The anonymous artist spent two years battling card company Full Colour Black in the courts over the copyright to “Flower Thrower”.
Banksy painted “Flower Thrower” on the walls of the West Bank in Jerusalem.
However, in a move that could set a precedent for his other artworks, judges ruled he can not claim an EU trademark for the piece because “he cannot be identified as the unquestionable owner of such works as his identity is hidden”, the MailOnline reported.
Banksy had previously claimed that “copyright was for losers”, and in his 2006 book “Wall and Peace” had made his artwork freely downloadable, promising to never commercialise his works.
Last October he set up a shop to sell his artwork in Croydon and claimed the sole purpose of the venture was to “fulfil his trademark obligations”.
The judges said his intention to “circumnavigate the law” rather than commercialise his goods was in bad faith.
The panel of judges, part of the European Union Intellectual Property Office, said: “Banksy has chosen to remain anonymous and for the most part to paint graffiti on other people’s property without their permission rather than to paint it on canvases or his own property.
“He has also chosen to be very vocal regarding his disdain for intellectual property rights.
“It must be pointed out that another factor worthy of consideration is that he cannot be identified as the unquestionable owner of such works as his identity is hidden; it further cannot be established without question that the artist holds any copyrights to graffiti.”
Banksy’s identity has been subject to speculation for years. Earlier this month former Art Attack presenter Neil Buchanan denied he was Banksy after a social media rumour gained traction.
The rumour, which did the rounds on Twitter, suggested Banksy’s art had popped up in locations where Mr Buchanan had performed music. Mr Buchanan became a familiar face in many households in the UK between 1990 and 2007 through his role on ITV’s Art Attack.
Banksy, meanwhile, recently sprayed the inside of a London Underground train carriage with messages about the spread of coronavirus, before it was removed by Transport for London.