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Bad news for the Marley family. They lost a lawsuit, which sought ownership of Bob Marley’s most famous tracks

Executives at Universal Music were declared the rightful owners of copyrights to five albums that Marley recorded between 1973 and 1977 for Island Records. The decision came down in Manhattan court on Friday, September 10.

The albums includes “Catch a Fire”, “Natty Dread” and “Exodus” and were all recorded with Marley’s band The Wailers.  Marley died of cancer in 1981, aged 36. UMG previously withheld royalties from the Marley Family.

Friday’s ruling is a defeat for Marley’s widow Rita and nine children who had sought to recover millions of dollars in damages over UMG’s effort to “exploit” what they called “the quintessential Bob Marley sound recordings.”

L. Peter Parcher and Peter Shukat, who are lawyers for the family, did not immediately return calls seeking comment. UMG spokesman Peter LoFrumento said the company is pleased with Cote’s ruling.

Marley’s  family accused UMG of intentionally withholding royalties from their company Fifty-Six Hope Road Music Ltd, and ignoring a 1995 agreement assigning them rights under the original recording agreements, court papers show.

It also accused UMG of failing as required to consult with them on key licensing decisions, including the use of Marley’s music as “ringtones” on AT&T, Sprint and T-Mobile phones, the papers show.

But Cote concluded that Marley’s recordings were “works made for hire” as defined under U.S. copyright law, entitling UMG to be designated the owner of those recordings, for both the initial 28-year copyright terms and for renewals.

“Each of the agreements provided that the sound recordings were the ‘absolute property’ of Island,” Cote wrote. “Whether Marley would have recorded his music even if he had not entered the recording agreements with Island is beside the point.”

She added that it was irrelevant that Marley might have maintained artistic control over the recording process. What mattered, she said, was that Island had a contractual “right” to accept or reject what he produced.

Cote also denied the Marley family’s request for a ruling upholding its claims over digital downloads, citing ambiguity in a 1992 royalties agreement.

She directed the parties to enter court-supervised settlement talks, and scheduled an October 29 conference.

The case is Fifth-Six Hope Road Music Ltd v. UMG  Recordings Inc, U.S. District Court, Southern District of New York, No. 08-06143.