By Erin Geiger Smith

NEW YORK, Feb 14 (Reuters) - A federal appeals court on Thursday said two Cephalon Inc patents related to the cancer drug Fentora are valid, overturning part of a lower court order against the unit of Israel's Teva Pharmaceutical Industries Ltd.

The U.S. Court of Appeals for the Federal Circuit nonetheless concluded that Actavis Inc, which had challenged the patents, did not infringe them by offering a generic version of the drug.

Fentora dissolves in the mouth and is designed to quickly relieve pain in cancer patients.

In 2007, Watson Pharmaceuticals Inc, which later changed its name to Actavis, sought approval to market a generic version of Fentora.

Cephalon filed a lawsuit in June 2008, saying Watson's generic version of Fentora infringed its patents.

Delaware federal judge Sue Robinson ruled in March 2011 that Watson did not infringe the patents.

But she also said the patents were invalid because they lacked certain disclosures that would require a party trying to practice the invention to do too much additional experimentation.

The appeals court disagreed with the latter finding, saying Actavis failed to show that the experimentation necessary to carry out the patented method to administer the drug would be "unduly extensive."

Actavis did not immediately respond to a request for comment.

Teva spokeswoman Denise Bradley said that because of an earlier court ruling related to another Teva patent, Actavis cannot launch a generic version of Fentora until October 2019.

In a regulatory filing, Teva said it generated $5.5 billion of revenue last year from the sale of central nervous system specialty products, including Fentora.

Shares of Actavis were down 43 cents to $86.30 in afternoon trading on the New York Stock Exchange.

The case is Cephalon Inc et al v. Watson Pharmaceuticals Inc, U.S. Court of Appeals for the Federal Circuit, No. 11-1325.

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