By Jan Wolfe

Oct 30 (Reuters) - A U.S. appeals court on Wednesday dealt a major blow to Merck & Co Inc as it upheld a ruling that threw out a $2.54 billion jury verdict the drugmaker had won against Gilead Sciences Inc.

A three-judge panel of the U.S. Court of Appeals for the Federal Circuit upheld a Delaware judge's determination that the Merck patent at issue in the case, which relates to hepatitis C treatment, should not have been granted.

(Reporting by Jan Wolfe; Editing by Susan Fenton)