Isabel Duarte, who has represented the McCann family throughout the libel case, said she would now be challenging this latest decision at the Supreme Court.
At the centre of the case is the book, Maddie: Truth of the Lie, which was published by Gonçalo Amaral a year after Madeleine McCann’s disappearance and shortly after quitting the PJ police force.
In the book, the former detective raises question marks over the parents’ behaviour and possible involvement in their daughter’s disappearance.
The Lisbon Appeal Court this week also overturned decisions against publishers Guerra e Paz, multimedia company Valentim de Carvalho Filmes and private television channel TVI.
In its ruling, the court is quoted as saying by Lusa News Agency that the action lodged by the McCanns had failed to prove their allegations of the damages they said were inflicted on them by Amaral through the publication of his book.
The judgment also argues that the rights of the McCann family had not been offended by the book, which it explains is essentially a description and interpretation of facts in the investigation up until Gonçalo Amaral’s retirement from the PJ police. Facts which the court said are public knowledge.
The court also recognised the right for Gonçalo Amaral to freely express his opinion, and nullified an injunction prohibiting the sale of his book.
Guerra e Paz have since said Amaral’s book will be back on the shelves by next week.
In the first trial hearing which ended at the beginning of 2015, Isabel Duarte had argued that Amaral used privileged information in the book, with the court at the time ruling that Amaral’s freedom of expression should be limited by his position as a former police detective and lead investigator in the case.
But the court also found that it was not proven that the allegations made in the book “in any way contributed to the hindering of the course of the investigation into the disappearance of the minor Madeleine McCann.”
This week’s Lisbon Appeal Court ruling came a day after Detective chief superintendent Mick Duthie told London’s Evening Standard that Scotland Yard’s probe was ongoing and officers still hoped to find her alive.
In April the Home Office granted the investigation, called Operation Grange, an additional €130,000 to cover another six months of the inquiry.
This came after the number of officers working on the operation was scaled down from 29 to four in October 2015.
Duthie, who is head of Scotland Yard’s homicide and major crime command, said: “There is ongoing work. There is always a possibility that we will find Madeleine and we hope that we will find her alive.
“That’s what we want and that’s what the family and the public want and that is why the Home Office continue to fund it. There is work that needs to be done still.”