The Supreme Court on Monday struck down part of a law that bans offensive trademarks in a ruling that is expected to help the Washington Redskins in their legal fight over the team name.
The justices ruled that the 71-year-old trademark law barring disparaging terms infringes on free speech rights.
The ruling is a victory for an Asian-American rock band called the Slants, but the case was closely watched for the impact it would have on a separate dispute involving Washington's football team.
Redskins owner Dan Snyder said he was "thrilled" with the Supreme Court's ruling, and team attorney Lisa Blatt said the court's decision effectively resolves the Redskins' longstanding dispute with the government.
"The Supreme Court vindicated the Team's position that the First Amendment blocks the government from denying or cancelling a trademark registration based on the government's opinion," Blatt said in a statement.
Slants founder Simon Tam tried to trademark the band name in 2011, but the U.S. Patent and Trademark Office denied the request on the grounds that it disparages Asians. A federal appeals court in Washington later said the law barring offensive trademarks is unconstitutional.
The Redskins made similar arguments after the trademark office ruled in 2014 that the name offends American Indians and canceled the team's trademark. A federal appeals court in Richmond put the team's case on hold while waiting for the Supreme Court to rule in the Slants case.
In his opinion for the court, Justice Samuel Alito rejected arguments that trademarks are government speech, not private speech. Alito also said trademarks are not immune from First Amendment protection as part of a government program or subsidy.
"It offends a bedrock First Amendment principle: Speech may not be banned on the ground that it expresses ideas that offend,'' Alito said in his opinion for the court.
Trademark office spokesman Paul Fucito said officials are reviewing the court's ruling and plan to issue further guidance on how they will review trademark applications going forward.
Tam insisted he was not trying to be offensive but wanted to transform a derisive term into a statement of pride. The Redskins also contend their name honors American Indians, but the team has faced decades of legal challenges from Native American groups that say the name is racist.
Despite intense public pressure to change the name, Snyder has refused, saying it "represents honor, respect and pride.''
In the Slants case, government officials argued that the law did not infringe on free speech rights because the band was still free to use the name even without trademark protection. The same is true for the Redskins, but the team did not want to lose the legal protections that go along with a registered trademark. The protections include blocking the sale of counterfeit merchandise and working to pursue a brand development strategy.
The trademark office for years had raised no concerns about the Redskins, agreeing to register the name in 1967, 1974, 1978 and 1990. But the office canceled the registrations in 2014 after finding the name disparaged Native Americans.
A federal appeals court had sided with the Slants in 2015, saying the First Amendment protects "even hurtful speech that harms members of oft-stigmatized communities.''
The Associated Press contributed to this report.