Shares in Tate & Lyle plunged to a five-year low today on fears its company-changing Splenda sweetener is under worldwide attack from cheap Chinese copycats.

The latest 13% crash in the stock of the sugars giant will heap renewed pressure on its beleaguered chief executive Iain Ferguson, who only last week ditched his finance director after a string of profits warnings.

The fortunes of Tate soured further today after it admitted it had lost a major case to protect patents on its sucralose artificial sweeteners business used in low-fat sweetening by the likes of Coca-Cola and Pepsico and best known under the Splenda brand.

Last year Tate had taken four Chinese manufacturers and 18 distributors to the International Trade Commission in Washington DC. The UK sugars and commodities giant accused them of stealing Tate's technology in the manufacture of sucralose.

In a case that has cost Tate £9 million in legal costs, it accused the alleged pirates of infringing a "multi-layered patent portfolio" aimed at protecting Tate's interests.

Tate's suggestion has not only been that rival manufacturers would eat into its profits but also that the Chinese are set to flood the US market with old-technology, lower-quality sucralose.

However, ITC judge Charles Bullock ruled that Tate's patents have not been infringed. Tate has four months to reverse the decision in an appeal process before a final binding ITC judgment in January.

Analysts are warning this could severely dent Splenda, the business that was supposed to transform Tate.

"If the judges do not change their minds they will send a signal to potential sucralose manufacturers that Tate patents are not as strong as claimed by the group," said Nicolas Ceron of Numis Securities.

He forecast that a market awash with capacity will slash Tate's 45% sucralose profit margins.

Tate shares crashed 56p to 360p, further extending recent falls following last week's latest profits warning which cost the job of finance director John Nicholson, under pressure in the City after three shareholder shocks in 2007.

Licheng Wang, an executive of rival manufacturer Changzou Niutang, said: "We have made significant investment in our own research, development and manufacturing processes and we have significantly expanded our capacity to produce sucralose to meet the rising demands of our customers."