So within the CDATA and assuming that psd_name is java string object, try executing the replaceAll method on the string.
update odf_ca_zc_cogs
set name = '${psd_name.replaceAll("'","''")}'
where ODF_PARENT_ID = ${gel_objectInstanceId}
If the jelly complains about the replaceAll expresssion, you might have to do the replace into a new string via core:set.
V/r,
Gene