A major Indian drugs company has lost a legal battle preventing it from selling a popular antibiotic patented by Bayer in the United States.

Dr Reddy's Laboratories wants to produce a cheap generic version of a drug called Cipro, which is used to treat anthrax and other bacterial infections.

But the US Federal Court says this would breach the copyright rules as the patent to Cipro is still owned by Bayer.

The patent for Cipro is not due to expire until the end of 2003.

Several companies, led by Schein Pharmaceutical, Mylan Laboratories and Dr Reddy's had challenged the validity of the Bayer patent.

US market denied

Dr Reddy's, India's only US-listed drugmaker, had previously said it had received approval from the US Food and Drug Administration to launch a generic version of Cipro.

The court judgement means that Dr Reddy's will no longer be able to launch the drug.

Like other Indian drugmakers, Dr Reddy's is focusing on the US market for drugs no longer covered by patents.

Margins in the US generics market are three times higher than margins in India, which has some of the lowest drug prices in the world.