Sheeran, seated at the defense table in a suit and tie between his lawyers, hugged his attorneys when the verdict was read.
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The jury reached its decision after roughly three hours of deliberations.
Sheeran was smiling from ear to ear and spoke shortly after the verdict was read.
"I am obviously very happy with the outcome of the case and it looks like I'm not going to have to retire from my day job," he said.
The lawsuit was filed back in 2017 by the family of Ed Townsend, co-writer of Marvin Gaye's 1973 classic. It accused Sheeran of copying the chord progression, rhythm and other elements of the song.
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For days Sheeran and his team insisted he did nothing wrong. The four-time Grammy winner even put on a mini concert in court and played his guitar to demonstrate to the jury how common the four-chord progression is in "Thinking Out Loud."
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Sophia Neis, a 23-year-old juror in the case, said that mashup played in court was a defining moment in the decision, as was the song in general.
"The key factors were the song as we were allowed to hear it and the deposit copy which was in question," Neis said. "There was a lot of back forth and we all just wanted to make sure we were very comfortable with our decision."
The family of Townsend did not speak following the verdict, but his daughter -- throughout the eight-day trial -- maintained this was always about protecting her father's authentic music.
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"If the jury had decided this matter the other way, we might as well say goodbye to the creative freedom of songwriters," Sheeran said.
Sheeran said the trial took a significant toll and he missed his grandmother's funeral back in Ireland, but said it was important to fight it.
Fans erupted into cheers as Sheeran left the courthouse.
"Let's Get It On" has been heard in countless films and commercials and garnered hundreds of millions of streams, spins and radio plays since it came out in the '70s.
"Thinking Out Loud" won a Grammy for song of the year in 2016.