and Pentagram. The
headphone that was the subject of the 2006 lawsuit and that was
depicted in Schedule I of the royalty agreement was later released
under the product name “Studio” and under the trademark “Beats by
Dre.”
(Demurrer at 2–3.) The settlement agreement to the 2006 lawsuit between Messrs.
Iovine, Young, and Lamar, among others, similarly acknowledges Mr. Lamar’s role
in the founding of the Beats brand. (See RJN Exh. C [“2006 Global Settlement
Agreement”] at 1 (“Lamar . . . [Iovine] and/or [Young] designed certain
headphones . . . to be marketed and sold under certain names and trademarks
including, but not limited to, “Beats by Dr. Dre.”).) Indeed, that settlement
included a contemporaneously executed royalty agreement under which Mr. Lamar
received royalties for his role in designing and developing the Beats brand.4 (See
Cross-Compl. Exhs. 1, 3.)
3 Like Mr. Lamar’s state court cross-complaint, the demurrer filed by Beats in state
court is a matter of public record and may be subject to judicial by this court pursuant to Federal Rule of Evidence 201. 4 As discussed below, that settlement agreement is at the center of Mr. Lamar’s
claim in state court that Beats breached its contractual obligation to him by failing to pay royalties for models of Beats headphones released after the original “Studio” headphone, including the “Solo, Pro, Wireless, Mixr, ‘remastered’ Studio, and Studio Wireless headphones, all of which were based on the original Beats headphones prototypes” Mr. Lamar helped develop in 2006. (See Cross-Compl. ¶ 28.)
Case 2:14-cv-07537-FMO-MRW Document 11-1 Filed 11/21/14 Page 9 of 15 Page ID #:149
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
9
MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT
In light of this relationship between the parties, it is wholly implausible for
Beats to now contend that Mr. Lamar was not a co-Founder of its brand image and
headphones line, or that consumers are being deceived by Mr. Lamar’s accurate
statement of his role in the founding of the Beats business in 2006. There is simply
no set of facts that can allow Beats to plead a claim that Mr. Lamar is engaging in
false advertising regarding his uncontested role in the early development of the
Beats brand and headphone line.5 The Complaint should therefore be dismissed
with prejudice.
B. Beats’ Complaint Should be Dismissed Because It Should
Have Been Filed as a Compulsory Cross-Claim to Mr.
Lamar’s State Court Action
“Federal courts will not permit an action to be maintained where the claims
asserted should have been brought as a compulsory counterclaim in an earlier
action.” In re Crown Vantage, Inc., 421 F.3d 963, 973 n.7 (9th Cir. 2005) (citing
Cheiker v. Prudential Ins. Co., 820 F.2d 334 (9th Cir. 1987)). The rule is true
whether the earlier action was brought in federal court or state court. See Cheiker,
820 F.2d at 336. In either instance, the goal is the same—minimize the wasteful
duplication of effort by multiple courts being asked to rule on related issues. See id.
Where the initial action was filed in state court—as here—federal courts
should apply state law to determine if the claims before them should have been
filed as counterclaims in the state court action. See Pochiro v. Prudential Ins. Co.
of America, 827 F.2d 1246, 1249 (9th Cir. 1986) (applying Arizona state law).
5 As noted above, because Beats’ other causes of action—for unfair competition
under the Lanham Act, and for false advertising and unfair competition under California law—are similarly premised on the alleged falsity or misleading nature of Mr. Lamar’s description as a “co-Founder of Beats by Dre,” they too fail to state a claim upon which relief can be granted. See Cleary v. News Corp., 30 F.3d 1255, 1262–63 (9th Cir. 1994) (noting that the Ninth Circuit “has consistently held that state common law claims of unfair competition and actions pursuant to California Business and Professions Code § 17200 are ‘substantially congruent’ to claims made under the Lanham Act.”).
Case 2:14-cv-07537-FMO-MRW Document 11-1 Filed 11/21/14 Page 10 of 15 Page ID #:150
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
10
MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT
Under California law, “if a party against whom a complaint has been filed and
served fails to allege in a cross-complaint any related cause of action which (at the
time of serving his answer to the complaint) he has against the plaintiff, such party
may not thereafter in any other action assert against the plaintiff the related cause of
action not pleaded.”6 Cal. Civ. Proc. Code § 426.30. The statute requires courts to
analyze two questions: (1) whether the current claims are related to those asserted
in the prior suit, and (2) if so, whether the current claims are nonetheless
maintainable because they were not in existence at the time the state court
defendant served its answer to the cross-complaint. See Align Tech., Inc. v. Bao
Tran, 179 Cal. App. 4th 949, 960 (2009).
