Plaintiff says he worked to help Beats Headphones succeed

Jibe Audio, a proposed venture for a high-end line of celebrity endorsed headphones, could have solved the financial woes encountered in the early days of Beats Headphones, former hedge fund manager Steven Lamar testified Thursday. The idea just didn’t jibe with his potential celebrity backers.

In contrast to opening remarks from Beats’ counsel Arturo Gonzalez of Morrison & Foerster LLP a day earlier, who portrayed Lamar as a hanger-on with little actual involvement in the early days of Beats, Lamar spent much of his time on the stand Thursday detailing the lengths he allegedly went to ensure the product’s success.

Lamar said he pitched Jibe, an incorporation of the names of Lamar’s chosen celebrity endorsers, at the home of music producer Quincy Jones in 2006. He sought to establish the company after the board of directors of SLS Audio, of which he was president, shot down a direct investment.

Lamar said the board, which was made up of “conservative, older gentleman,” wasn’t willing to risk investing at a time of severe financial difficulty for the company.

So he turned to the potential backers that made up Jibe’s name: Jones, Jimmy Iovine, producer Mark Burnett, and musician Emilio Estefan. While defendant Andre Young — aka the Dr. Dre of “Beats by Dre” — was included in the discussion, Lamar admitted his name didn’t fit with the naming scheme.

“Yeah, no offense,” Lamar said. “We wanted it to sound cool.”

But none of the potential investors backed the project, Lamar said, and shortly thereafter a spat developed between the Beats partners and Lamar. Lamar later notified Iovine and Young via email that he would move forward on the project with other celebrity endorsers if the duo were hesitant. He filed a trademark for “Beats” to protect the brand, he testified, and was “shocked” to find Iovine had filed a lawsuit for breach of contract in response.

While Beats has held language was put in the contract to specifically block Lamar from bringing further claims, Lamar said he was careful not to sign any contracts that included such clauses. Although one former Beats attorney had informed him the headphones company intended to limit the agreement to only the first product line, Lamar said that lawyer was not involved in settlement negotiations following Iovine’s suit. No one else said anything about limiting the agreement, Lamar said.

When compared with the argumentative first day of opening statements, Thursday’s testimony proved notably tamer and was mostly limited to interactions between Lamar and his counsel, Davida Brook of Susman Godfrey LLP. Most of Brook’s time seemed focused on disputing claims made about Lamar a day earlier and retreading evidence opposing counsel had put forward that she felt lacked context.

Gonzalez objected sparingly, though almost all of his interjections prompted sidebars with Los Angeles County Superior Court Judge David S. Cunningham III.

One dispute developed over a video excerpt from Iovine’s deposition, in which he said he hadn’t read every line of the contract at issue. Gonzalez seemed to believe the clip lacked context, but after consideration, Cunningham allowed it to be played for jurors.

Gonzalez is slated to begin cross-examination of Lamar on Friday.