In an emailed statement, Google, which owns the video-sharing site, said that the Hamburg Regional Court had dismissed many aspects of the lawsuit filed against it by Frank Peterson but had told the company not to make three videos available on its platform.
Arnd Haller, Google Germany's legal director, added that the decision, issued on Friday, disregarded the e-commerce directive and results in "substantial legal uncertainty for all providers of video platforms, opinion forums, social communities, blogs and many other Internet services in Germany".
He said that YouTube would appeal the Court's decision.
Frank Peterson is a record producer whose clients include Sarah Brightman, whose recordings are believed to be the subject of the lawsuit.
The ruling in this case comes less than a week after the same court declined to grant an injunction against YouTube in a case brought by collecting societies who want the company to stop showing around 600 videos on its German site.
The lawsuit was filed by German collecting society GEMA, in an alliance with seven other societies including the BMI in the US, France's SACEM and SABAM of Belgium.
GEMA said it had been negotiating with YouTube for a new licensing deal over music contained in videos aired on the platform since April 2009. Talks broke down between the two sides in May this year.
Despite not being granted an injunction, GEMA said in a statement that the Hamburg court had agreed that the plaintiffs were, in principle, eligible for a cease and desist order against YouTube.
A spokesperson for GEMA told Managing IP that it has four weeks to lodge an appeal and is now discussing its options with the other collecting societies involved in the lawsuit.