The court also said there was "no law or regulation" which prohibited Apple from continuing sales of the iPad.
"The court has decided to reject the provisional injunction and terminate the litigation of the case."
"It's a great help to Apple by giving it some breathing space," said Ren Wenfeng, a lawyer at Guo Ce Law Office who is not involved in the dispute.
"But it's not clear whether Apple will eventually win the trademark infringement case in China, as the crucial thing will be the ruling by the Guangdong higher court." That hearing is set for February 29.
Reports say Proview, which makes computer monitors, registered the name "iPad" in China in 2000, years before Apple released its tablet. Apple acquired worldwide rights to the name in 2009. The Chinese tech company has threatened to continue the battle in United States courts.
"This is a wrong decision," Roger Xie, Proview's lawyer, said. "We will submit an application for the court to reconsider its decision."
An injunction on iPad sales in Shanghai would have forced the company to remove the iPad from its three stores in Shanghai, one of its biggest markets.
- AAP