The U.S. 9th Circuit Court upended a 2009 decision that allowed Universal Music Group to pay 18 percent royalties for digital sales, a standard fee for the physical recording of a song, the Detroit Free Press reported Saturday.
But the appeals court ruled that a contract between Universal and FBT Productions concerning rapper Eminem's recordings should handle digital sales as a third-party licensing arrangement, which has a standard royalty fee closer to 50 percent.
The decision "sets no legal precedent as it only concerns the language of one specific recording agreement," Universal spokesman Peter Lofrumento said in a written statement.
However, the news hasn't gone unnoticed, either.
"If downloads are the way of the future, this is going to have massive implications. It changes the playing field," said attorney Gary Stiffelman, who has represented Eminem and singer Michael Jackson.
FBT managing partner Joel Martin said, "This potentially readjusts the economics between the artist and the record company, and that's been long overdue.
"It puts Eminem in a position he should have been in to begin with, which is to receive a larger portion of the download royalties," he said.
Copyright 2010 United Press International, Inc. (UPI).