UPDATE 1-Tate & Lyle says US ITC upholds sucralose ruling

* Tate loses patent-infringement case

* Tate shares fall 2.8 percent

(Adds further details, analyst, shares)

LONDON, April 7 (Reuters) - Sugar and sweetener group Tate & Lyle (TATE.L) on Tuesday said the U.S. International Trade Commission (ITC) upheld its initial judgement which ruled against the British group in a sucralose patent-infringement case.

The full six-person ITC in Washington late Monday upheld the ruling given in September 2008 over Tate's case against certain manufacturers of Chinese sucralose, the zero-calorie sweetener.

Around a fifth of Tate's profits are made from sucralose, which is sold under the Splenda brand name, and the group had brought the case against the Chinese manufacturers to test its patents on the super sweetener.

Although the ruling was largely expected, Tate's shares dipped 2.8 percent to 281 pence by 0805 GMT as increased competition in the sucralose market is expected to hit Tate's profit margins as Chinese makers build up their capacity.

"As expected, Tate has lost its patent infringement case at the U.S. ITC... this in our view will be a green light for Chinese producers to increase capacity," said Panmure Gordon analyst Graham Jones.

He reiterated his sell recommendation on the stock and says that sucralose will be a drag on future profits growth.

Tate said it will review the ITC's determination in detail and evaluate its possible options in respect of any further appeals through the U.S. Federal Circuit Court of Appeals. (Reporting by David Jones; Editing by Hans Peters)