"The court has decided to uphold the judgement that was under appeal," Kassem's lawyer Nasser Amin said on Facebook.
Kassem was sentenced to six months in prison and a fine of around $650 after being convicted of defaming a former minister and contempt of officials -- charges the European Parliament called "politically motivated" as Egypt gears up for a presidential election in December.
According to his now-suspended Free Current political alliance, Kassem was "a potential presidential candidate" in the election, which is already fraught with accusations of repression.
In advance of the appeal, the European Parliament passed a resolution on Wednesday calling for Kassem's immediate release and expressing "deep concern over Egypt's restrictive electoral process," after presidential hopefuls were jailed or harassed.
The Egyptian parliament released a statement on Friday rejecting the European Parliament resolution, which it said was "a violation of the independence of the Egyptian judiciary".
The Egyptian parliament said allegations of opposition candidates being harassed were "bereft of objectivity and reveal a premeditated intention to issue negative judgements in advance on the electoral process."
According to rights groups, dozens of supporters of potential presidential candidate Ahmed al-Tantawi have been detained, while his campaign reports those trying to submit nominations at government registry offices are facing harassment and intimidation.
Candidates must receive 25,000 nominations or 20 parliamentary endorsements to be eligible.
Sisi is widely expected to win a new term but analysts warn the electoral process faces "a loss of legitimacy" in the absence of any meaningful challengers.
Analysts say the election -- originally expected next year -- was moved up in advance of a fresh currency devaluation, which is expected to further erode Egyptians' savings and cause widespread discontent.
Egypt is in the throes of a major economic crisis, with the currency losing half its value since March 2022 and inflation hitting 39.7 percent last year.