By rights, the battle shouldn't even be close.

On one side of the fight currently raging in Congress over legislation to strengthen American patent law is the generic drug industry -- the small number of American drug companies that make discount versions of brand-name drugs -- and no one else.

On the other side, the lobbyists and trade associations are lined up three rows deep.

The National Association of Manufacturers, the Chemical Manufacturers Association, the U.S. Chamber of Commerce, the Industrial Biotechnology Association and just about everyone else who either holds patents or has an economic interest in their protection has weighed in on behalf of patent legislation that proponents say is long overdue.

Yet despite the seemingly lopsided odds, there is every indication that the generic drug industry and a handful of its supporters in Congress will succeed in derailing efforts to strengthen laws governing process patents -- those that cover the way products are made.

Almost every industrialized country offers the holders of process patents the same legal protection as holders of the common variety of product patents. But not the United States. With the exception of possible International Trade Commission injunctions, there is no legal liability for any foreign manufacturer or American importer that brings into the United States products that infringe on American process patents.

So far, experts say, this loophole in American patent law has caused untold millions of dollars in damage to American industry. Everyone from Lyndon Johnson's 1966 Commission on the Patent System to the Reagan administration's 1985 Commission on Industrial Competitiveness has identified process patent reform as a priority.

Among American manufacturing companies, particularly in the high-technology area, where reliance on process patents is heavy, strengthening the patent laws borders on an obsession. "Intellectual property rights is the essence of preserving international competitiveness," said Industrial Biotechnology Association Chairman George Rathmann, whose organization lists process patent legislation as its "paramount" concern.

But patent holders have met only frustration in their attempts to persuade Congress to enact remedial legislation. Although a patents bill was passed in the House in April, the entire effort to strengthen process patent laws now seems to be in jeopardy.

Arguing that process patent legislation could force increases in the costs of the drugs they produce and that the legislation could be used by the brand-name drug manufacturers to drive them out of business, the generic drug industry pushed alternative patent legislation through the Senate earlier this year that many patent holders considered an attempt to sabotage the entire patent effort.

Process patents are part of the negotiations surrounding the trade bill now before House-Senate conferees, but few are optimistic about the legislation's prospects.

"At the very best, the U.S. will have the weakest law in the world, and at worst a law that doesn't mean anything," said Michael W. Blommer, executive director of the American Intellectual Property Law Association.

Others predict that the whole effort will come to naught. "I'm not optimistic at this stage," said a House staffer. "People are backing away, and the bill's just getting weaker and weaker."

Only the generic-drug industry is happy. "From our point of view, the status quo is just fine," said William Haddad, chairman of the Generic Pharmaceutical Industry Association. "The status quo is best for us."

Unlike many American manufacturers, generic drug companies don't depend on patent laws to protect their products. Over the past few years,the generics have grown to supplying a quarter of the $20 billion American prescription drug market by making discount versions of drugs for which regular product patent protection has expired.

That makes the generics somewhat anomalous among American manufacturers, but it also has earned the industry powerful allies in Congress among those concerned about the ability of the poor and elderly to afford drugs. By avoiding research and development costs and depending almost entirely on cheaper foreign suppliers for raw materials, generics have managed to cut, on average, $2 from the cost of each prescription, saving consumers hundreds of millions of dollars every year.

The foreign suppliers on which the generics depend, however, are among those suspected of infringing on American process patents, and many of the industry's backers within Congress have worried that the benefits of lower drug prices could be jeopardized by any strict forms of process patent legislation.

The issue isn't that the generics knowingly buy pirated products from overseas. Some pharmaceutical companies make that claim, but the evidence for it is slim. "It's absolute bull," Haddad said. "There's not a single case they can point to."

The issue is how the generics should have to take steps to guard against being unwitting recipients of merchandise that infringes on patents. It is a common practice among other importers, for example, to ask foreign suppliers to give legal guarantees that the merchandise in question does not violate American product patents. Currently, admits Alfred Engelberg, GPIA's outside counsel, the generics don't do that.

"The procedure varies with company and supplier," he said. "Some brokers try and get process description, try and make some sort of evaluation ... but it's difficult. {Foreign} manufacturers are interested in protecting their trade secrets, and don't want to make full and open disclosure. They also might not know what the patents are."

"Right now, it's not in the generics' interest to find out about patents," said Robert Baechtold, a patent attorney in New York who consults for the Pharmaceutical Manufacturers Association. "It's like see no evil, hear no evil. Unless you write a law giving them an incentive, they're are just not going to do it."

But the generics and their defenders in the Senate -- particularly Utah Republican Orrin Hatch -- have argued that making process protections equal to product patent protection would leave the generic drug companies open to legal harassment from their brand-name competitors. "The generics would be flooded with lawsuits," Engelberg said. "Look, if I can create a draconian law where you are liable from day one, I'm going to get out there and sue you on everything. Maybe I'll catch you on something. At least I'll drive you nuts."

"It would basically put us out of business," Haddad said.

In the Senate compromise bill crafted earlier this year, the generics successfully argued for amendments to the process patent bill that they said made the legislation more palatable.

For example, the Senate bill takes the unusual step of instructing the courts to take into account the "good faith" and "reasonable business practices" of accused infringers when determining injunctions and damages.

Importers caught with material made in infringement of American process patents are allowed to sell all of the products in their possession, anything in transit, and anything for which a "binding commitment" to purchase has been made, before complying with a court order to stop.

The Senate bill also takes a number of steps to shift the burden of proving actual infringement more heavily onto the company alleging an infraction than is now required under product patent law. Generics would not even be required, as they are under product law, to undertake a search to check that merchandise bought from overseas manufacturers doesn't infringe on American patents. Instead, patent owners would be required under certain circumstances to furnish a list of their process patents which "could be asserted to be infringed" by importation.

But few of the industrial organizations involved in the patent fight find these amendments acceptable.

The U.S. Chamber of Commerce has called the "binding commitment" provision "excessively generous to the infringer" and, along with others, argued that it makes a mockery of the principle of intellectual property.

"If I'm a generic and you give me that clause, I'm just going to go out and order 17 years worth of products," Rathmann said. "What they're really saying is that they don't believe in patents."

John Uilkema, chairman of the American Bar Association's patent section, said in a letter to the trade bill conferees that the "good faith" provision could be interpreted by the courts to give "broad exemption from injunctions and damage liability for infringers."

As for the complicated disclosure requirements, many observers regard them as unacceptable deviations from the principle that it is the importer's -- not the patent holder's -- responsibility to ensure compliance with the law.

"All it costs the generics to comply with this law is a 22-cent stamp to mail a form letter to a drug company, and overseas postage to send that list to their supplier. Then they're off the hook," Baechtold said. "The bill doesn't follow through and make them liable for the information they find out. If the supplier writes back and chooses not to comply, they're still free to deal with them."

"It's kind of a shame, really," Blommer said. "The basic U.S. position is and always has been that strong, effective patent law is of benefit not only to us but to our trading partners. The Senate bill flies in the face of all that. It just goes to show you how effective a lobbying effort the generics have."