Far-right activist Blair Cottrell has been rejected in his bid to fight for "free speech" in the High Court but will continue his campaign in Victoria's County Court.

The United Patriots Front leader appeared in the County Court on Tuesday to appeal his conviction for inciting hatred, contempt and ridicule of Muslims, after making a video beheading a dummy in protest of a Bendigo mosque.

Cottrell and supporters Neil Erikson and Christopher Neil Shortis were convicted in September 2017 and fined $2000 each.

Lawyer John Bolton had lodged an application with the High Court, arguing Cottrell had been charged with an "invalid law" under the Australian constitution.

He previously told AAP "free speech" was protected under the constitution, "which protects political discourse".

However, Mr Bolton told Judge Lisa Hannan on Tuesday the High Court dismissed the application, referring the matter back to the County Court.

The lawyer said he would now argue there was "no such class of persons as Muslims" that could be offended by the video, given the variety among the Islamic faith.

"Who is this supposed to have caused people to think bad thoughts about?" he argued, adding he'd call witnesses to examine "what 'Muslim' means".

He added a comment about Saudi Arabian beheadings, to which Judge Hannan quickly replied was "not relevant".

Mr Bolton also asked the judge to hear the "constitutional matter", requiring her to notify the attorney-general but she said she didn't have power to determine a constitutional matter.

The prosecution plans to call six witnesses to the trial, including City of Bendigo council workers and police.

"It's being drawn out deliberately, I think, probably to see how much money we've got," Cottrell told reporters outside court.

"I'm not going to give up."

Cottrell was supported in court by Erikson, who earlier abandoned his appeal bid.

After the hearing, Cottrell tweeted a video telling followers he hadn't "failed anything".

"The prosecution has found a law that the County Court can hear that matter - the High Court doesn't need to, so the constitutional matter has been sent back to County Court for Judge Hannan to hear," he said.

"I haven't failed anything. The matter is still active. The law still may be unconstitutional."

The appeal was set down for 10 days from August 8, which Judge Hannan said she thought was too long.

Cottrell next returns to court on June 5 for directions.