Ok! then took legal action against Hello! saying that the publication of the unofficial pictures had caused it commercial damage.
A judge then awarded damages to £1,033,156 to OK!, only for Hello! to have an appeal against the decision upheld in 2005, forcing the damages to be paid back.
The House of Lords agreed with the original ruling which found Hello! was liable to OK! for the losses caused by Hello! magazine publishing the photos.
Law lords insisted that the money paid by OK! was significant and that any damages paid to the magazine should be focusing on the financial terms of the agreement, rather than any issues related to the privacy of Michael Douglas and Catherine Zeta Jones.
Lord Hoffman said: "The point of which one should never lose sight is that OK! had paid £1 million for the benefit of the obligation of confidence imposed upon all those present at the wedding in respect of any photographs of the wedding.
"That was quite clear. Unless there is some conceptual or policy reason why they should not have the benefit of that obligation, I cannot see why they were not entitled to enforce it. And in my opinion there are no such reasons. Provided that one keeps one's eye firmly on the money and why it was paid, the case is …quite straightforward."
The couple are no longer involved in the case after being awarded £14,600 in 2003 for the distress caused by the paparazzi photos.
The law lords will rule later on court costs related to the case.
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