A federal appeals panel in Manhattan on Thursday delivered an early Christmas gift to the heirs of J. Frederick Coots, taking future rights to his 1930s composition "Santa Claus Is Coming to Town" away from music giant EMI and returning them to his descendants.

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Reversing the trial court in a complicated copyright suit brought by a daughter and two granddaughters of Coots, the Second U.S. Circuit Court of Appeals said the family properly terminated rights Coots had granted to the holiday staple in 1934 to an EMI predecessor.

The catchy tune was most recently popularized as a theme song in the Will Ferrell hit movie "Elf." The copyright term at issue runs from 2016 through 2029. The Second circuit said EMI had offered $2.75 million to Coots' family before the suit, which was rejected.