In its 2-1 ruling issued on Wednesday, the Trademark Trial and Appeal Board, an independent tribunal within the USPTO, wrote that it was charged with determining only whether the trademark was offensive to the people it referenced, not the entire population. Five Native Americans, representing four tribes, brought the case against the league.
Although the Redskins name and past logos are involved in the decision, the trademarks that were canceled do not include the current Redskins logo.
"Petitioners have found a preponderance of evidence that a substantial amount of Native Americans found the term Redskins to be disparaging when used in connection with professional football," the ruling said. "While this may reveal differing opinions with the community, it does not negate the opinions of those who find it disparaging."
The ruling does not force the NFL or Snyder to change the name, but trademarks registered between 1967 and 1990 will no longer be protected under federal law if the NFL and the Redskins lose an appeal to the U.S. District Court.
Bob Raskopf, the trademark attorney for the Redskins, said the team will appeal Wednesday's ruling and is confident it will successfully overturn it. He noted that the team's trademark registrations will remain valid while the case is appealed.
"We are confident we will prevail once again, and that the Trademark Trial and Appeal Board's divided ruling will be overturned on appeal. 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," Raskopf said in a statement.
In 1999, a panel ruled to cancel the trademarks after a 16-year battle with Native American groups. The decision was later overturned on a technicality after the courts decided that the plaintiffs were too old and should have filed their complaint soon after the Redskins registered their nickname in 1967.
"The evidence in the current claim is virtually identical to the evidence a federal judge decided was insufficient more than ten years ago. We expect the same ultimate outcome here," Raskopf said in his statement.
Sen. Maria Cantwell, D-Wash., told ESPN.com that she expects Wednesday's ruling to be upheld on appeal.
"This puts a big dent in their business model of trying to gain revenue from a disparaging term of slur," she said. "I find it very unlikely that someone is going to overrule the patent office on this. This is a huge decision by a federal agency."
Cantwell, with Senate Majority Leader Harry Reid, wrote a letter signed by 50 Democratic senators last month that encouraged a name change. She said that if the Redskins and the league refuse to change the name, there are many options available for the Senate, including perhaps ridding the league of its tax-exempt status.
Reid also applauded the decision.
"Daniel Snyder may be the last person in the world to realize this, but it's just a matter of time until he is forced to do the right thing and change the name," said Reid, who has said previously he will not attend Redskins home games until the team changes its name.
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 U.S. Patent Office has now restated the obvious truth that Native Americans, civil rights leaders, athletes, religious groups, state legislative bodies, Members of Congress and the president have all echoed: taxpayer resources cannot be used to help private companies profit off the promotion of dictionary defined racial slurs," said Oneida Indian Nation representative Ray Halbritter and National Congress of American Indians executive director Jackie Pata in a joint statement.
"If the most basic sense of morality, decency and civility has not yet convinced the Washington team and the NFL to stop using this hateful slur, then hopefully today's patent ruling will, if only because it imperils the ability of the team's billionaire owner to keep profiting off the denigration and dehumanization of Native Americans.
Without protection, any fan can produce and sell Washington Redskins gear without having to pay the league or the team for royalties and wouldn't be in violation of any law for doing so. NFL teams split merchandise royalties 31 ways -- the Dallas Cowboys have their own deal -- so league owners could see losing the trademark rights as a major negative.
"This is not a death blow, but it's a good jab," said Frank Vuono, who formerly headed up the NFL's retail operations before starting his own firm 16W Sports Marketing.
Vuono said that not only could merchandise be compromised, but if the Redskins one day lose their rights to the trademarks, non sponsors could try to use the marks to associate with the team without affiliation. That, Vuono said, would devalue the proposition of being an official sponsor.
The Redskins are an integral part of league sales. From April 1, 2012, to March 2013, the league said more jerseys of Redskins quarterback Robert Griffin III were sold than of any other player in a single year in NFL history.
"In a business like professional football, there is a huge amount of revenue in merchandising," Christine Farley, a law professor at American University who specializes in trademarks, told ABC News. "If pro football loses the ability to monopolize that market, that may convince them to change their name."
If the Redskins lose the rights to their trademarks, the question will be whether state and common laws would allow them to retain their exclusivity of use.
"The law is really unclear on this," said Sonia Katyal, the Joseph M. McLaughlin Professor of Law who specializes in intellectual property. "We haven't really had something like this where you have a team and so many other interested parties involved, so we're treading new ground."
Suzan Shown Harjo, one of the plaintiffs who testified at last year's hearing, said she was "thrilled and delighted'' with the decision.
Redskins owner Snyder, asked by reporters Wednesday for his reaction to the trademark decision, simply waved to reporters and did not comment.
Redskins wide receiver Santana Moss called the decision "sad."
"It's sad, but like I said before, it's something that I can't control, so I'm going to leave it alone," Moss told reporters. "I hope the best for it because I feel like, as a Redskin, I don't think that we wore this name trying to bring any harm to anybody. A lot of us out here as players didn't know of the history or nothing like that, and we've been kind of privileged to get a little bit of insight on some of the history and just with that you still don't know enough."
Griffin said he and his teammates would try to keep their focus on the field.
"Our jobs as players is to focus on what we can on this field day in and day out and let the league take care of that stuff. And when it's the right time, then we can voice whatever it is that we know about the situation," he said.
Officials the NFL could not immediately be reached for comment.
Meanwhile, Miami University in Ohio, which also once used the Redskins nickname, used Wednesday's ruling as an opportunity to tweet to the NFL team.
Hey @Redskins, if you need help finding a new name just let us know. #RedHawks
- Miami Athletics (@MiamiRedHawks) June 18, 2014ESPN.com Redskins reporter John Keim and The Associated Press contributed to this report.
Patent Office Cancels Redskins' Trademark
Darren Rovell discusses the United States Patent and Trademark Office's cancellation of the Washington Redskins trademark registration for being "disparaging of Native Americans'' and what that means financially for the NFL and team owner Dan Snyder.
Ramifications Of Redskins' Trademark Cancellation
ESPN legal analyst Roger Cossack discusses the consequences of the U.S. Patent Office's ruling that the Redskins name is "disparaging of Native Americans'' and that the team's federal trademarks for the name must be canceled.