NEW YORK (CNNMoney.com) -- Novo Nordisk has sued Pfizer, alleging that the new product Exubera violates patents on inhalable insulin for diabetics.

"We're trying to protect our intellectual property," said Novo Nordisk general counsel Jim Shehan. "We've been a leader in diabetes for 80 years. For us to keep that leadership position it's essential that our intellectual property rights are respected."

Shehan said that Pfizer's (up $0.46 to $26.45, Charts) Exubera violates five Novo Nordisk (down $0.60 to $55.70, Charts) patents involving inhaled insulin, and that the first of his company's patents was filed in 1993. The company filed the suit on Tuesday in federal court in Manhattan, where Pfizer is based.

Pfizer, the biggest drug maker in the world, plans to release Exubera, the first form of inhalable insulin, in the U.S. in September. This product, believed by some analysts to be a potential billion-dollar blockbuster, would allow diabetics to inhale dry powdered insulin through a dispenser. Diabetics have difficulty or are unable to produce insulin naturally, and injected insulin has been the standard treatment since the 1920s.

Danish drugmaker Novo Nordisk, the leading supplier of insulin worldwide, is conducting late-stage tests with AERx, a formed of inhaled insulin that uses aerosol. Novo Nordisk developed the product with Aradigm Corp. (up $0.20 to $2.00, Charts)

But Pfizer is years ahead of the competition. If Novo Nordisk's tests, which involve 2,000 patients, are successful, then the drug maker would probably file its application to the Food and Drug Administration in 2009.

Pfizer Bryant Haskins released this statement in response to the lawsuit: "Pfizer has not had an opportunity to review the Novo Nordisk complaint, but we are confident in the innovation behind the development of this important new medicine."

The U.S. drug market for diabetes is at least $12 billion and growing, fueled by aging baby boomers suffering from bad health and obesity, known by health care providers as "diabesity."

In diabetes, the pancreas fails to produce enough insulin, which converts sugar into energy. The American Diabetes Association says that 20.8 million Americans are diabetic, while another 41 million are at risk.

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