The inhabitants of four flats in the expensive complex complained that people on the Tate's viewing platform were "relentlessly" invading their privacy by looking through the floor-to-ceiling windows and into their homes.
They had appealed for parts of the free platform to be closed or for privacy screens to be introduced, but a judge at London's High Court dismissed the claim on the basis that having museum-goers looking through the residents' windows did not amount to a "nuisance."
"These properties are impressive, and no doubt there are great advantages to be enjoyed in such extensive glassed views, but that in effect comes at a price in terms of privacy," judge Anthony Mann said in court on Wednesday, according to the UK's PA Media news agency.
Two-bedroom apartments in the luxury Neo Bankside complex have appeared on the market for more than £1 million ($1.3 million).
A resident, Ian McFadyen, complained in court that "when our blinds are open and the viewing platform is in use, we are more or less constantly watched, waved at, photographed and filmed by people on the viewing platform," according to PA.
However, Mann agreed with the Tate's argument that the remedy for the problem lay in the owners' own hands, ruling that they could "lower their solar blinds" or "install privacy film (or) net curtains," and dismissed the appeal against an earlier ruling by a lower court.
"Over the hundreds of years that the tort of nuisance has existed, there has never been a reported case in this country in which a court has found that overlooking by a neighbour constituted nuisance," the ruling explained.
The case has rumbled on since early 2017, when residents first launched legal proceedings against the gallery.
The Tate Modern is one of the world's leading contemporary art museums and is a popular tourist attraction in London. Its viewing platform opened in 2016, four years after construction on the adjacent apartment block finished. Work had begun in 2006, and plans had always included a viewing platform -- something of which the developer of the apartments had been aware, the court heard.
The platform is visited by around 500,000 people a year and limits entry to 300 people at a time, some of whom look into the apartments and very occasionally take photographs, the court said in its judgment.
It found 124 posts on Instagram over a two-year period between 2016 and 2018 that featured the apartments.
The Tate argued the platform provides "a unique, free, 360-degree view of London." The museum, which occupies a former electric power station, is located on the city's South Bank, offering impressive views of landmarks including St. Paul's Cathedral.
Signs on the viewing platform encourage visitors to respect the privacy of the gallery's neighbors. The Tate said it was "grateful" for the ruling and added it would "continue to be mindful of the amenity of our neighbours."
Natasha Rees, head of property litigation at the law firm Forsters, which represented the residents, said the owners were "obviously very disappointed" with the ruling.
"This is not a case of 'mere overlooking' but a situation that can clearly be distinguished from the type of overlooking experienced between residential or commercial flats and houses, a fact that was accepted by the first instance judge," she added.
Last year, a 6-year-old French boy was thrown from the viewing platform and suffered severe injuries. Jonty Bravery, 18, has pleaded guilty to attempted murder.
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