Hallam FC - which plays at Sandygate, the world’s oldest football ground - had challenged a decision made in 2016 to allow the organisers of the Youdan Trophy permission to register the title as a trademark.
The club insisted the youth soccer competition, founded by former referees Jock Waugh and Keith Hackett of the website You Are The Ref, infringed its rights.
But the Government's Intellectual Property Office upheld its earlier ruling, meaning Hallam FC faces a bill for costs running into thousands of pounds.
There are no further routes of appeal through the IPO. But it is understood the club could still take further legal action if it wishes.
One of the key objections was the day the trademark was applied for was incorrectly calculated. But, in his ruling, the IPO's appointed barrister Phillip Johnson said the error was 'not material' and would not have affected the original findings.
The tournament commemorates the world’s first-ever football contest, the Football Challenge Cup, which pre-dates the FA Cup and was played once in 1867.
A winner’s trophy - the Youdan Cup - was presented to Hallam by Thomas Youdan Esq. Hallam FC awards a Youdan Trophy to its player of the year.
Mr Johnson said: "Neither the possession of the trophy, nor the fact Hallam FC is the one and only winner of the Youdan Cup, and known to be so, enables them to prevent anyone using those words or anything colourably similar under the law of passing off."
He also rejected submissions around the modern tournament's use of the words 'Est 1867'.
Mr Waugh said: "Naturally we are delighted to have our position vindicated. The original decision was, in our view, clearly correct. It was time-consuming, costly and distracting to have to deal with a long-drawn out appeal."
He said there would be a renewed focus on expanding the Youdan Trophy. "We hope and believe that the people of Sheffield – the true birthplace and home of football – will share our vision.”
Mr Johnson awarded costs of £4,500 against Hallam FC, but the competition's organisers have 14 days to ask for a different sum in writing.