50 Cent Loses Lawsuit, Owes Headphone Company $16M

April 10, 2014  |  

What brand of headphones are those? via Newspix.pl /WENN.com

Hip-hop mogul 50 Cent will have to fork over a chunk of his estimated $500 million net worth, having just lost a major lawsuit by a headphones manufacturer who claimed Fitty (born Curtis Jackson) stole their design. A judge thought so too and awarded the manufacturer $16.1 million, reports Radar.

Sleek headphones will receive $11,693,247 in damages, plus $4,488,331 in attorney’s fees.

According to the suit, a deal for Sleek to market headphones for the rapper fell through. After 50 invested more than $1 million in Sleek to create his line, the rapper went to another company and, according to court documents obtained by Radar, Sleek felt the Sync by 50 headphones were “basically the same design, mechanically” as the ones they had developed.

The $230 Sync by 50 was produced by SMS, for which 50’s listed as CEO of the company, reports Digital Trends. Prior to the Sync  by 50, SMS released SMS Street by 50, which ran for $400.

But 50 says it wasn’t his fault and blamed “certain security lapses” for permitting Sleek’s competitors to uncover their unique design. An arbitrator, however, found that “there was no evidence presented by Jackson that such alleged lapses … resulted in any public disclosure of any trade secret or confidential information of Sleek.” And actually the arbitrator said Jackson’s team purposely made a similar model.

Sleek also claimed that Jackson and his assistants stole confidential private client data from a website they was developed to promote 50’s forthcoming headphones. In all, there were 3,639 potential customers’ email addresses and other data that “disappeared” from Sleek’s servers after 50’s people were given the password.

When Sleek emailed 50’s team about the website breach, his personal business manager, Nicolee Martin wrote, “[Sleek] is onto us, LOL. They emailed and called … about the data.”

Another member of Jackson’s team responded: “Tell him something like, sorry, you just have to finish editing a video for 50 or something, we’ll get to it, LOL.”

Following this, Sleek filed a lawsuit against Jackson for misappropriating trade secrets, breaching his fiduciary duty due Sleek, participating in a civil conspiracy, breaching his confidentiality pact with Sleek, and being unjustly enriched. The rapper countersued, claiming Sleek fraudulently lured him into entering into an investment with them and other allegations. While an arbitrator assigned to the case sided with Sleek last May and agreed to an interim agreement of $11,693,247 in damages, plus attorney’s fees, 50 has been fighting the additional fees. He even alleged racism at one point.

Finally an arbitrator has signed off on the final agreement, awarding Sleek $4,488,331 in attorneys’ fees. The grand total of the judgment: $16,181578.

But the arbitrator did find some fault with Sleek, writing the company’s founders “did not have a good head for business. Thus the arbitrator can sympathize with Jackson’s growing frustration that he was putting money into Sleek and not, in his opinion, seeing the results that he assumed would be forthcoming on a timely basis…”

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