On June 2, the No.2 Beijing Intermediate People's Court announced that a previous decision in 2004, by China's State Intellectual Property Office, which ruled that Chinese drug makers could produce sildenafil citrate, the active ingredient of the drug, should not stand.

The appeals commission of the State Intellectual Property Office was not immiediately available for comment.

But the director of Guangzhou Welman Pharmaceutical Co., Ltd, one of 12 domestic companies, say they are unlikely to appeal the decision and are now, turning their attention to how best to proceed.

Sun Mingjie, who has paid close attention to the law suit, said Pfizer had won a key battle, and admitted that, even if an appeal was launched and taken to a higher court, it was very likely that the same judgment would be reached.

The move indicates China's resolve to strike hard on criticism that it is not doing enough to support intellectual property, as part of its obligations of WTO secession.

And this means, dozens of Chinese drug makers, who have the capability to easily produce cheaper versions of the drug, will have to face huge losses.

In November 2001, the State Intellectual Property Office granted Pfizer with Viagra patent. But on the day that Pfizer received the authorized patent, Pan Huaping, and later another 12 Chinese domestic drug makers appealed against the patent, because of "insufficient publicity in the patent introduction book".

Their appeal was backed by State Intellectual Office and on July 5, 2004, the state administration announced the invalidation of Viagra patent.

Following the announcement, 17 Chinese domestic drug makers joined together to mass produce an equivalent drug to Viagra to treat ED (Erectile Dysfunction).

But on November 28, 2004, just two months later, Pfizer protested and appealed for a resumption of its patent right.

The long-awaited result finally arrived on June 2, but to most of the alliance's surprise, the Beijing court supported Pfizer's bid to enable them to be sole producers of the drug.

The estimated market of ED drugs in China is valued at RMB 60 bln (USD 7.5 bln) to 100 bln (USD 12.5 bln), and according to Xinhua, the number of Viagra prescriptions in 2004 reached 500, 000.

To strive for a profitable market share of ED drugs, dozens of companies in China injected huge sums in researching ED drugs, and some companies claimed they had even completed clinical research.

They will not have the right to produce drugs similar to Viagra until 2014, the year that the patent protection period expires.

According to state media, Pfizer spokesman Paul Fitzhenry said the ruling will benefit New York-based Pfizer because it may mean better patent protection for the 20 drugs it plans to start selling in China by 2010.