By Jessica Dye

(Reuters) - A U.S. judge on Friday ruled that Apple Inc cannot pursue an injunction against Google's Motorola Mobility unit, effectively ending a key case for the iPhone maker in the smartphone patent wars.

The ruling came from Judge Richard Posner in Chicago federal court. He dismissed the litigation between Apple and Motorola Mobility with prejudice, meaning it can't be refiled.

The ruling is a blow for Apple, which had hoped a decisive ruling against Motorola would help it gain an upper hand in the smartphone market against Android.

A representative for Apple declined to comment. Motorola did not immediately return requests for comment Friday evening.

Motorola sued Apple in October 2010, a move that was widely seen as a preemptive strike against an imminent Apple lawsuit. Apple filed its own claims against Motorola the same month.

Posner issued a series of pretrial rulings that eliminated nearly all of Motorola's patent claims against Apple from the prospective trial, while maintaining more of Apple's claims against Motorola. That meant Apple had more to gain in the trial, which had been set to start last week.

Apple had sought an injunction barring the sale of Motorola products. In Friday's ruling, Posner wrote that "neither party is entitled to an injunction."

Either party has the option to appeal Posner's ruling.

(Reporting by Jessica Dye and Dan Levine; Editing by Gary Hill)