A court in New York has dismissed claims Tame Impala are owed over $450,000 (£295,000) in royalty payments.
The lawsuit had been filed by the rights management organisation BMG.
It claimed Steve Pavlovic, the founder of Modular Recordings, had withheld royalty payments from the Australian band.
But the case has now been dismissed, with Mr Pavlovic being cleared.
The band's latest album Currents went to number three in the UK earlier this year.
It's been widely reported BMG issued a "mechanical license" to Modular in March 2014 - that means Modular would be allowed to look after distribution for Tame Impala's early EPs plus the albums Innerspeaker and Lonerism.
But under the deal Modular would not own the music itself and royalties were due to be paid within 45 days of each financial quarter.
BMG says this never happened so was looking to get the money through the courts.
The system of paying royalties is "complicated. It's so complicated," according to the band frontman Kevin Parker.
In June, when the case first came to light, he told Australian publication The Music: ""I didn't know there was going to be any suing going on, so I was as surprised and interested as anyone.
"Put it this way, I've had [the royalties system] explained to me a number of times, how the money went missing and where it went and why it went missing, but about 30 seconds into the explanation I'm just lost because there's a difference between mechanical royalties and song writing royalties."
Mechanical royalties are the payments made based on the amount of albums sold.
Song writing royalties include payments for each time a record is played on the radio, for example.
Parker continued: "In the end, I'm lucky enough to travel the world and make albums, and not have to worry about not having a job... I just find it counter-productive to get worked up over [the payments]."
Responding to the court's decision, Pavlovic said: "I'm deeply sorry for any upset caused to Tame Impala given that I've always been a staunch supporter and fan of the band; and to BMG given the relationship we've always enjoyed with them."
He said he hopes "a line can finally be drawn under this unfortunate chapter".