Universal Music has defeated the production company behind rapper Eminem in a case centered around iTunes royalties, Bloomberg writes. FBT Productions has argued that Eminem is entitled to half of the royalties collected by Universal from sales of his tracks at the iTunes Store; Apple receives a small commission beforehand. At the heart of the dispute has been whether Eminem's arrangement constitutes a licensing agreement, or simply another distribution deal. Universal has argued for the latter, rejecting suggestions that the special restrictions on iTunes downloads create a licensing agreement by default.

A Los Angeles jury sided with this view in its decision, denying FBT the total of $1.47 million it had asked for in damages relating to unpaid track and ringtone royalties. The company has been awarded $159,000 in a separate claim of misallocated royalties, but it is believed that FBT lawyers will nevertheless appeal the verdict.

An FBT victory would potentially be beneficial to both Apple and artists, as a number of prominent catalogs -- including The Beatles and Kid Rock -- have been deliberately withheld from iTunes over revenue concerns. Such artists receive very little from download sales, claims FBT plaintiff Joel Martin. It may thus make more sense in many circumstances to force the public into buying physical albums.