But Hello!'s lawyers replied: "As a result of our win Richard Desmond (who owns the rival magazine) will now have to write a cheque for a very large amount of money indeed."
Today's decision follows a bitterly contested High Court hearing in 2003 when the film stars gave evidence in person. Welsh-born Oscar winner Zeta-Jones said she had felt " devastated, shocked and appalled" that unauthorised pictures had been taken at the wedding in the New York Plaza Hotel in November 2000.
The couple had signed an exclusive deal with rival OK! after turning down a higher bid from Hello! But Rupert Thorpe, son of the former Liberal leader Jeremy Thorpe, evaded a massive security cordon and snatched some blurred frames.
Mr Justice Lindsay ruled that Hello! had breached the stars' rights of confidence. He awarded OK! £1,033,156 for commercial damage to its expected exclusive coverage.
Today Lord Phillips, the Master of the Rolls, and Lords Justice Clark and Neuberger allowed Hello!'s appeal on the OK! decision but dismissed its claim against Douglas and Zeta-Jones.
During the hearing, James Price QC, representing Hello!, had told the judges the pictures had been published as a "spoiler" which was a well-known tactic in the newspaper and magazine industry.
Outside court Hello! solicitor Chris Hutchings, of M Law, said: "This was a spat between two rival publishers and not between Hello! and the Douglases. The judgment is a resounding win for Hello!
"Catherine Zeta-Jones famously said in her evidence that £1 million was not very much money to her. To fork out three times that amount to recover less than £15,000 defies all logic. This is a case that should never have come to court."
Katherine Rimell, representing OK!, said: "The court has accepted that OK! has lost 1.4 million sales and suffered a loss of over £1 million as a result of the pictures but that it has no remedy in law. But this is not the end of the story and if I were them I would not count their chickens yet." The judges said that the "photographs invaded the area of privacy which the Douglases had chosen to retain. It was the Douglases, not OK!, who had the right to protect this area of privacy or confidentiality".
They went on: "We conclude that the judge was wrong to hold that OK! was in a position to invoke against Hello! any right to commercial confidence."