A judge said last week that a lawsuit filed in 2012 can go forward based on the Indian Arts and Crafts Act.

Urban Outfitters / Via Court Filings Navajo Hipster Panty.

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