STEVENS, J., dissenting 496 U. S. assumed the responsibility for discharging a significant share of the company's pension obligations, that responsibility by the PBGC is an important resource on which the company has a right to rely during the reorganization process. It may use the financial cushion to fund capital investments, to pay current salary, or to satisfy contractual obligations, including the obligation to pay pension benefits. As long as the company uses its best efforts to complete the reorganization (and, incidentally, to reimburse the PBGC for payments made to its former employees to the extent required by ERISA),1 the PBGC does not have any reason to interfere with managerial decisions that the company makes and the bankruptcy court approves. Whether the company's resources are dedicated to current expenditures or capital investments and whether the package of employee benefits that is provided to the work force is composed entirely of wages, vacation pay, and health insurance, on the one hand, or includes additional pension benefits, on the other, should be matters of indifference to the PBGC. Indeed, if it was faithful to the statement of congressional purposes in ERISA, see ante, at 648, it should favor an alternative that increases the company's use and maintenance of pension plans and that provides for continued payment to existing plan beneficiaries. The follow-on plans, in my opinion, are wholly consistent with the purposes of ERISA. According to the Court, the PBGC policy is premised on the belief that if the company cannot adopt a follow-on plan, the employees will object more strenuously (1) in the case of a 1At the time of the termination of the LTV plans, the PBGC was entitled to recover only 75 percent of the amounts expended to discharge LTV's pension obligations. The statute has since been amended to authorize a 100 percent recovery. LTV represents that if the restoration order is upheld, and if-as seems highly probable-it is promptly followed by another termination, the PBGC bankruptcy claim will increase from about $2 billion to more than $3 billion. Brief for Respondents LTV Corp. and LTV Steel 33, n. 21. The PBGC, of course, does not assert this change as a justification for the restoration order. 633 STEVENS, J., dissenting 2 voluntary termination, to the "company's original decision to terminate a plan"; and (2) in the case of an involuntary termination, to the company's decision "to take financial steps that make termination likely." Ante, at 651. That belief might be justified in the case of a voluntary termination of an ERISA plan. Since the follow-on plan would be adopted immediately after plan termination, those who could object to the insurable event are also reasonably assured of receiving benefits when the insurance is paid. That view is wholly unwarranted, however, in the case of an involuntary termination. The insurable event, plan termination, is within the control of the PBGC, which presumably has determined that the company does not have the financial resources to meet its current pension obligations. Even if the company could adopt a follow-on plan, the employees will be no less likely to object to the financial steps that will lead to plan termination because they would have no basis for belief that a union will insist on that course when, perhaps years later, the PBGC involuntarily terminates the plan. The safety that comes from a healthy pension plan will not be overcome by the hope that a future union will remember the interests of its retirees and former employees. Plan restoration in these circumstances is not a legitimate curative to the problem of moral hazard, but rather constitutes punishment of both labor and management for the imprudence of their predecessors. In the case of an involuntary termination, if a mistake in the financial analysis is made, or if there is a sufficient change in the financial condition of the company to justify a reinstatement of the company's obligation, the PBGC should use its restoration powers. Without such a financial justification, however, there is nothing in the statute to authorize the PBGC's use of that power to prevent a company from creat 2 The three opinion letters identifying the PBGC policy concerning follow-on plans all involved voluntary terminations. See App. to Pet. for Cert. 159a, 165a, 172a. The restoration order entered in this case was unprecedented. STEVENS, J., dissenting 496 U. S. ing or maintaining the kind of employee benefit program that the statute was enacted to encourage. Accordingly, I respectfully dissent. Syllabus ELI LILLY & CO. v. MEDTRONIC, INC. CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT No. 89-243. Argued February 26, 1990-Decided June 18, 1990 Claiming infringement of two of its patents, petitioner Eli Lilly's predecessor-in-interest filed suit to enjoin respondent