Navajo Hipster Panty.

Urban Outfitters / Via Court Filings

Urban Outfitters is frequently criticized for making offensive clothing and for ripping off the work of independent designers without much in the way of consequences. But it may have picked the wrong fight with the Navajo Nation.

Urban Outfitters and the group have been locked in a legal battle since February 2012, when the Navajo Nation sued Urban for its use of "Navajo" and the misspelled "Navaho" on the retailer's flasks, underwear and more. It accused Urban of trademark infringement and of violating a law known as the Indian Arts and Crafts Act, which protects Native American-made goods.

Urban has pulled out a number of defenses, including the idea that tribal names are often used "as indicators of a fashion style or trend," but a judge said last week that the Navajo Nation has standing to keep pursuing the suit under the Act.

It's a blow for Urban Outfitters, which could now see the protracted case go to trial. It's unclear how much money the Navajo Nation is seeking. Lawyers for the group and the retailer didn't return requests for comment.

"Title Unknown Techno Navajo Quilt Oversized Crop Tee"

Urban Outfitters / Via Court Filings

The Indian Arts and Crafts Act, enacted in 1935 and amended in 1990, makes it illegal to falsely represent products as Native American-made if they're not. The Navajo Nation raised "sufficient evidence to raise jury questions on the issues of consumer confusion and deception" with Urban Outfitters' Navajo-labeled goods, the judge in the case wrote on Dec. 21.

Urban Outfitters' main defense throughout the litigation has been that "Navajo" is a generic term, and that its customers didn't associate items like its "Navajo Print Fabric Wrapped Flask" with the Navajo Nation anyway. Given the controversy began in 2011 with some Native Americans complaining that the Navajo name was being used insensitively, it can make for awkward reading:

"Just as the term 'Light Beer' is generic for a type of beer that is light in
body or taste or low in alcoholic and caloric content, 'Navajo' is today a generic descriptor for a particular category of design and style," lawyers for Urban Outfitters wrote in an April 2012 court filing.

An $18 "Navajo Print Fabric Wrapped Flask"

Urban Outfitters / Via Court Documents

A year later, Urban Outfitters filed photographs of other retailers with Native American prints in their stores, saying the fashion industry as a whole started "using the term 'navajo' to identify a particular type of southwestern Indian design and/or fashion that was originally influenced and/or inspired by the designs of Navajo Indians."

The company went on: "Just as FRENCH on wine and FLORIDA on grapefruit are descriptive, the term NAVAJO on textile products, including for example rugs and blankets, is not capable of protection."

The Navajo Nation, for its part, has contended that it has been known by the name Navajo since 1849, and that its Navajo Arts and Crafts Enterprise has marketed clothes, housewares and jewelry under the Navajo name since at least 1943. It has more than 300,000 members and owns a semi-autonomous territory that touches Arizona, Utah and New Mexico.

Urban, which also owns Free People and Anthropologie, also hired a trademark infringement expert, for $415 an hour, to research the use of the word "Navajo" in fashion and other industries. In an April court filing, the expert, Robert Frank, noted it's "quite possible that those in the printing and publishing industry, when hearing the word 'Navajo' do not think of the Navajo Nation but instead think of the Navajo paper manufactured by Mohawk Mills." He also offered a paint color called "Navajo White" and Jack Rogers "Navajo" sandals as other common associations.

Last year, the retailer cited a survey showing only 2.8% of its consumers mistakenly believed the Navajo products were, in fact, made by Navajo People. It added: "There can be no meaningful confusion that Defendant, a well-known mass retailer of lifestyle fashion items to a young urban demographic, was peddling Indian arts and crafts on its website."

The Navajo Nation said that it has sold more than $500 million worth of Navajo-branded goods. The group filed the lawsuit months after sending a cease-and-desist letter to Urban Outfitters, after which the company removed the offending product names from its website. The lawsuit alleges that Navajo-branded items were still being sold at Free People and in stores after that.

The group alleges it has lost sales because of Urban Outfitters' merchandise, and that the "imitation products have driven down prices of Authentic Indian products, forcing the Navajo Nation and American Indian People to offer and garner revenues for authentic products at lower prices."