The constitutional court ruled that if the impact on the usage rights of the intellectual property owner is "negligible, then artistic freedom overrides the interest of the owner of the copyright".
At the heart of the dispute is a short drum sequence looped repeatedly in the song "Nur mir" (Only Me) by Sabrina Setlur, also famous for her past relationship with German former tennis star Boris Becker.
The sequence originally came from Kraftwerk's 1977 release "Metall auf Metall" (Metal on Metal).
The electronic music veterans had already won German court
backing for damages and an injunction over the song, but Pelham and Setlur appealed and brought the case to the country's highest court claiming it infringed artistic freedom.
At the court hearing in Karlsruhe in November, Huetter insisted that the commandment "thou shalt not steal" applied also to music.
But Pelham argued that sampling is common practice in the hip hop genre.
He said he works from a set of interesting music sequences
Germany's constitutional court acknowledged this common practice in hip hop in overturning the previous court verdict that was in favour of Kraftwerk.
It noted that imposing royalties on composers could be crippling as copyright owners can demand any amount, or they can simply reject the request for usage.
Composers should be allowed to create works without any financial risks or suffer any restrictions in the creative process, argued the court.
Sampling is therefore permitted if it is part of a new composition that does not stand in direct competition to the sampled work, and does not hurt the music patent owners financially, the German court found.
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