UPDATE 2-US appeals court says no to Teva's generic Evista

* Appeals court upholds ban on selling generic Evista

* Evista a big seller for Lilly (Adds comment from Lilly, details of patents and case)

WASHINGTON, Sept 1 (Reuters) - Eli Lilly & Co (LLY.N) won a patent battle protecting its osteoporosis drug Evista on Wednesday, as an appeals court declined to toss out a permanent injunction preventing production of a generic copy of the medicine.

The U.S. Court of Appeals for the Federal Circuit ruled that a lower court was correct in banning Teva Pharmaceuticals Ltd (TEVA.O) (TEVA.TA) from making a generic Evista and that the Lilly patents were valid. They expire in March 2014, the company said.

"We are pleased with today's ruling from the Court of Appeals regarding Evista's method-of-use patents and believe that the court fairly applied long-standing patent law principles," said Robert Armitage, Lilly's general counsel.

But it also upheld a decision by the district court in Indiana that portions -- or claims -- in two other Lilly patents related to Evista were invalid.

Lilly's Evista, which had sales of $259.5 million in the second quarter of 2010, is used to treat osteoporosis in post-menopausal women.

The case is Eli Lilly and Co v. Teva Pharmaceuticals USA, Inc. No. 2010-1005, 1033. (Reporting by Diane Bartz, editing by Gerald E. McCormick)