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A Shanghai court ordered Shanghai Xingbake Coffee to pay 500 000 yuan ($62 500) in damages after it judged the company had infringed upon the Seattle-based group's trademark, the China Daily reported.
Starbucks, which has 8 700 retail outlets worldwide and about 300 on the Chinese mainland, as well as in Hong Kong and Taiwan, alleged that "Xingbake" sounded phonetically similar to the pronounciation of "Starbucks" in Chinese.
Sound the same
"Xing" means star in Chinese and "bake" somewhat sounds like bucks, making it a popular name for the local chain, which has 38 outlets in Shanghai.
Xingbake's green and white logo is also very similar to the Starbucks design.
The Chinese company officially registered its name in January 2000, before Starbucks opened its first store in Shanghai but after the US group opened its first shop in China - in Beijing - in 1999.
Starbucks sued Xingbake in December 2003.
Like many similar copyright disputes in China, Xingbake claimed it never violated the Starbucks trademark or copied the design of the logo.
However Lu Guoqiang, chief judge in the case at the Shanghai No 2 Intermediate People's Court, found that Xingbake did translate to Starbucks in Chinese.
Use in English and Chinese
The court ruled on Saturday that Starbucks, named after the character in the classic 19th-century American novel Moby Dick, was entitled to use the name in English and Chinese, as well as have sole use to the design of its logo.
Meanwhile, high-end British apparel maker Alfred Dunhill has won a separate copyright suit against the Beijing Wangshi Baili Commercial, the China Daily reported.
The Beijing High People's Court said a department store in Beijing run by Wangshi had been unlawfully selling wallets, belts and ties with Dunhill's name on them.
Despite repeated pledges by Beijing to stamp out trademark infringement, rampant violations are an increasingly bitter source of friction between China and the European Union and the United States, its two largest trading partners.
The ease with which clothing and apparel designs can be filched make the industry the most commonly targeted by copycats but similar abuses occur in China across a wide range of businesses.
Over half of the more than 100 million seized counterfeit articles entering Europe in 2004 originated in China, including fake medications, food, cigarettes and even Rolls Royce aircraft engine parts, according to the EU.
Pirated movies and music are also available across China for a fraction of the genuine articles' selling price.
General Motors of the United States, Japan's Honda, French sports apparel maker Lacoste and cognac maker Moet Hennessy have all been involved in trademark suits in China.
