The Falcons sought to recover the bonuses after Vick pleaded guilty to federal charges in a dogfighting operation. The bonuses were paid from 2004-2007.
A special master ruled in October that the Falcons were entitled to recover the bonuses. The Falcons argued that Vick used proceeds from a contract he signed in 2004 to finance his illicit activities.
But U.S. District Judge David Doty of Minneapolis ruled that the Falcons' recovering the bonus money would violate the NFL collective bargaining agreement. The agreement does not allow signing bonuses to be forfeited for years a player has already performed.
Arguments turned on interpretations of the collective bargaining agreement. At a November hearing, a union attorney argued that Vick's "roster bonus" should be treated the same as a "performance bonus," which can't be forfeited under the agreement. The league maintained that the roster bonus should be treated like a "signing bonus allocation," which could be forfeited.
Doty ruled that once Vick made the Falcons' 80-man roster, he earned the roster bonuses and the team cannot demand their forfeiture.
Vick received a 23-month jail sentence. He entered a minimum-security prison in Leavenworth, Kan., last month.
Vick is scheduled to be released from federal prison in October 2009, but with good behavior, his legal team is hoping the quarterback will be released in 18 months. Vick will go to trial on state charges in Virginia in April, reports CBS News affiliate WGCL-TV in Atlanta.