1. Beats’ federal claims are logically related to Mr. Lamar’s
state court claims
California law defines a “related cause of action” as any “cause of action
which arises out of the same transaction, occurrence, or series of transactions or
occurrences as the cause of action which the plaintiff alleges in his complaint.”
Cal. Civ. Proc. Code § 426.10. Applying the definition, California courts have
looked to federal cases construing the compulsory counterclaim requirement
outlined in Federal Rule of Civil Procedure 13(a) for guidance, and have followed
federal courts in adopting the “logical relationship” test as their benchmark for what
constitutes a related cause of action. See Currie Med. Specialties, Inc. v. Bowen,
136 Cal. App. 3d 774, 777 (1982) (citing United Artists Corp. v. Masterpiece
Prods., 221 F.2d 213 (2d Cir. 1955)); see also Align Tech, Inc., 179 Cal. App. 4th
at 959. That test requires that for two claims to be related, there need not be “an
absolute identity of factual backgrounds for the two claims, but only a logical
6 California has abolished use of the term “counterclaims,” and instead refers to all
former counterclaims as cross-claims. Cal. Civ. Proc. Code § 426.10(c). The terms are used interchangeably here, depending on the context, state or federal, in which they arose.
Case 2:14-cv-07537-FMO-MRW Document 11-1 Filed 11/21/14 Page 11 of 15 Page ID #:151
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
11
MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT
relationship between them.” Currie Med. Specialties, Inc., 136 Cal. App. 3d at 777
(“At the heart of the approach is the question of duplication of time and effort; i.e.,
are any factual or legal issues relevant to both claims?”); see also Pochiro, 827 F.2d
at 1249 (describing the parallel “logical relationship” test under Federal Rule of
Procedure 13(a) as asking “whether the essential facts of the various claims are so
logically connected that considerations of judicial economy and fairness dictate that
all the issues be resolved in one lawsuit.”).
As with federal law, California’s rule is guided by the simple principle that
“[t]he law abhors a multiplicity of actions.” Align Tech., Inc., 179 Cal. App. 4th at
959. As such, to effectuate its purpose, “numerous cases have held that the
compulsory cross-complaint statute . . . must be liberally construed.” Id. (citing
cases). Indeed, the reach of the “logical relationship” test that emanates from it has
been described as “expansive.” See Currie Med. Specialties, Inc., 136 Cal. App. 3d
at 777.
Applying that test here, it is clear that Beats’ claims before this Court are
logically related to those presented by Mr. Lamar to the state court. Beats’ claims
before this Court necessarily rest on the position that despite Mr. Lamar’s early role
in the development of the “Beats by Dr. Dre” brand and headphone line, he cannot
be considered a “co-Founder of Beats by Dre.” As described above, Beats’
demurrer in the state court, as well as the settlement agreement between the parties
and the context from which it arose, all contradict that position. (See, e.g.,
Demurrer at 2–3 (“In early 2006, Iovine, Dre, Pentagram Design, Inc.
(“Pentagram”), and Lamar participated in the design of certain audio headphones to
be marketed under the “Beats by Dre” brand.”)). Additionally, they present Mr.
Lamar’s first defense to Beats’ false advertising and unfair competition claims
here—that he cannot be held liable for describing himself as a “co-Founder of
Case 2:14-cv-07537-FMO-MRW Document 11-1 Filed 11/21/14 Page 12 of 15 Page ID #:152
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
12
MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT
Beats” because he was, in fact, a co-founder of the headphone brand.7 See
(describing that the first element of a Lanham Act claim for false advertising is that
the defendant made a false statement of fact). Indeed, Mr. Lamar could not have
been sued by Messrs. Iovine and Young for the alleged breach of an oral contract
related to the development of the Beats by Dre headphones line, and could not have
entered into a settlement of that case, if that were not true.
