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50 Cent, You Owe Us $16M! Headphones Company Wins Big In Lawsuit Over Claims Rapper Stole Design

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Apr. 8 2014, Published 7:26 a.m. ET

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Thank goodness for Vitamin water. Rapper 50 Cent's roughly $500 million net worth -- based largely to his sale of the sugary drink -- just took a major hit in a court case from a headphones manufacturer who claims he stole their high-tech design. A judge agreed, and has ordered Fitty, aka Curtis Jackson, to pay up -- to the tune of $16.1 million!

Jackson's feud with the headphone company has raged for more than a year, but a judge finally signed off on the total due to his final business partners, Sleek headphones: $11,693,247 in damages, plus $4,488,331 in attorney's fees.

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Sleek sued 50 Cent last year after a planned deal to market headphones for the rapper fell through. After investing more than $1 million in Sleek to start his line, Jackson then produced another set of headphones with a different company, and according to court documents obtained by Radar, Sleek was stunned to discover the headphones, Sync by 50, were "basically the same design, mechanically" as the model they had developed.

READ Court Docs Claim, 50 Cent Stole Our Secrets & Now He Has To Pay!

Jackson alleged that "certain security lapses" had allowed Sleek's competitors to uncover their unique design, but an arbitrator 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." Instead, they insisted that Jackson's team had used their knowledge of the headphones' design to produce a similar model.

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In addition, Sleek claimed that Jackson and his assistants blatantly stole confidential private client information from a website Sleek developed to promote the headphones before they were produced. That website gathered 3,639 potential customers' email addresses and other data, which "disappeared" from Sleek's servers after Jackson's team was given the password.

"It was very valuable information," the court papers claim, but when Sleek emailed Jackson's team about the breach, his personal business manager Nicolee Martin wrote, "Sleek is onto us, LOL. They emailed and called … about the data"

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Another member of Jackson's team's response was equally flip: "Tell him something like, sorry, you just have to finish editing a video for 50 or something, we'll get to it, LOL"

For these reasons, Sleek sued Jackson for misappropriating trade secrets, breaching his fiduciary duty owed to Sleek, participating in a civil conspiracy, breaching his confidentiality agreement with Sleek, and being unjustly enriched. In a counter-suit Jackson alleged Sleek fraudulently induced him into entering into an investment with them and breaching their fiduciary duties to him.

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An arbitrator to the case sided with Sleek last May, granting all of their claims and denying all of Jackson's. The tentative interim agreement awarded Sleek $11,693,247 in damages, plus attorney's fees.

For the past year, Jackson has been battling to get out of paying the additional fees -- even claiming racism at one point --but an arbitrator just signed off on a final agreement this week, awarding Sleek $4,488,331 in attorneys' fees, bringing the grand total of their payout to $16,181578.

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The founders of Sleek "did not have a good head for business," the arbitrator wrote in the final statement. "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. Likewise, the arbitrator can appreciate the Sleek team's frustration with what they perceived to be Jackson's team taking control of their company … However, Jackson's frustrations do not justify the actions he took or were taken on his behalf …"

And now he has to pay.



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