In a scathing 126-page judgment delivered on Friday, Justice Anna Katzmann found the billionaire was a "most unimpressive witness" who gave false evidence, including concocting a story to exculpate himself.

"He saw political and personal advantage in both (the song's) notoriety or popularity and the message it conveyed and he thought that he could get away with using it merely by altering some of the words," she said.

"He was wrong."

Lead singer Dee Snider contended Mr Palmer used his band's 1980s hit as inspiration for a song Aussies Not Gonna Cop It, broadcast in videos and ads for his United Australia Party in the 2019 federal election campaign.

The businessman first argued the song was actually a rip-off of the Christmas carol O Come, All Ye Faithful, before relying on the defence of fair dealing for the purpose of parody or satire.

But the Federal Court judge rejected his case, finding in favour of Universal Music Publishing Pty Ltd.

She ordered Mr Palmer to pay $500,000 for the "notional licence fee" and additional "substantial" damages of $1 million.

While noting the singer and businessman had "little in common", Justice Katzmann concluded the music and lyrics of the two songs "have a good deal in common".

Snider testified that his song has "a strong message of defiance, but the lyrics are quite non-specific" and it was important to him that the message not be directed to any particular authority figures or causes.

"According to Mr Snider, many people consider it one of the greatest songs of rebellion ever written," the judge said.

In 2018, Mr Palmer instructed staff to begin negotiations with Universal over getting a licence to use a "re-recorded version" of the Twisted Sister track with possible lyric changes, but these were later abandoned.

In his evidence, Mr Palmer claimed Aussies Not Gonna Cop It was an original work he had composed.

"Mr Palmer waxed lyrical about his creative side" saying he had regularly published poetic works, some of which his wife described as "very moving and genuine".

He claimed his source for the song was the movie Network in which Peter Finch said "we're not gonna take it anymore".

"So from that, I developed the idea - Australians are not prepared to accept it - I thought that was a similar type thing that I worked that back, and ended up with these words," he testified.

"This evidence appeared to take everyone else in the virtual courtroom by surprise," the judge said.

Snider became aware of the ads and videos when his Twitter followers "were up in arms about them" and the band's website and social media were bombarded with objections over the use of the band's hit.

"Not only was my song being misappropriated and misrepresented, but the production of the advertisement on every level was horrendous: the poor lyrics, the poor quality vocals and the poor production values as well as the context of what appears to be a cheap advertisement for a party whose values I knew nothing about."

Noting the experts were in "furious agreement", the judge concluded the two recordings were "strikingly similar".

In imposing the additional $1 million award, she described Mr Palmer having acted in "flagrant disregard of Universal's rights" and when challenged by the company he conducted "a ferocious counterattack".

His false evidence indicated the need "for both punishment and deterrence is high".

"Both before and during the proceeding, Mr Palmer taunted, mocked and derided Mr Snider in both mainstream and social media, perhaps for his own amusement but doubtless to attract publicity for himself and/or the UAP."

The judge also permanently restrained Mr Palmer from reproducing the song and ordered him to remove it from all online locations.

Mr Palmer issued a brief statement saying he and his lawyers will review the judgment and then consider an appeal.

Australian Associated Press