Starbucks vs. Xingbake

US coffee shop chain Starbucks Corporation recently won a 2-year legal battle on trademark infringement and unfair competition against a Shanghai cafe which registered and used its business name "Xingbake", Chinese translation of the mark Starbucks.

Seattle-based Starbucks entered the Taiwanese market in 1998 and authorize Uni-President Group, a Taiwanese firm, to manage its coffee houses in Taiwan. From 1996, Starbucks obtained trademark registrations for the mark "Starbucks" and the Chinese translation of the mark, "Xingbake", as well as the logo of Starbucks in Mainland China. Starbucks and Uni-President Group set up a joint venture company, Shanghai Starbucks Holding Pte Ltd, in China in 1999.

A Shanghai cafe registered its company name as "Xingbake" (pronounced Sin-Bar-Ker) in Shanghai in 1999 and began setting up its coffee houses later on.

One of the coffee shops of Shanghai Xingbake in the city's downtown Nanjing Road has a design similar to that of Starbucks: a round logo with green characters against white background Chinese characters reading "Xing Ba Ke" on the top and Chinese characters "Ka Fei Guan (meaning Café)" at the bottom.

In China, people generally refer Starbucks as "Xingbake". In Chinese, "xing" means "star" and "ba-ke" could easily pass off as the phonetic equivalent of "buck".

In December 2003, Starbucks sued Shanghai Xingbake on the grounds of trademark infringement and unfair competition.

In its judgment issued on December 31, 2005, the Shanghai No.2 Immediate People's Court decided that "Starbucks" and "Xingbake" qualified as "well-known marks" in China due to their extensive advertising and use. The court found that Starbucks started to use the "Xingbake" mark earlier than Shanghai Xingbake and considered that it was clearly a bad-faith attempt by the defendant to ride on the reputation of the mark by registering the company name in question, and using a similar logo. The court thus held that Shanghai Xingbake had infringed Starbucks' well-known marks and such an act was an unfair-competition practice. The defendant was ordered to stop using its company name and to pay 500,000 yuan (US$62,500) in compensation to Starbucks.

According to the media, the Shanghai Xingbake was considering launching an appeal.