The ruling means that Nestle would have to take the case to the House of Lords, and potentially Europe, to get the shape trademarked without the word "Polo" or any specification on size or colour.
A Nestle spokesperson said: "We are obviously disappointed and are considering the next steps. I think we have the opportunity to appeal but we will be looking where we go from here."
Britons eat 100m Polos a year, with 140 of the sweets being consumed every second, according to Nestle. However, the move to make the shape a trademark has been opposed by rival confectioner Mars, which has argued that it is not distinctive enough to meet legal requirements of a trademark.
The judge, Justice Mummary, ruled on the side of Mars in the case yesterday.
He remarked: "This is an appeal concerning Polos, the mint with a hole in the middle. This is an appeal with a hole in the middle. It is dismissed."
Nestle also lost a case in July 2003 to trademark the phrase, "Have a Break", for its KitKat confectionery.
If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the .