Importantly, that same factual context and that same settlement agreement
are vital to Mr. Lamar’s claims in the state court. (See Cross-Compl. ¶¶ 13–25.) In
state court, Mr. Lamar is arguing that when he collaborated with Messrs. Iovine and
Young on the concept and design for Beats branded headphones, the parties
envisioned a broad business model that included a wide range of headphone
products sold in a “variety of sizes, shapes, and colors and/or with a variety of
features, all of which were based on the iconic product design and brand identity in
the original Beats Headphones prototypes.” (Cross-Compl. ¶ 16.) At issue is
whether the settlement agreement in which Beats acquired its rights in the “Beats
by Dre” mark reflects such a vision. To prove his position that it does, Mr. Lamar
will necessarily rely on evidence relating to his early role in the development of the
Beats concept and bread. As noted above, that same evidence will be presented by
Mr. Lamar in defense of Beats’ allegations of false advertising and unfair
competition.
The factual and evidentiary overlap between the state and federal court cases
is dispositive. While there is not, of course, a complete identity between the facts
7 Beats’ Complaint muddles two distinct concepts—that of “Beats by Dr. Dre” the
trademark, and “Beats Electronics, LLC” the company. To clarify, the “Beats by Dr. Dre” mark was in use as early as 2006 as the brand name under which the iconic headphone products would be sold. (See, e.g., Compl. ¶18.) Beats Electronics, LLC was registered as a corporate entity several years after the “Beats by Dre” mark was developed. (See Compl. ¶ 31.)
Case 2:14-cv-07537-FMO-MRW Document 11-1 Filed 11/21/14 Page 13 of 15 Page ID #:153
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
13
MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT
of the two cases, and the legal questions are somewhat distinct, there is a logical
relationship between them. The test need not even be “liberally construed” to reach
such a conclusion. Compare Albright v. Gates, 362 F.2d 928 (9th Cir. 1966)
(holding that in an action in which plaintiff alleged that defendants had slandered
him regarding his sale of oil securities, defendants’ counterclaim for the price they
had paid plaintiff for allegedly worthless oil securities arose out of the same
transaction). Allowing the two cases to proceed independently would require the
state court and this Court to evaluate much of the same evidence, hear many of the
same witnesses, and interpret many of the same facts. Such a result would defeat
the purpose of California’s compulsory cross-claim statute, i.e. to conserve judicial
resources by preventing two different courts from needlessly reviewing claims
arising out of a logically related factual context.
2. Beats’ federal claims arose before service of its answer in the
state court action
The second part of the section 426.30 test requires only that the claims
asserted by the plaintiff in the second action were available to it to be asserted as
cross-claims in the prior state action. See Align Tech, Inc., 179 Cal. App. 4th at
960. Here, there is no doubt that the claims asserted by Beats in this Court were
available to it before Beats served its answer to Mr. Lamar’s state court cross-
complaint. Indeed, while Beats has not yet served an answer to Mr. Lamar’s state
court cross-claims, its claims of false advertising and unfair competition against Mr.
Lamar allegedly arose on September 4, 2014 when a press release associated with
Mr. Lamar’s new headphones venture referred to him as a “co-Founder of Beats by
Dr. Dre.” (See Compl. ¶ 23.) There is no reason that Beats’ claims before this
Court could not be asserted in the state court action.
V. CONCLUSION
Given the nature of the relationship between the parties, and Mr. Lamar’s
early role in the development of the Beats brand, Beats cannot now plausibly allege
Case 2:14-cv-07537-FMO-MRW Document 11-1 Filed 11/21/14 Page 14 of 15 Page ID #:154
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
14
MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT
that it is a violation of the Lanham Act or California law for Mr. Lamar to be
described as a “co-Founder of Beats by Dr. Dre.” Its Complaint should be
dismissed on that basis alone. But even leaving aside the ultimately meritless
nature of Beats’ claims against Mr. Lamar in this Court, its Complaint further fails
to state a claim upon which relief may be granted because each of the claims
contained within it are compulsory cross-claims to those already asserted by Mr.
Lamar in state court. Either way, Beats’ claims should be dismissed with prejudice.
Dated: November 21, 2014 STEPHEN E. MORRISSEY BRIAN MELTON SUSMAN GODFREY L.L.P.
Stephen E. Morrissey Attorneys for Defendants Steven Lamar and ROAM, Inc.
