The House of Lords has backed Belfast City Council's decision not to grant a licence to a sex shop.
The shop stocks adult toys and DVDs
The council had consistently refused to licence Miss Behavin' Ltd on Gresham Street, in the city centre.
The shop owner's appealed this and the Court of Appeal ruled against the council. However, five Law Lords have now overturned that judgement.
A solicitor who represented the shop's owner said his client was considering whether to appeal the decision.
Sean Fox said his client might decide to take the case to Europe.
He said: "The judgement was only released today and we would like to take time to consider it carefully, but on first viewing it is clear to us that there may well be adequate grounds to refer this matter to the court of human rights."
Trevor Martin of the council said it had "not said no to sex shops, we have said no to sex shops in that area".
The four-year-long legal wrangle began in 2003 when councillors decided that the Gresham Street/North Street area of Belfast was not an appropriate place for sex shops and refused to license them.
They said the appropriate number of sex shops was nil.
Among the reasons they gave were proximity to schools, bus stops and areas of family shopping and because of future development of the area.
The sex shop company subsequently took legal action, however, in 2003 the Northern Ireland High Court ruled in favour of the council.
That decision was reversed by the Appeal Court a year later which ruled the city's council had contravened the human rights of the company by refusing the licence to trade.
The council refused to licence the sex shops
The latest decision by the Lords means council prosecutions against Miss Behavin' and six other sex shops in the area for trading without a licence - which have been on hold pending the outcome of the appeal to the Lords - may proceed.
Welcoming the Law Lords' decision, Trevor Martin added: "It was never a blanket ban and if someone made an application for a licence - in, say, Duncrue Street - it would not be the same situation."
The council appealed to the Law Lords because it felt the Belfast Court of Appeal ruling had implications far beyond sex shops and could have led to human rights arguments being used to challenge any licensing decision.
Ruling in favour of the council, Lord Hoffmann said: "The right to vend pornography is not the most important right of free expression in a democratic society and the licensing system does not prohibit anyone from exercising it - it only prevents him from using unlicensed premises for that purpose."
Baroness Hale said: "There are far more important human rights in this world than the right to sell pornographic literature and images in the back streets of Belfast city centre."
She said no one was suggesting pornographic literature and images should be inaccessible to those in Belfast who wished to gain access to them and, as far as the judges knew, the council had not refused to license sex establishments elsewhere in the city.
She said: "There were good reasons for refusing to license establishments in this street and even better ones for refusing this particular company a licence.
"The suggestion that this is a disproportionate limitation on the company's right to freedom of expression is, to my mind, completely untenable."