The Federal Court of Justice decided that domestic courts should not hear her case after the Court of Arbitration for Sport (CAS), considered the highest sports tribunal, rejected her appeal over her ban.
The five-time Olympic champion was seeking more than 4 million euros (£3.11 million) in damages from the ISU after it banned her for two years in 2009 over irregular blood results, although the German never failed a drug test.
She insisted, providing extensive scientific data, that she had a hereditary blood condition that her father also had, and vowed after Tuesday's decision to fight on at Germany's Federal Constitutional Court.
Her case had been seen as a litmus test - a win potentially would have triggered a flood of doping cases being challenged in domestic courts around the world and eroding the position of CAS.
"This means that the German courts have no jurisdiction to revisit a final CAS decision. It is also confirmation that the CAS arbitration clauses inserted in the regulations of sports organisations are valid," the CAS said in a statement.
"More importantly, the Federal Court of Justice has emphasised that CAS is a genuine arbitration tribunal in the sense of German law, and that such sports jurisdiction is necessary for the uniformity in sport."
The Federal Court of Justice, Germany's highest for civil and criminal jurisdiction, said an arbitration agreement between her and the ISU at the time she tested positive, which ruled out taking the case to a domestic court, was valid.
"The anti-trust division of the Federal Court of Justice did not follow the argumentation of the plaintiff," it said in a statement. "It decides that her suit is inadmissible as it is opposed by the defence of the arbitration agreement."
The CAS rejected her appeal as did the Swiss Federal Tribunal. However, a Munich court said in 2015 it would allow the 44-year-old Pechstein to go ahead with a lawsuit.
The skater said she would now take the case to the next stage. "Despite this verdict I am not considering giving up," she wrote on her website. "The battle for justice will be continued at the Federal Constitutional Court."
Pechstein, who missed the 2010 Vancouver Olympics due to the ban, competed at the 2014 Sochi Games, narrowly missing out on medals in the 3,000m and 5,000m.
The athlete has said she wants to compete at the 2018 winter Olympics in Pyeongchang in what would be her seventh Games.
The world footballers' union FIFPro, which gave financial help to Pechstein, said her case had highlighted "structural and procedural deficits" at CAS.
"FIFPro calls on CAS and other sport stakeholders to work with player and athlete unions to ensure a proper structural representation and absolute impartiality of its tribunals and administrations," FIFPro said in a statement.
(Reporting by Karolos Grohmann and; Brian Homewood; Editing by Mark Heinrich)
