Karen Murphy had to pay nearly £8,000 in fines and costs for using a cheaper Greek decoder in her Portsmouth pub to bypass controls over match screening.
But she took her case to the European Court of Justice.
The ECJ now says national laws which prohibit the import, sale or use of foreign decoder cards are contrary to the freedom to provide services.
The decision could trigger a major shake-up for the Premier League and its current exclusive agreements with Sky Sports and ESPN, and pave the way to cheaper viewing of foreign broadcasts for fans of top-flight English games.
However, whereas this opens up opportunities for individuals to watch overseas broadcasts at home, it remains unclear whether in future games can be shown in pubs using foreign decoders and broadcasts, as the ruling also threw up a number of copyright issues.
The ECJ said national legislation, which banned the use of overseas decoders, could not “be justified either in light of the objective of protecting intellectual property rights or by the objective of encouraging the public to attend football stadiums”.
While Karen Murphy can now watch Premier League matches herself via the Greek service, it is not clear she can show them to her customers.
The court has ruled that although there is no copyright in the matches themselves, there is copyright in the “branding” around the football – the Premier League graphics, music and highlights.
If those are there, pubs will still need the League’s permission to show its matches.
It’s now up to the UK High Court to interpret today’s ruling, and that is not likely to happen for several months.
But the Premier League’s said the ECJ’s answers to the High Court’s questions were “complex”.
“We are pleased that the judgment makes it clear that the screening in a pub of football-match broadcasts containing protected works requires the Premier League’s authorisation,” the league said.
Only Sky and ESPN are currently authorised by the Premier League to make such broadcasts.
Karen Murphy said she no longer had a decoder box in her Red, White and Blue pub and would wait for the “stamp of approval” from the High Court before reinstating it.
The ECJ findings will now go to the High Court in London, which had sent the matter to the ECJ for guidance, for a final ruling.
However, it is unusual for a member state High Court to pass a different judgement from one provided by the ECJ.
The judges said the Premier League could not claim copyright over Premier League matches as they could not considered to be an author’s own “intellectual creation” and, therefore, to be “works” for the purposes of EU copyright law.
However, the ECJ did add that while live matches were not protected by copyright, any surrounding media, such as any opening video sequence, the Premier League anthem, pre-recorded films showing highlights of recent Premier League matches and various graphics, were “works” protected by copyright.
To use any of these extra parts associated of a broadcast, a pub would need the permission of the Premier League.
The legal battle kicked off six years ago, when Ms Murphy was taken to court for using the Nova firm to show matches at the Red, White and Blue pub.
Using the Greek service, she had paid £118 a month, rather than £480 a month with the official broadcaster.
Licensed broadcasters encrypt satellite signals, with subscribers needing a decoder card to access them.
Mrs Murphy took advantage of an offer to UK pubs to use imported cards.