Shanghai Court Rejects iPad Injunction Request

Apple won’t have to yank its iPad off store shelves overseas after all — at least not in Shanghai, where Reuters reports a local court has rejected a request by China-based Proview Technology to put the kibosh on iPad sales in the city.

The court’s decision marks a significant victory for Apple after recent reports that Chinese authorities were seizing and confiscating iPads from sale. Apple has three stores in Shanghai, and it’s one of the company’s largest markets. Had the court granted Proview’s request, it would have crippled iPad sales in the country.

Proview had accused Apple of trademark infringement, claiming it (Proview) has the right to the “iPad” name after selling an unrelated product dubbed “I-PAD” in China for years. Apple spent $55,000 to buy the European rights to the name from Proview’s Europe-based parent company a few years ago, but Proview maintains it owns the trademark in China regardless.

Apple is not in the clear yet. While the Shanghai court denied Proview’s injunction request after a hearing, it is only suspending the trademark infringement case until a higher court issues a ruling.

A lawyer with the firm representing Apple had argued that the Shanghai court should rule in Apple’s favor because Proview “has no product, no markets, no customers and no suppliers.” By contrast, the lawyer argued Apple China sales were significant, that “[its] fans line up to buy Apple products,” and that a ban on iPad sales would “hurt China’s national interest.”

Next up, a decision about Apple’s appeal in a prior Shenzen court decision that favored Proview, and the stakes couldn’t be higher: A court in southern China city Huizhou ruled Feb. 17 that resellers must stop selling iPads in the country.

“It’s a great help to Apple by giving it some breathing space,” said China-based lawyer Ren Wenfeng (not involved in the Apple-Proview wrangle) of the Shanghai verdict. But he’s less certain Apple’s going to win the long race. “…[The] crucial thing will be the ruling by the Guangdong higher court,” he says. If Apple loses, it could pay dearly — in the vincinity of $1.6 billion, if Proview has its way in court.

The Guangdong hearing is scheduled for Feb. 29.

Matt Peckham writes for TIME and PCWorld. You can find him on Twitter, Facebook, or Google+.