Assange, the founder of Wikileaks, is currently wanted by the Swedish authorities on probable cause of crimes including rape (the less serious version of the crime) and they fear that there is a great risk that he will evade legal proceedings or punishment.
A European Arrest Warrent has been placed on Assange, and he is currently still staying out of the reach of the British police in the Ecuadorian embassy in London. That is no reason to scrap the detention order, though, the judges found.
The court does, however, criticize the actions of Swedish prosecutors in the judgement, writing: "The Court of Appeal notes that the investigation into the suspected crimes has come to a halt and considers that the failure of the prosecutors to examine alternative avenues is not in line with their obligation - in the interests of everyone concerned - to move the preliminary investigation forward."
Some have called on the Swedes to travel to London to interview Assange, something they have rejected.
That is not enough to lift the detention order, however, the judgement goes on: "the reasons for detention still outweigh the reasons to the contrary since Julian Assange is suspected of crimes of a relatively serious nature and there is a great risk that he will evade legal proceedings or punishment if the detention order is set aside".
The 43-year old Australian was taken into custody in London but freed on bail, later claiming political asylum in Ecuador's embassy, where he has been stuck since June 2012 to avoid a British extradition to Sweden.