The film, about a cleaner who falls in love with a mysterious river creature, was the most nominated film at this year’s Oscars, with 13 nods and four wins.
The plagiarism lawsuit was brought by the son of late playwright Paul Zindel, who claimed that studio Fox Searchlight, and other defendants including director Guillermo del Toro and producer Daniel Kraus, had ripped off his father’s play.
Zindel, a Pulitzer-prize winning writer, died in 2003.
Fox Searchlight had called the claims “baseless [and] wholly without merit”, while del Toro told Deadline he had “never heard of this play” before making the film.
The claim was filed just a day before the Oscar ballots were sent out to 8,000 members of the Academy.
California federal judge Percy Anderson has concluded that there were only “minor similarities” between the works.
In a copy of the decision, acquired by The Hollywood Reporter, the judge said that while they share a “basic premise”, the “concept is too general to be protected”.
The play Let Me Hear You Wisper tells the story of a cleaner called Helen, who while working at a private research laboratory falls in love with a dolphin being tested on for use as a weapon of war.
The Shape Of Water is centred around a mute cleaner called Elisa (played by British actress Sally Hawkins), who works in a government laboratory and falls in love with an amphibious river creature being tested on in the centre.
The judge compared the two works’ settings, themes, pacing, mood, characters and dialogue, and found minimal similarities between the two.
The decision concludes: “Despite some superficial similarities and some shared basic plot points, the stories told by the film and the book on the one hand and the play on the other are different.”
The case was rejected with prejudice – meaning it cannot be brought back to court.
The Shape Of Water won four Oscars, including best picture and best director, a Golden Globe and a BAFTA.
To date it has taken £150m ($200m) at the box office worldwide.