Nike Inc (NKE  ) encountered a significant legal hurdle in its ongoing efforts to trademark the term "footware" for tech-related products, following a ruling by the General Court of the European Union.

This decision came after a challenge from German competitor Puma SE (PMMAF  ).

The EU court, the bloc's second-highest judicial authority, not only rejected Nike's trademark application but also mandated that the U.S. sportswear giant cover the legal expenses incurred by Puma.

The court's judgment is based on concerns that the term "footware" might be confused with "footwear," a generic term that cannot be trademarked, The Wall Street Journal reported.

Nike's intent with the "footware" trademark was to bridge concepts of "foot" with "software" or "hardware," aiming to label a range of tech-integrated products.

However, the court sided with Puma's argument that the term could easily be misinterpreted as "footwear" by consumers, thereby categorizing it as merely descriptive rather than distinctive.

This ruling follows various legal challenges against Nike's trademark attempts in multiple jurisdictions.

While Nike previously succeeded in securing the trademark in the U.K. following a 2021 ruling, its efforts faced a setback in the U.S. earlier this year when the Trademark Trial and Appeal Board sided with San Antonio Shoemakers, who argued against the trademark on similar grounds.

Nike has the option to escalate the case to the European Court of Justice, the EU's highest court, should it choose to continue pursuing the trademark.

Nike stock has lost more than 12% in the last 12 months. Investors can gain exposure to the stock via Vanguard Consumer Discretionary ETF (VCR  ) and Fidelity MSCI Consumer Discretionary Index ETF (FDIS  ).

Price Action: NKE shares are trading higher by 0.53% at $94.18 in premarket at last check Thursday.