Case 2:14-cv-07537-FMO-MRW Document 11-1 Filed 11/21/14 Page 15 of 15 Page ID #:155
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1 COMPLAINT
DAVID M. WALSH (SB# 120761)WENDY J. RAY (SB# 226269) KAI S. BARTOLOMEO (SB# 264033) ADAM M. SEVELL (SB# 266428) [email protected][email protected][email protected][email protected] MORRISON & FOERSTER LLP 707 Wilshire Boulevard, Suite 6000 Los Angeles, CA 90017-3543 Telephone: (213) 892-5200 Facsimile: (213) 892-5454
Attorneys for Plaintiff BEATS ELECTRONICS, LLC
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
BEATS ELECTRONICS, LLC,
Plaintiff,
v.
STEVEN LAMAR; ROAM, LLC; ROAM, INC; and DOES 1-10, inclusive,
Defendants.
Case No. 2:14-cv-7537
COMPLAINT FOR DAMAGES AND INJUNCTIVE RELIEF FOR:
(1) False Advertising (15 U.S.C. § 1125(a))
(2) Unfair Competition
(15 U.S.C. § 1125(a)) (3) False Advertising
(Cal. Bus. & Prof. Code §§ 17500, et seq.)
(4) Unfair Competition (Cal. Bus. & Prof. Code §§ 17200, et seq.)
DEMAND FOR JURY TRIAL
Plaintiff Beats Electronics, LLC (“Beats”) for its complaint against
defendants Steven Lamar (“Lamar”), ROAM, LLC, ROAM, Inc. (together
“ROAM”), and Does 1-10 avers as follows:
Case 2:14-cv-07537-FMO-MRW Document 1 Filed 09/26/14 Page 1 of 18 Page ID #:1
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
2 COMPLAINT
PRELIMINARY STATEMENT
1. Plaintiff Beats is a cutting-edge consumer electronics company that
creates and sells, among other things, high quality headphones under the “Beats”
and “Beats by Dr. Dre” trademarks. To capitalize on Beats’ strong reputation at the
time of ROAM’s launch of a competing headphone line, Defendants made false and
misleading claims regarding Lamar’s association with Beats and “Beats by Dr.
Dre” in connection with Defendants’ marketing of their new headphones.
2. Specifically, on or about September 4, 2014, Defendants began falsely
and misleadingly claiming that Lamar is a “Beats Electronics Co-Founder” or a
“co-founder of Beats by Dr. Dre.” Defendants also falsely and misleadingly
claimed that one of Lamar’s companies, Jibe Audio, LLC (“Jibe Audio”), was
responsible for the “concept, design, manufacturing and distribution of the Beats by
Dr. Dre headphone product line.”
3. Defendants’ claims are false and misleading because Lamar is not a
“co-founder” of Beats Electronics, LLC: he does not have—nor has he ever had—
any ownership interest in the company. Moreover, Jibe Audio was not responsible
for the “concept, design, manufacturing and distribution” of Beats’ headphones.
4. Following Defendants’ false and misleading claims, third-party
articles, Tweets, and blog-postings inaccurately referred to Lamar as a “co-founder”
or an “employee” of Beats. Lamar perpetuated these inaccuracies by Tweeting
direct links to these stories.
5. Although Defendants have removed some of these false and
misleading claims from social media and online sources, there remain false and
misleading statements on ROAM’s website and on Lamar’s social media profiles.
On information and belief, Defendants have taken no steps to inform the public that
these statements were incorrect.
6. Defendants’ false and misleading statements are clearly intended to
draw a connection between the well-known and extremely successful Beats brand
Case 2:14-cv-07537-FMO-MRW Document 1 Filed 09/26/14 Page 2 of 18 Page ID #:2
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
3 COMPLAINT
and ROAM’s new ROPES headphones, to Defendants’ commercial benefit.
7. Defendants’ false and misleading statements have caused confusion as
to the relationship between Beats and Defendants and have unlawfully associated
ROAM’s ROPES headphones with Beats’ headphones.
I. JURISDICTION AND VENUE
8. This Court has subject matter jurisdiction over this action pursuant to
15 U.S.C. § 1121 (action arising under the Lanham Act) and 28 U.S.C. § 1367
(supplemental jurisdiction).
9. Venue is proper in this judicial district pursuant to 28 U.S.C.
§ 1391(b)(2) because a substantial part of the events giving rise to the claim
occurred in this judicial district.
