The dispute in China's booming market for gourmet coffee highlights the country's struggle to mediate trademark disputes, a new concept for the communist legal system.
A Shanghai court ordered Shanghai Xingbake Cafe Corp. Ltd. to stop using the name Xingbake, the name used in Chinese by Starbucks Corp., the Shanghai Daily and China Daily newspapers said. Xing, pronounced "shing," means star in Chinese, and bake, or "bah kuh," sounds like bucks.
The Shanghai No. 2 Intermediate People's Court said the Shanghai firm engaged in "illegitimate competition" by using Starbucks' Chinese name and imitating the design of its cafes, the China Daily said.
The court said Starbucks was entitled to use its name in English and Chinese, as well as have sole use to the design of its logo.
Judge Lu Guoqiang's ruling Saturday also ordered Shanghai Xingbake to pay Starbucks 500,000 yuan (US$62,000) in damages, the reports said.
Starbucks opened its first cafe in China in 1999. It later caused a stir by adding outlets in Beijing's imperial palace and at the Great Wall, north of the Chinese capital.
Foreign rivals and Chinese upstarts have jumped into the market to compete for well-heeled customers who pay up to 50 yuan (US$6) for a cup of coffee - more than the average Chinese worker makes in a day.
Starbucks sued Shanghai Xingbake in 2003.
The Shanghai coffee house argued that its name was valid because it was registered in 2000, before Starbucks applied for its own Chinese trademark.
Starbucks rejected that, saying its name and mermaid trademark were registered in China beginning in 1996.
The Shanghai Daily report Sunday said the Starbucks ruling was the first of its kind under a 2001 Chinese law meant to protect well-known international trademarks.
Meanwhile high-end British apparel maker Alfred Dunhill has won a separate copyright suit against the Beijing Wangshi Baili Commercial Co., 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.
The court ordered the Chinese department store to pay a 50,000 yuan fine.
Foreign companies have complained for years that the Chinese government is failing to stamp out piracy of copyrighted or trademarked goods.
The clothing and apparel industries are often the most commonly targeted sectors but copyright infringement occurs in China across a wide range of businesses, including entertainment, education, cars and even airplane parts.
More recently, Chinese companies have begun to turn to the courts to protect their own names. A Shanghai soft drink maker, Yaqing Industry and Trade Co., lost a lawsuit last January against The Coca Cola Co. and its local bottler over the name of a new beverage.
Yaqing claimed the characters for Coke's Qoo fruit drink - "Ku-er" in Chinese - were too close to those of Yaqing's Kuhai drink. But a Shanghai court ruled that the two names were different enough that consumers wouldn't confuse them.