(REUTERS) – Audio equipment maker Monster has sued Beats Electronics, owned by Apple, over alleged “fraud and deceit” in the way that Beats acquired control of the rights to the popular “Beats by Dr. Dre” headphones.
According to the suit filed in San Mateo County Superior Court in California on Tuesday, Monster engineered the success of the headphones and was unfairly cut out before Beats was sold to Apple last year.
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% 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.
Beats was not immediately available for comment.
The complaint did not mention a dollar amount in damages. It seeks general and special damages as well as punitive damages against Beats, HTC and the individuals named.
In May 2014, Apple (AAPL) bought Beats hoping to win points with the music industry and turn Beats Music into a strong competitor to Spotify and other streaming services.