In late 2003, Hello! magazine was ordered to pay one million pounds ($2.42 million) to rival showbusiness magazine OK! for running paparazzi photographs of the Hollywood couple's nuptials.
During the original case, Douglas and Zeta Jones claimed an additional £600,000 in personal damages from Hello! for the illicit pictures, with the Oscar-winning British actress telling the court she felt "devastated" and "violated" when she saw them.
Yesterday, the magazine won its appeal against paying damages to the rival publication.
The court also refused to increase the orginal £14,600 damages payout awarded to the Hollywood couple.
"This was a spat between two rival publishers and not between Hello! and the Douglases," the lawyer for Hello!, Chris Hutchings, said following the ruling.
"The judgment is a resounding win for Hello!".
The magazine admitted it had run the pictures as a so-called "spoiler", to dull the sales impact of OK!'s supposedly exclusive coverage of one of the top celebrity weddings of the year in 2000.
However, it insisted that such tactics were common in the cut-throat magazine industry and that they had never been considered illegal.
OK! had paid the couple one million pounds for the sole media rights to take photographs of the event.
"This was something previously not considered unlawful. We are in the position that if you are going to compete in this industry you have to publish spoilers," Hello!'s lawyer, James Price, told the court.
At the wedding in New York, freelance British paparazzo Rupert Thorpe managed to evade a massive security cordon guarding the wedding hotel and surreptitiously take photos of the groom and bride, her dress and the cake.
OK! publishing house Northern and Shell said the case had shown its arguments were valid, and that it would thus appeal further to the House of Lords, Britain's highest legal body.