Liverpool Football Club's bid to trademark the word Liverpool in products and services has failed due to its "geographical significance".
The club submitted the request, which has been rejected by the Intellectual Property Office, to protect fans from fake goods.
A row developed after local clubs also using the city's name expressed concerns.
Liverpool FC said it would not be appealing against the decision.
The bid was rejected due to the city's ubiquity, in contrast with Chelsea and Tottenham Hotspur, who were successful in similar bids.
The Spirit of Shankly supporters group welcomed the decision and said the word Liverpool should not become the property of the football club's owners.
A spokesman said: "It belongs to the city of Liverpool and its people.
"We should all be allowed to use it freely, however we see fit, without fear of legal letters dropping through our doors."
Liverpool Walton MP Dan Carden said he was "delighted" with the decision, which he said the club had accepted "gracefully".
He added: "I know this news will be welcomed by independent traders, local football clubs and others who contribute so much to our fan culture."
City of Liverpool FC, which previously said a trademark would be "a massive gaffe", maintained their position that "no private business should own the name of any city in any context".
Liverpool mayor Joe Anderson said the club's importance to the city was "without question".
Liverpool FC chief executive Peter Moore said: "It should be stressed that our application was put forward in good faith and with the sole aim of protecting and furthering the best interests of the club and its supporters.
"Nevertheless, we accept the decision and the spirit in which it has been made.
"I would also like to take the opportunity to reiterate our thanks to all those who engaged with us throughout this process, most notably independent traders and local football clubs."