Record company EMI has lost an appeal against a court ruling that Australian band Men at Work ripped off a popular Australian folk tune in their 1980s hit Down Under.

The Federal Court today dismissed the appeal, with Justices Arthur Emmett, Jayne Jagot and John Nicholas concluding "there was an infringement in respect of the recording Down Under".

Colin Hay, lead singer of legendary rock band Men At Work. Credit:Paul Rovere

EMI filed the appeal in February last year after it was found the famous flute riff from the band's smash hit was unmistakably the same as children's tune Kookaburra Sits in the Old Gum Tree.

The decision left Kookaburra's copyright owners, Larrikin Music, poised to claim millions of dollars in unpaid royalties from EMI, and Down Under songwriters Colin Hay and Ron Strykert.