II. PARTIES
10. Plaintiff Beats is a limited liability company organized under the laws
of Delaware, with its principal place of business at 1601 Cloverfield Boulevard,
Suite 5000N, Santa Monica, California 90404. Beats was acquired by Apple Inc.
on August 1, 2014. Press coverage of the acquisition was, and continues to be,
extensive.
11. On information and belief, Defendant Lamar, an individual, is a
founder of Defendants ROAM, LLC and ROAM, Inc. On information and belief,
Lamar resides in Belvedere Tiburon, California.
12. Defendant ROAM, LLC is a limited liability company organized under
the laws of California. On information and belief, ROAM, LLC’s headquarters is
located in Belvedere Tiburon, California.
13. Defendant ROAM, Inc. is a Delaware corporation organized under the
laws of Delaware, whose registered agent is United States Corporation Agents, Inc.,
located at 1521 Concord Pike, Suite 301, Wilmington, Delaware 19803.
14. Defendants Does 1-10 are persons or entities whose identities and
roles are unknown, who are associated with one or more of the Defendants and, on
Case 2:14-cv-07537-FMO-MRW Document 1 Filed 09/26/14 Page 3 of 18 Page ID #:3
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4 COMPLAINT
information and belief, are residents of, or will be present in, the State of California
and this judicial district or have transacted business in the State of California during
the time period covered by this Complaint, and are subject to the jurisdiction of this
Court. Beats will amend its Complaint to include the name or names of said
persons or entities when that information becomes readily available.
III. STATEMENT OF FACTS
BACKGROUND
15. Beats was co-founded by legendary artist and producer Andre Young
(professionally known as “Dr. Dre”) and Jimmy Iovine, former Chairman of
Interscope Geffen A&M Records. Beats has developed revolutionary headphones
with the capacity to reproduce the full spectrum of sound that musical artists and
producers hear when producing music.
16. In or about early 2006, Dr. Dre and Mr. Iovine were collaborating on
designing and developing a new and innovative headphone. Defendant Lamar was
introduced to Dr. Dre and Mr. Iovine, and the three engaged in some discussions
about working with Lamar’s company, SLS International, Inc. (“SLS”).
17. After Dr. Dre, Mr. Iovine, and Lamar agreed to collaborate on
producing the headphone, Lamar breached the oral agreement.
18. In response, Mr. Iovine and Dr. Dre sued Lamar, SLS, Jibe Audio, and
other entities in July 2006. The parties settled that dispute on April 24, 2007. As
part of the settlement, all rights, title, and interest in the headphone design and the
trademark “Beats by Dr. Dre” were assigned exclusively to Dr. Dre and Mr. Iovine.
Dr. Dre and Mr. Iovine have had no further relationship with Lamar, SLS, or Jibe
Audio since the settlement of the 2006 lawsuit.
19. Beats’ first headphone model, the original Studio Headphone, was
released in the fall of 2008, more than two years after Dr. Dre’s and Mr. Iovine’s
brief collaboration with Lamar ended.
Case 2:14-cv-07537-FMO-MRW Document 1 Filed 09/26/14 Page 4 of 18 Page ID #:4
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
5 COMPLAINT
20. The original Studio Headphones, and the other headphones and
products that Beats has developed, designed, and sold since the original Studio
Headphones were introduced, have enjoyed tremendous popularity and sales. Beats
headphones were featured with Dr. Dre in commercials, and have been endorsed in
commercials by numerous performing artists, including William Adams
(professionally known as “will.i.am”), Justin Bieber, Lady Gaga, and Ellie
Goulding. Beats headphones have also been endorsed by famous athletes, such as
basketball superstars LeBron James and Kevin Garnett, tennis star Serena Williams,
and football superstars Colin Kaepernick and Richard Sherman. Beats headphones
are regularly worn by collegiate and professional athletes during nationally
broadcasted sporting events, including the Super Bowl and the NBA Playoffs.
High-profile fashion designers Fendi and Alexander Wang have designed special
edition Beats headphones. Popular magazines, such as Time, Vibe, and ESPN The
Magazine, have featured articles on Beats. Popular websites such as
Coolspotters.com have pages listing the numerous celebrities wearing or using
Beats headphones. These celebrity endorsements have given Beats’ headphone
products an aura of “coolness” unique in the headphone market, which Defendants
are attempting to capture through their false and misleading statements linking
Defendants’ planned new products to Beats.
