Last year, the UTV Media-owned TalkSport complained to the Trust that 5 Live was failing to meet the requirement in its service licence for 75% of its output to consist of news.
TalkSport claimed that only 45-56% of 5 Live's output was news, with many items falling outside of the remit, such as "entertainment-based interviews" with the likes of comedian Alexander Armstrong and listener-generated features.
The commercial station escalated the complaint to the Trust after being dissatisfied with the response from BBC management.
Published today, a report by the Trust's General Appeals Panel found that 5 Live was "compliant with its commitment that news represents around three-quarters of output each year".
The Trust also rejected TalkSport's complaint that 5 Live's sports coverage was not meeting the commitment in its service licence to cover minority and secondary sports.
However, the governing body noted that the complaint "raises some significant and valid questions about what constitutes news on 5 Live and how broadly an individual 'news' programme on 5 Live should go in its delivery of news".
The Trust also said that the current service licence for 5 Live "does not provide clear commitments as to the frequency and range of coverage of minority and secondary sports".
Next week, the Trust is scheduled to launch a review of 5 Live and 5 Live Sports Extra, which will focus on "addressing these issues and providing greater clarity".
The review will evaluate options for imposing "a more nuanced method of monitoring the proportion of news output" on 5 Live compared to the current system, which counts the whole of Richard Bacon's afternoon show as news. It will further investigate the coverage of minority and secondary sports on 5 Live.
Scott Taunton, managing director of UTV Media, said: "The appeal findings leave us in no doubt that the BBC Trust has major questions about 5 Live's provision of continuous news and a home for minority sports, and that it wants to see - through the licence review - a significant tightening of its remit in these areas.
"I'm particularly pleased that the BBC Trust has recognised the potential flaws in BBC management's methodology for measuring the percentage of 5 Live's output which is news."
He added: "It's clear to us that the BBC should set the standard for news, rather than adopting a broad definition which includes interviews with celebrities or trivial listener anecdotes. It's also good to see that the BBC Trust has committed to look at the mix of sports on 5 Live, including whether 5 Live is doing enough to support minority sports.
"The technical detail of our complaint was always secondary to these broader issues about 5 Live's remit and performance and I'm pleased that the BBC Trust has agreed to address the substantive points we raised in the course of its service review."
This is not the first time that TalkSport and 5 Live have clashed, as in October 2009 the Trust "partially upheld" a complaint from the commercial station about the way in which the BBC Executive secured radio rights to FA Cup coverage. After an investigation, it was found that the BBC had breached its own competition guidelines when acquiring the rights and had also failed to properly assess their value.
Last month, the Trust gave a "clean bill of health" to the BBC's sports rights team, but Taunton claimed that the verdict failed to address the BBC's overall dominance in the sports radio market.