$16 Million Awarded By Arbitrator Against 50 Cent in Trade Secret Spat

In a case out of Florida involving the rapper known as “50 Cent” an arbitrator found the rapper liable for trade secret misappropriation, among other claims, in the creation of his own line of headphones. The arbitrator awarded, the plaintiff in the case, Sleek Audio, LLC, a little over $11.5 million in damages. Attorney’s fees were also awarded to Sleek and two other individual plaintiffs in the amount of nearly $4.5 million.

Summary of Case

Curtis J. Jackson, III, (aka “50 Cent”) had originally invested in a company known as Sleek Audio, LLC, to design a line of headphones.  Jackson also became a member of Sleek’s board.  Sleek began creating a design for over-the-ear headphones known as “Sleek by 50.” However, eventually Sleek and Jackson parted ways in 2011.  Thereafter, Jackson collaborated with another company, of which he was a majority owner, SMS Audio, to create the headphones known as “Street by 50” and “Synch by 50.”  Jackson hired individuals to work on the SMS Audio headphones that had already had access to the design of Sleek’s headphones.

Sleek then sued Jackson for misappropriation of trade secrets in relation to the headphone design of SMS Audio.  Jackson brought claims against Sleek or fraud in the inducement to enter into a securities purchase agreement and operating agreement.  The claims went to arbitration.

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