21. Apple announced its intention to acquire Beats in May 2014, and that
it expected the transaction to close by September 2014. After Apple’s
announcement through the transaction’s closing on August 1, 2014, there was
extensive publicity and press coverage of the deal, including on television, radio,
and the Internet, and in publications such as the Los Angeles Times, the San Jose
Mercury News, the San Francisco Chronicle, and the New York Times.
22. On information and belief, Defendants timed the announcement of
their competing headphones to coincide with the enhanced publicity regarding
Beats resulting from Apple’s acquisition of Beats. Specifically, Defendants first
Case 2:14-cv-07537-FMO-MRW Document 1 Filed 09/26/14 Page 5 of 18 Page ID #:5
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
6 COMPLAINT
announced their new headphones on September 4, 2014, approximately one month
after Apple’s acquisition of Beats, even though ROAM’s headphones will not be
available until November 20, 2014.
DEFENDANTS’ FALSE AND MISLEADING STATEMENTS
23. On September 4, 2014, ROAM issued two press releases announcing
that it would be accepting pre-orders for its first headphone product—ROPES—
starting on September 5, 2014. ROAM included an inaccurate and misleading
representation that Lamar was a “co-founder” of Beats by Dr. Dre in each of those
press releases. The press releases were available on ROAM’s website,
www.ROAMwith.com, as well as on MarketWired and PRNewswire. On
information and belief, Defendants recently revised the two press releases by
deleting the misrepresentation that Lamar was a “co-founder” of “Beats by Dr. Dre”
in each of those press releases. Attached hereto as Exhibits 1 and 2 are true and
correct copies of ROAM’s September 4, 2014 press releases. Exhibits 3 and 4 are
true and correct copies of ROAM’s revised press releases as of September 22, 2014.
24. Until September 24, 2014, Lamar’s CrunchBase profile falsely and
misleadingly described him as a “Beats Electronics Co-Founder.” The claim was
listed under the section entitled “Person Details” and includes images of Beats’
trademark logos “b” and “beats by dr. dre.” On September 24, 2014, the statement
was partially revised. The profile now falsely and misleadingly claims that Jibe
Audio is “responsible for the concept and design of the Beats by Dr. Dre headphone
product line.” Exhibits 5 and 6 are true and correct copies of excerpts from
Lamar’s CrunchBase profile as of September 22 and September 24, 2014.
25. Until approximately September 22, 2014, the “Our Story” page on the
ROAM website had a prominent and misleading title which stated: “STEVEN
LAMAR is the co-founder of Beats by Dr. Dre,” adjacent to a photo of Lamar.
Exhibits 7 and 8 are true and correct copies of excerpts from ROAM’s website as of
September 14 and September 22, 2014.
Case 2:14-cv-07537-FMO-MRW Document 1 Filed 09/26/14 Page 6 of 18 Page ID #:6
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
7 COMPLAINT
26. Until September 15, 2014, the “Our Story” page on the ROAM
website falsely stated that “Steven Lamar is the founder of Jibe Audio, LLC, which
was responsible for the concept, design, manufacturing and distribution of the Beats
by Dr. Dre headphone product line.” On or about September 22, 2014, the
statement was partially revised. The website now falsely and misleadingly claims
that “Steven Lamar is the founder of Jibe Audio, LLC, which was responsible for
the concept and design of the Beats by Dr. Dre headphone product line.” Lamar
also made the same false claim about the role of Jibe Audio on his LinkedIn profile.
Exhibits 7 and 8 are true and correct copies of excerpts from ROAM’s website as of
September 14 and September 22, 2014.
27. Until approximately September 22, 2014, Lamar’s LinkedIn profile
and his Twitter profile misleadingly described Lamar as a “co-founder” of Beats by
Dr. Dre or Beats by Dre. On the Twitter profile, Lamar listed this claim
immediately under the statement that he is “Founder – ROAM.” Exhibits 9 and 10
are true and correct copies of excerpts from Lamar’s Twitter profiles as of
September 14 and September 22, 2014.
28. On September 8 and September 10, 2014, Lamar misleadingly claimed
that he was a “Beats by Dre Co-founder” in his Tweets about ROAM’s new
ROPES headphones. See Exhibit 9 (Lamar’s September 14, 2014 Twitter profile).
