She took her fight for the right to use the cheaper provider to the European Court of Justice (ECJ) which ruled in October 2011 that having an exclusive system was "contrary to EU law".
But the Premier League claimed a partial victory, after the ECJ said it maintained the copyright for some sections of the broadcast.
Mrs Murphy, who ran The Red, White and Blue pub in Portsmouth, Hampshire, said she believed she had won "90%" of the battle.
The ruling was enough for all sides to concede today at London's High Court that Ms Murphy's conviction could not stand, - though many issues over screening games remain outstanding.
Mrs Murphy took her fight to the ECJ after being ordered to pay almost £8,000 in fines and costs.
The case is being seen as of importance to the way soccer TV rights are sold in the future and could have a crucial impact on the game as a whole.
A Sky spokesperson said “The UK courts have already ruled that the unauthorised use of the Premier League’s copyrighted material via foreign satellite systems in pubs is illegal. This remains the case following the ruling on Karen Murphy. We will continue to protect our legitimate customers by supporting action against licensees who break the law. At the same time, we will continue to work with the licensed trade to help even more pubs and clubs enjoy the business benefits of live sport.”