Medtronic's testing and marketing of a medical device. Medtronic defended on the ground that its activities were undertaken to develop and submit to the Government information necessary to obtain premarketing approval for the device under § 515 of the Federal Food, Drug, and Cosmetic Act (FDCA) and were therefore exempt from a finding of infringement under 35 U. S. C. § 271(e)(1), which authorizes the manufacture, use, or sale of a patented device "solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs." The District Court concluded that § 271(e)(1) does not apply to medical devices and, after a jury trial, entered judgment on verdicts for Eli Lilly. The Court of Appeals reversed on the ground that, under § 271(e)(1), Medtronic's activities could not constitute infringement if they were related to obtaining regulatory approval under the FDCA, and remanded for the District Court to determine whether that condition had been met. Held: Section 271(e)(1) exempts from infringement the use of patented inventions reasonably related to the development and submission of information needed to obtain marketing approval of medical devices under the FDCA. Pp. 665-679. (a) The statutory phrase of § 271(e)(1), "a Federal law which regulates the manufacture, use, or sale of drugs," is ambiguous. It is somewhat more naturally read (as Medtronic asserts) to refer to the entirety of any Act, including the FDCA, at least some of whose provisions regulate drugs, rather than (as Eli Lilly contends) to only those individual provisions of federal law that regulate drugs. However, the text, by itself, is imprecise and not plainly comprehensible on either view. Pp. 665-669. (b) Taken as a whole, the structure of the 1984 Act that established § 271(e)(1) supports Medtronic's interpretation. The 1984 Act was designed to remedy two unintended distortions of the standard 17-year patent term produced by the requirement that certain products receive premarket regulatory approval: (1) the patentee would as a practical matter not be able to reap any financial rewards during the early years of the term while he was engaged in seeking approval; and (2) the end of Syllabus 496 U. S. the term would be effectively extended until approval was obtained for competing inventions, since competitors could not initiate the regulatory process until the term's expiration. Section 202 of the Act addressed the latter distortion by creating § 271(e)(1), while § 201 of the Act sought to eliminate the former distortion by creating 35 U. S. C. § 156, which sets forth a patent-term extension for inventions subject to a lengthy regulatory approval process. Eli Lilly's interpretation of § 271(e)(1) would allow the patentee of a medical device or other FDCA-regulated nondrug product to obtain the advantage of § 201's patent-term extension without suffering the disadvantage of § 202's noninfringement provision. It is implausible that Congress, being demonstrably aware of the dual distorting effects of regulatory approval requirements, should choose to address both distortions only for drug products, and for other products named in § 201 should enact provisions which not only leave in place an anticompetitive restriction at the end of the monopoly term but simultaneously expand the term itself, thereby not only failing to eliminate but positively aggravating distortion of the 17-year patent protection. Moreover, the fact that § 202 expressly excepts from its infringement exemption "a new animal drug or veterinary biological product”— each of which is subject to premarketing licensing and approval under, respectively, the FDCA and another "Federal law which regulates the manufacture, use, or sale of drugs," and neither of which was included in §201's patent-term extension provision-indicates that §§201 and 202 are meant generally to be complementary. Interpreting § 271(e)(1) as the Court of Appeals did appears to create a perfect "product" fit between the two sections. Pp. 669-674. (c) Sections 271(e)(2) and 271(e)(4), which establish and provide remedies for a certain type of patent infringement only with respect to drug products, do not suggest that § 271(e)(1) applies only to drug products as well. The former sections have a technical purpose relating to the new abbreviated regulatory approval procedures established by the 1984 Act, which happened to apply only to drug products. Pp. 675-678. 872 F. 2d 402, affirmed and remanded. SCALIA, J., delivered the opinion of the Court, in which REHNQUIST, C. J., and BRENNAN, MARSHALL, BLACKMUN, and STEVENS, JJ., joined. KENNEDY, J., filed a dissenting opinion, in which WHITE, J., joined, post, p. 679. O'CONNOR, J., took no part in the consideration or decision of the case. Timothy J. Malloy argued the cause for petitioner. With him on the briefs were Gregory J. Vogler, Lawrence M. Jarvis, and Edward P. Gray. |