These false statements remain on his Twitter account.
DEFENDANTS HAVE CAUSED CONFUSION ABOUT LAMAR’S RELATIONSHIP WITH BEATS AND ITS PRODUCTS
29. As a result of these repeated misrepresentations that Lamar is a “co-
founder of Beats by Dr. Dre” and a “Beats Electronics Co-Founder,” and that his
company Jibe Audio was responsible for the “concept, design, manufacturing and
distribution” of Beats by Dr. Dre headphones, third parties are inaccurately
referring to Lamar as a co-founder of Beats, and at least two publications have
recently described him as an employee of Beats, neither of which is true.
Case 2:14-cv-07537-FMO-MRW Document 1 Filed 09/26/14 Page 7 of 18 Page ID #:7
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
8 COMPLAINT
30. Specifically, on September 4, 2014, the day ROAM issued the two
press releases describing Lamar as a co-founder of Beats by Dr. Dre and that Lamar
Tweeted a link to the www.ROAMwith.com website with the inaccurate and
prominent claim that he was a co-founder of “Beats by Dre,” numerous third parties
published or Tweeted articles that described Lamar as a Beats co-founder or Beats
employee, all made in the context of marketing and advertising his new and
competing product.
(a) On September 4, 2014, Business Insider published an article
titled “An Early Beats Employee Who Sued The Company For Cutting Him Out Of
Royalties Is Now Selling His Own $299 Headphones,” which referred to
Mr. Lamar as an “early Beats employee.” Business Insider even notes that in one
of the ROAM press releases “Lamar calls himself a ‘Beats by Dr. Dre co-founder.’”
Attached hereto as Exhibit 11 is a true and correct copy of the Business Insider
article.
(b) On September 4, 2014, The Verge published an article
describing Lamar as a “disgruntled Beats cofounder” and as “one of the company’s
earliest employees.” Attached hereto as Exhibit 12 is a true and correct copy of The
Verge article.
(c) On September 4, 2014, BGR published an article describing
Lamar as a “Beats cofounder” and stating that Lamar “has broken away from his
former company”—referring to Beats. Attached hereto as Exhibit 13 is a true and
correct copy of the BGR article.
(d) On or about September 4, 2014, additional articles with similar
inaccurate statements appeared on at least the following websites: LockerDome,
Engadget, and Gizmodo. Attached hereto as Exhibits 14, 15, and 16 are true and
correct copies of excerpts of these websites.
Case 2:14-cv-07537-FMO-MRW Document 1 Filed 09/26/14 Page 8 of 18 Page ID #:8
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
9 COMPLAINT
(e) Tweets about the newest headphones from a “Beats cofounder”
came from Engadget, Gizmodo and ZombiD and were subsequently re-Tweeted by
Lamar. See Exhibits 9 and 10 (Lamar’s Twitter profile).
(f) Highsnobiety Tweeted about “Beats’ co-founder’s” new
headphones, and Lamar re-Tweeted that Tweet. See Exhibits 9 and 10 (Lamar’s
Twitter profile). On its website, Highsnobiety even includes a link to an article
about ROAM’s new ROPES headphones in its listing of articles about Beats’
products, so that if one is searching for information about Beats’ products on the
Highsnobiety website, the first article that is listed is about Defendants’ new
competing ROPES headphone products. Attached hereto as Exhibit 17 is a true and
correct copy of an excerpt from the Highsnobiety website.
(g) Gear Hunger Tweeted about “Beats’ co-founder’s” new
headphones, and Lamar also re-Tweeted that Tweet. See Exhibit 9 and 10 (Lamar’s
Twitter profile).
(h) ThisThatNew published an article following Defendants’
misstatements entitled “Beats by Dre Cofounder Launches ROAM Ropes.” That
article starts off describing Lamar as “Ousted Beats by Dre cofounder” and then
goes on to discuss ROAM’s new competing ROPES headphones. Attached hereto
as Exhibit 18 is a true and correct copy of ThisThatNew’s article.
(i) An article that SuperCompressor published following
Defendants’ misstatements had a title that copied the language of the Tweet
verbatim: “Badass Necklace Headphones From A Beats By Dre Co-Founder.”
