Jinshil and Christopher Duquet of Evanston said they relied on bad legal advice when they left South Korea with the baby after participating in what they thought was a lawful private adoption, the Chicago Tribune reported.
Instead, they found they didn't have the proper paperwork for her adoption when they arrived at Chicago's O'Hare International Airport with the baby.
"It looks like South Korea has prevailed," said a spokeswoman for the law firm hired to represent the South Korean government in local and federal court cases.
The spokeswoman said the baby would be placed with a South Korean family for adoption once she arrives home.
Both the baby's birth mother and grandparents relinquished parental rights to the Duquets and do not want the child back, officials said.
The U.S. Justice Department has declined to comment on the case.
Costly malfunction causes beer flood at Boston-area brewery
Wisconsin business offering 'therapeutic cuddling' forced to close