March 6 (Bloomberg) -- Universal Music Group, a Vivendi unit, won a jury verdict over royalties from Apple Inc. iTunes downloads and mobile-phone ringtones in a lawsuit brought by the Detroit producers who helped launch rapper Eminem’s career.

A jury in Los Angeles rejected arguments by FBT Productions LLC that Eminem is entitled to half the net receipts the record company gets for the downloads, rather than his standard royalties from record sales. The producers, who first signed Eminem in 1995, get 40 percent of the royalties.

“It’s a big disappointment,” Joel Martin, one of the plaintiffs, said after the verdict was read.

The jury awarded the producers $159,000 on a separate claim that Universal Music had misallocated royalties between them and Eminem. FBT had asked for $1.47 million in damages for underpaid royalties from downloads and ringtones. Martin said he’ll likely appeal.

A verdict for the producers could have brought millions of dollars for artists whose contracts with record labels pre-date the birth of digital download sites and mobile phone ringtones. It also might have fortified efforts of artists who have refused to sell their recordings on iTunes, such as Kid Rock and the owners of the Beatles catalog, because they receive so little of the proceeds, Martin said in an interview during the trial.

Universal Music’s lawyers told the jurors that iTunes downloads are no different from retail sales of compact discs under the contract’s royalties provisions. FBT Productions claimed that downloads instead fall under a contract clause governing the label’s licensing of the recordings to third parties, for which the artist gets a 50 percent royalty.

“We’re very pleased with the jury’s decision,” Peter Lofrumento, a spokesman for Universal Music, said in a telephone interview.

Eminem, whose real name is Marshall B. Mathers III, wasn’t a party in the case.

FBT Productions, owned by brothers Jeff and Mark Bass, signed Eminem to an exclusive recording deal in 1995. In 1998, they made a deal with rapper Dr. Dre’s Aftermath Records, a unit of Universal Music, which released Eminem’s breakthrough album, “The Slim Shady LP.”

The case is FBT Productions v. Aftermath Records, 07-3314, U.S. District Court, Central District of California (Los Angeles).

To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net.

Last Updated: March 6, 2009 15:44 EST