Apple confirmed the lawsuit but declined to comment further.
The consumer device giant -- a market leader in both smartphones and tablets -- has had to face some roadblocks in China, which is a key growth region for the company. Earlier this year, fake Apple stores were discovered in southwestern Yunnan province.
The company is also constantly battling counterfeiters.
In the lawsuit over the use of the iPad name, the Intermediate People's Court in the southern boomtown of Shenzhen rejected Apple's complaint against Proview Technology (Shenzhen). Proview, it said, lawfully registered the iPad trademark as long ago as 2000 for products in a number of countries including China, the Southern Metropolis Daily newspaper reported, citing court documents.
Apple, which launched its iPad tablet computer some years after that, was initially panned by many on Twitter and other online forums for picking a name that was synonymous with a woman's hygiene product.
But the jokes died after the roaring success of the product that no other company has been able to beat in sales.
The right to use the iPad name in China is crucial for Apple, where the company is in the process of opening more stores. Executives have said they have just scratched the surface in China in terms of sales.
Proview Technology (Shenzhen), and the Shenzhen court were not immediately available for comment when contacted by Reuters.
Proview was also taking legal action, seeking 10 billion yuan in compensation from Apple for copyright infringement, Caixin Online reported in October.