The troubled actress took legal action in 2011 over the lyric "I got it locked up like Lindsay Lohan" in Pitbull's song 'Give Me Everything'.
Lohan claimed she never gave permission for her name to be used in the song, and sought a portion of the profits from the hit track.
TMZ reports that a New York federal judge ruled against the actress, arguing that as a form of artistic expression the song is protected under the First Amendment to the United States Constitution.
The First Amendment prohibits any laws that restrict freedom of speech.
The judge also ruled against Lohan's claim for emotional distress, saying her name was barely mentioned in the song.
Lohan has had a hard time recently. Still notorious for her hard-partying lifestyle, Lohan has been in the news for her continuing financial troubles.
The actress has apparently been unable to pay her rent, with Charlie Sheen loaning her $100,000 to avoid defaulting on paying her back taxes.
Pitbull's track didn't mention Lohan's name enough to cause emotional distress
Last year Lohan was charged with assault after allegedly striking a woman in a night club. She was also charged with lying to the police and obstructing an officer.
Her film The Canyons was recently rejected by SXSW festival, and biopic Liz & Dick was slated by critics.
But Lady Gaga sprang to its defence, saying she liked the film and is rumoured to have given Lohan a role in the video for 'Nothing On (But The Radio)', which is thought to be the first single from ARTPOP.
Below: Lindsay Lohan, Charlie Sheen: Movie star meltdowns