The Court of Appeal in London has ruled that Dan Brown, author of The Da Vinci Code, did not reproduce ideas from an earlier work in his best-selling novel.
Dan Brown said authors should be free to draw from historical sources
Michael Baigent and Richard Leigh, who claimed that themes from The Holy Blood and the Holy Grail were plagiarised by Brown, now face a legal bill of £3m.
The High Court in London ruled in April 2006 that US writer Brown had not copied the work of the two authors.
The Da Vinci Code, published in 2003, has sold more than 40m copies.
Baigent and Leigh's book, which was published in 1982, has sold some two million copies around the world, and was a best-seller when it was first released.
In a statement issued after the appeal's rejection, the co-authors said they were disappointed by the ruling.
"We believed, and still do, that non-fiction authors would suffer and be discouraged from extensive research if it was found that any author could take another's ideas, 'morph' and repackage them, then sell them on," they said.
Both books explore the idea that Jesus and Mary Magdalene had a child together, and their bloodline still exists.
Co-authors Leigh (l) and Baigent face a hefty legal bill
Despite the High Court ruling last year that Brown had not committed copyright infringement, the two authors decided to press on with an appeal, maintaining their claim that Brown had lifted central themes from their book.
Random House, the publisher of both books, was awarded the costs of the appeal, estimated at £300,000. Brown was not in court.
Gail Rebuck, the head of Random House, said: "Misguided claims like the one that we have faced, and the appeal, are not good for authors, and not good for publishers.
"But we are glad that the Court of Appeal has upheld the original judgment and that, once again, common sense and justice have prevailed, helping to ensure the future of creative writing in the UK," she added.
Following the case's dismissal last year, Brown said the verdict showed that Baigent and Leigh's claim was "utterly without merit".
The outcome cleared the way for a film based on The Da Vinci Code, starring Tom Hanks and Audrey Tautou, which premiered at the Cannes Film Festival last year.