## Facts

- Starbucks Corporation owned registered trademarks in China for “STARBUCKS,” related marks, and the Chinese transliteration “星巴克” (registered Dec. 28, 1999), and operated Starbucks-branded coffee shops in China through a Shanghai joint venture.
- A local company obtained pre-approval for the enterprise name “上海星巴克咖啡有限公司” in Oct. 1999 and was established in Mar. 2000; it operated coffee shops, including a Nanjing Road branch.
- The local company used “星巴克/Starbucks” in its enterprise name and on storefront/service signage in connection with coffee shop services.
- The local company also used a green-and-white circular logo alleged to be confusingly similar to Starbucks’ circular logo.
- Starbucks and its Shanghai joint venture sued in 2003 for trademark infringement and unfair competition based on the defendants’ name and logo use for identical services.
- The Shanghai No. 2 Intermediate People’s Court ruled for Starbucks (Dec. 2005), recognizing “STARBUCKS” and “星巴克” as well-known marks and ordering cessation, a name change, and damages.
- Defendants appealed, arguing priority based on enterprise-name approval and lawful use of the registered enterprise name.

## Issues

1. Whether Starbucks’ trademark rights in “STARBUCKS” and “星巴克,” including well-known status, had priority over defendants’ asserted enterprise-name rights containing “星巴克.”
2. Whether defendants’ use of “星巴克/Starbucks” and a similar logo for coffee shop services constituted trademark infringement and unfair competition due to likely consumer confusion and bad faith.

## Decision

- The Shanghai Municipality Higher People’s Court affirmed the judgment for Starbucks.
- The court held that Starbucks’ right to the registered trademark “星巴克” accrued before defendants acquired enterprise-name rights (which arise upon establishment, not pre-approval).
- The court found infringement based on unauthorized use of “星巴克/Starbucks” and confusingly similar indicia for identical services.
- The court found unfair competition based on misappropriation of reputation and conduct likely to mislead consumers into believing an affiliation with Starbucks.
- The court ordered defendants to stop using “星巴克/Starbucks” and the look-alike logo, change the enterprise name to remove “星巴克,” and pay damages (reported around RMB 500,000).

## Legal Principles

- Enterprise-name registration does not confer a right to use a name in commerce where that use conflicts with a prior registered trademark and is likely to cause confusion.
- For enterprise-name priority analysis, relevant rights arise upon the enterprise’s establishment; pre-approval of a name does not establish enforceable name rights.
- Well-known trademark recognition supports broader protection against confusing use, including use within an enterprise name and related commercial signage for the same services.
- Use of another’s mark (or a closely similar mark or logo) for identical services that creates a likelihood of confusion constitutes trademark infringement.
- Bad-faith adoption of a well-known mark to benefit from its goodwill, including “passing off” through similar names and trade dress, supports liability for unfair competition and injunctive relief, including compelled name modification.

## Conclusion

The appellate court held that Starbucks’ earlier trademark rights and well-known mark protection prevailed over a later-established enterprise name incorporating “星巴克,” and it imposed injunctive and monetary remedies for confusing use and unfair competition in coffee shop services.


Starbucks Corp. v. Shanghai Starbucks Cafe Co., Ltd., (Shanghai Mun. Higher People’s Ct. 2006)