Ranbaxy Laboratories has settled a patent dispute with Takeda Pharmaceutical Co, allowing it to sell a generic of the diabetes blockbuter Actos in the USA.

The agreement means that the Indian drugmaker can start marketing its copycat version of Actos (pioglitazone) on August 17, 2012, “or earlier under certain circumstances”. No terms of the settlement, which gives Ranbaxy a non-exclusive royalty-free licence, have been disclosed.

The deal settles a legal battle begun in 2003 when Takeda sued Ranbaxy, Watson Pharmaceuticals and Mylan Laboratories. The loss of patent protection in the USA will be a major blow for the Japanese drugmaker as Actos had US sales of about $3.4 billion in 2009.

However the Gurgaon-based company’s drug will have to compete with Watson’s generic version of Actos, as the US firm reached a settlement with Takeda last week to sell its product from August 2012