The appeals court agreed Matthew Fisher, who played the haunting organ theme, was entitled to co-authorship but said he will receive no money from past or future royalties.
"For nearly three years this claim has been a great strain upon myself and my family. I believe the original trial was unfair and the results wrong," Brooker said. "I would hope that now, we can all get on with our lives."
Lord Justice John Mummery said Fisher was "guilty of excessive and inexcusable delay in asserting his claim."
Fisher, who quit the band in 1969 and is now a computer programmer in London, filed his claim to joint ownership nearly 40 years after the song was recorded and became one of the anthems of the 1967 "Summer of Love." The record has sold 10 million copies, and Rolling Stone magazine has ranked the song 57th on a list of the 500 greatest of all time.
Brooker argued that it was his idea to use the theme based on Bach's "Air on the G String" that Fisher played on the track, and that he was unable to make his case properly because Fisher did not tell him he was pursuing his legal claim.
Brooker, who still tours with the band, said he and lyricist Keith Reid wrote the song before Fisher joined the band in March 1967.
The two had called Fisher's earlier court victory a dangerous precedent, saying it meant any musician who had played on any recording in the past four decades could claim joint authorship.
The judge rejected Fisher's claim for an estimated $2 million in back royalties.
Mummery said the issue of who will pay legal costs will be decided later, as well as whether Fisher can appeal the decision to the House of Lords, Britain's highest court.
In December, a judge awarded the classically trained Fisher a 40 percent share in the copyright of the song, saying his organ solo was "a distinctive and significant contribution to the overall composition."
"A Whiter Shade of Pale," famous for its cryptic lyrics - "We skipped the light fandango, turned cartwheels 'cross the floor" - topped the British charts for five weeks in 1967 and was a top five hit in the U.S.
