A protester has been fined £350 for reading out the names of soldiers killed in Iraq at the Cenotaph.
Rai argued the new law breached human rights legislation
Milan Rai, 40, from Hastings, East Sussex, was arrested inside the "exclusion zone" in Westminster, where protests now need police permission.
Mr Rai argued that the new law contravened Human Rights legislation.
But a judge said his was not a spontaneous protest, but an organised event for which he had deliberately failed to get permission on principle.
Passing sentence, District Judge Nicholas Evans told Rai: "You knew what the law was.
"You quite with your eyes wide open, decided not to comply with it."
Rai had admitted that his 2005 protest breached the Serious Organised Crime and Police Act, which states all protests within a half-mile of Parliament require prior police permission.
He was fined £350 for the unauthorised demonstration and told to pay £150 costs within 28 days.
But he responded to the fine by telling the court: "I'm unable to comply with any financial penalty."
High Court bid
Rai, founder of anti-war group Justice Not Vengeance, contacted police before his demonstration, but refused to fill in the paperwork to get it authorised.
After being spotted protesting at 0930 GMT on 25 October, he was given a notice by police asking him to stop within 10 minutes - when he did not, he was arrested.
He is now consulting with civil rights group Liberty, and said he may take his case to the High Court.
Anna Fairclough, legal officer for Liberty, said: "Many would agree that peacefully commemorating victims of war is perfectly reasonable, which makes the court's failure to act against this preposterous law all the more disappointing."
The government says the law is aimed at tightening up security, following incidents like the clashes between police and pro-hunt campaigners in Parliament Square in September 2004.
Several protesters have already fallen foul of it. Last week Mark Barrett was fined £250 for organising weekly tea parties in Parliament Square, in protest at the ban.
The only protester allowed to continue without permission is long-term peace activist Brian Haw.
He has successfully argued that as his five-year vigil in Parliament Square pre-dates the law, it does not apply to him. The government is appealing against that decision.