Footage of the incident, which took place in October 2014, sparked outrage in Spain but on Tuesday, a court in Melilla decided to drop the case for lack of evidence.
Rights group Prodein that filmed the violence and submitted the evidence to court, vowed to fight back.
"We are going to appeal," spokesman Jose Palazon told AFP.
The footage shows eight Civil Guard police officers trying to force a group of migrants off the top of a six-metre (20-foot) high fence separating Melilla from Morocco.
As a migrant nears a ladder provided by police and attempts to descend, he is repeatedly hit by policemen with batons and falls to the ground.
The footage then shows him carried to the Moroccan side of the fence without receiving any medical attention.
A judge in Melilla on Tuesday dropped the case against the eight police officers citing lack of evidence, saying the victim had not been identified.
Although the images showed officers using a "disproportionate" level of force, the judge found that "the evidence was limited to the video footage and statements from police and some witnesses".
But Palazon rejected his argument, saying that not enough effort had been made to locate the victim. "All sorts of efforts could have been done to identify the victim in Morocco," he told AFP.
Melilla and Ceuta, another Spanish enclave on Morocco's northern coast, form the only land border between Europe and Africa.
Each year, thousands of migrants risk their lives trying to enter the two territories to try to find a better life in Europe.