CQV Co., Ltd. v. Merck Pat. GmbH

Authored by: Jeremy J. Gustrowsky

In the recent case of CQV Co., Ltd. v. Merck Patent GmbH, the Federal Circuit addressed a dispute over the validity of U.S. Patent No. 10,647,861, which covers alpha-alumina flakes used in products like paints and cosmetics. CQV, a manufacturer of competing pigment products, challenged the patent at the Patent Trial and Appeal Board (PTAB), arguing that Merck’s patent claims were obvious in light of prior art, particularly a product called Xirallic®. However, the PTAB ruled against CQV, finding that they had not sufficiently proven that the relevant Xirallic® sample was available to the public before the patent’s critical date.

On appeal, the Federal Circuit first tackled whether CQV had the right to bring the case—known as “standing.” The court found that CQV did have standing because Merck had accused CQV’s customers of infringement, leading one customer to require CQV to provide an indemnity agreement. This real-world consequence was enough to show CQV could be harmed by the patent, allowing the appeal to proceed.

The main issue on appeal was whether the PTAB properly considered all the evidence about when the Xirallic® sample (Sample C) became publicly available. The Federal Circuit found that the PTAB had overlooked key, unrebutted evidence showing that Sample C likely would have been available to the public shortly after quality control, well before the critical date. The court emphasized that the PTAB must consider the entire record and clearly explain its reasoning, especially when important evidence is presented and not challenged.

As a result, the Federal Circuit vacated the PTAB’s decision regarding most of the challenged patent claims and sent the case back for further review. The Board was instructed to reconsider the evidence and provide a thorough explanation of its findings, ensuring that the correct legal standards are applied.