The 2010 trademark case between the University of South Carolina and the University of Southern California was not over the use of "USC." It was over the use of the interlocking "SC" letters as an athletic logo.
Southern California uses an interlocking block "SC" for its athletic teams, while South Carolina uses an interlocking script "SC," which was based on historical designs over a century old. Southern California argued that fans would be confused by a burgundy block SC and a garnet script SC. The University Archives provided documentation of the historical usage of the interlocking SC at the University of South Carolina, but Southern California won the case because in the 1980s the longstanding usage of "SC" and "South Carolina" to represent this university were dropped in favor of using "USC" (and "The USC"). The judge ruled we had "abandoned the mark." Carolina can still use the logo, it just can't be trademarked.