Attached hereto as Exhibit 19 is a true and correct copy of the SuperCompressor
article.
31. Defendants’ misleading statements that Lamar co-founded “Beats by
Dr. Dre” and that he was a “Beats Electronics Co-Founder” have led others to
believe that he was a co-founder of Beats even though Lamar had no relationship
with Mr. Iovine or Dr. Dre after the 2006 lawsuit was settled, and certainly did not
Case 2:14-cv-07537-FMO-MRW Document 1 Filed 09/26/14 Page 9 of 18 Page ID #:9
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
10 COMPLAINT
join them to co-found a new company—Beats Electronics, LLC—18 months later,
in October 2008. Moreover, Lamar’s company, Jibe Audio, never manufactured or
distributed any Beats headphones, nor was it responsible for the headphones’
concept and design. In fact, Jibe Audio was not even established until after the first
design patent was filed for Beats’ headphone products. Compare Exhibit 20 (U.S.
D552,077 S filed June 13, 2006) with Exhibit 21 (Registration date for Jibe Audio
dated July 5, 2006).
32. The fact that third parties have interpreted Defendants’ statements to
mean that Beats is Lamar’s “former company,” that Lamar was one of Beats’
“earliest employees,” and that Lamar was a co-founder of Beats itself demonstrates
the deceptive, confusing and misleading nature of Defendants’ claims, all in
connection with the marketing and advertising of Defendants’ new and competing
product.
DEFENDANTS ACTED WILLFULLY AND WITH AN INTENT TO CAUSE CONFUSION, MISTAKE AND/OR DECEPTION
33. On information and belief, Defendants’ claims that Lamar was a co-
founder of Beats Electronics and Beats by Dr. Dre, and that Lamar’s company Jibe
Audio was responsible for the concept, design, manufacture and distribution of
Beats headphones, are clearly intended to draw a connection between the well-
known and extremely successful Beats brand and ROAM’s new ROPES
headphones, to Defendants’ commercial benefit.
34. On information and belief, Defendants’ efforts to mislead the public
and tie the success of the Beats headphones to the launch of ROAM’s new
headphone line have been successful: the third-party articles and Tweets described
above discuss the launch of ROAM’s new ROPES headphones while also
describing Lamar as a Beats co-founder. The articles and Tweets also use the
phrase “co-founder of Beats,” or similar language, which gives unwarranted
Case 2:14-cv-07537-FMO-MRW Document 1 Filed 09/26/14 Page 10 of 18 Page ID #:10
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
theJasmineBRAND.com
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
11 COMPLAINT
legitimacy to ROAM’s headphones. Consumers can order the competing ROPES
headphones through links to ROAM’s website contained in many of the articles.
BEATS IS BEING IRREPARABLY HARMED
35. As a result of Defendants’ false and misleading statements, consumers
searching for information about Beats products are likely to find information about
Defendants’ products and links to the ROAM website, where Defendants’
competing headphones can be ordered. On information and belief, such consumers
are likely to draw an association between Beats’ successful headphones and
ROAM’s new headphone products, leading them to believe that Defendants’
untested new headphones are of the same high quality as Beats’.
36. On information and belief, consumers who are confused or deceived
into believing that there is an association between the ROAM product line and the
successful Beats by Dr. Dre products may decide to order Defendants’ competing
headphones instead of purchasing Beats’ products, causing Beats to lose sales.
37. On information and belief, consumers who test or buy Defendants’
headphones and are dissatisfied with their quality will associate that lower quality
with Beats’ headphones as a result of Defendants’ claims that Lamar, who also
identifies himself as the founder of ROAM, was a co-founder of Beats Electronics
and Beats by Dr. Dre.
38. If Defendants continue their false and misleading representations that
Lamar was a co-founder of Beats Electronics and Beats by Dr. Dre and that
Lamar’s company, Jibe Audio, was responsible for the concept, design,
manufacture and distribution of Beats by Dr. Dre products, Beats will be
irreparably harmed, including through loss of goodwill, reputation, market share,
and revenue. Such irreparable harm will continue unless Defendants are restrained
from making false representations about the nature of Defendants’ relationships
with Beats and remove all misleading statements from all public locations,
including but not limited to social media and online.
Case 2:14-cv-07537-FMO-MRW Document 1 Filed 09/26/14 Page 11 of 18 Page ID #:11
