The United States Patent and Trademark Office has canceled the Washington Redskins' trademark registration, saying the team name is "disparaging of Native Americans, when used in relation to professional football services."
The decision means that the team can continue to use the Redskins name, but it would lose a significant portion of its ability to protect its financial interests. If others printed the name on sweatshirts, apparel, or other team material, it becomes more difficult to go after people who use it without permission.
The 2-1 ruling on Wednesday came after a heated campaign to change the name gained momentum over the past year.
The case was filed on the behalf of five Native Americans at the Trademark Trial and Appeal Board.
The board's decision is similar to one it issued in 1999. That ruling was overturned in 2003 in large part on a technicality after the courts decided that the plaintiffs were too old and should have filed their complaint soon after the Redskins registered the name in 1967.
The new case was launched in 2006 by a younger group of Native Americans, and was heard by the board in March 2013.
The group argued that the Redskins should lose their federal trademark protection based on a law that prohibits registered names that are disparaging, scandalous, contemptuous or disreputable.
The football team will appeal the ruling, said Bob Raskopf, trademark attorney for the Washington Redskins, in a statement.
"This case is no different than an earlier case, where the Board cancelled the Redskins' trademark registrations, and where a federal district court disagreed and reversed the Board," he said.
The Washington Post first reported the story.
—By CNBC.com. The Associated Press contributed to this report.