Marcus Webb claimed that Stallone's screenplay for "The Expendables" was plagiarised from his own work called "The Cordoba Caper" which was also about a group of American mercenaries on a Latin-American rescue mission, the New York Post reported.
In legal papers, Webb apparently claimed that both stories had 20 "striking similarities". Stallone claimed he never saw Webb's script.
The 66-year-old "Rocky" star said that he based his draft on a script called 'Barrow' by David Callaham who ultimately received co-writer credit for "The Expendables".
One of the similarities was that both screenplays featured a villain named General Garza but the judge noted that "Garza is a common Hispanic surname."
US District Judge Jed Rakoff found Webb's arguments not persuasive at all in his 18-page decision.
"The Court has carefully examined the entire litany of plaintiff's proffered 'striking similarities' and finds none of them remotely striking or legally sufficient. Any reasonable fact-finder would have to conclude that these are two very different screenplays built on a familiar theme: mercenaries taking on a Latin American dictator."
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The court dismissed the case on summary judgement, meaning that there was not enough evidence in the initial stages to necessitate bringing the dispute before a jury.
"The Expendables" has proved to be a profitable movie franchise for Stallone. After the success of the first film, which premiered in August 2010, a sequel followed in August of this year. Production on "The Expendables 3" is scheduled to begin next year.