The Ukulele Orchestra of Great Britain (UOGB) said their reputation could be tarnished by the German-based United Kingdom Ukulele Orchestra (UKUO).
The UOGB had sought a High Court injunction against the rival group of British players ahead of the UKUO's upcoming UK tour.
But the judge ruled in favour of the UKUO, saying it was not in competition.
Judge Richard Hacon agreed that, as the group had been performing in Germany for some years, the UOGB should have acted sooner.
Both orchestras perform their take on contemporary pop songs.
The UOGB, whose members dress like a traditional orchestra and sing and tell jokes on stage, have been performing for more than 25 years, released records and have appeared on television.
The British group took action ahead of the UKUO's first UK tour, which begins on 15 October in Lincoln.
"We have issued proceedings against a German-based musical group for registered trademark infringement. However the court didn't grant the injunction," UOGB founder George Hinchliffe told the BBC at the London court.
He added: "It's really not a policy of ours to comment upon litigation while it's still going through the courts. And we're a bit busy at the moment as we're just about to start a tour of China."
The court heard the UKUO performed in English and had a "certain English humour" which was aimed at the continental market and Germany in particular.
"We are very pleased with the outcome," said Peter Moss, UKUO musical director.
"Our view has always been that we never, ever wanted to have competition with the other side. We wish them well. We hope people will now come to see us play."
The UOGB said they was considering further legal action to protect their "name and reputation".

Gino Asquith was born on 9 November 2014, but died three days later.
His mother, Sarah Ellis, had been sent home from the hospital two days earlier as there were no free beds.
She was seen by eight medics before having an emergency caesarean after they failed to spot signs of distress.
Recording a verdict of death by misadventure Coroner Oliver Longstaff said there had been four missed chances to provide medical input.
The inquest heard that after Ms Ellis was turned away by Calderdale Royal Hospital (CRH), in Halifax, she went to Huddersfield Birthing Centre, but was sent home on 8 November as her labour was not in an advanced stage.
The following day she went back to CRH as she could no longer feel her baby moving but was told she was not dilated enough and was left in the Maternity Assessment Unit for six hours.
She later underwent an emergency Caesarean section after being seen by a consultant. Gino had to be resuscitated twice after his birth.
Mr Longtsaff said: "At the very least the delays in Gino being delivered made the chance of him being born alive significantly reduced."
Speaking after the inquest, Ms Ellis and her partner Adam Asquith said: "Words cannot explain what we have been through in losing our first child together in this terrible way.
"It is hard to accept that the delays we faced and the failure to pick up signs that Gino was in distress led to his death.
"We can only hope that by speaking out we will ensure lessons are learned and that mothers and their babies are in the best possible hands when they are at their most vulnerable."
Calderdale and Huddersfield NHS Foundation Trust admitted liability for Gino's death in a civil case ahead of the inquest.
A British ukulele group has lost its trademark infringement battle against a rival band over its name.
[NEXT_CONCEPT]
A series of delays and missed opportunities to provide medical intervention contributed to the death of a baby boy at Calderdale Royal Hospital, a coroner has said.