A federal district court in Florida found that a third party's pending arbitration proceedings involved the same operative facts and law as the current litigation, and allowed the third party to intervene and granted a motion to stay litigation pending the outcome of the arbitration proceedings.

In Petrik v. Reliant Pharmaceuticals, Inc., No. 8:07-CV-1462-T-24 TBM, 2007 WL 3283170 (D. Fla. Nov. 5, 2007), Petrik owned the registered trademark, RYTHMOL®. Abbott Laboratories obtained a license for the use of the trademark in the United States.

The license was governed by Swiss law and did not explicitly allow second level sub-licensing without Pertik's express written consent. Petrik contends that Abbott's transfer of the U.S. rights under the license to Reliant was in violation of the terms of the license, and that he never authorized Reliant to use the trademark.

To this end, Petrik instituted contractual arbitration proceedings against Abbott, and Petrik filed this lawsuit against Reliant alleging federal trademark infringement among other claims. Thereafter, Abbott filed a motion to intervene, and Abbott and Reliant filed a motion to stay the litigation pending resolution of the arbitration between Petrik and Abbott.

The Court noted that Federal Rule of Civil Procedure 24, in pertinent part, allows for permissive intervention in an action when an applicant's claim or defense, and the main action in question, have a question of law or fact in common. In this case, Abbott's defense to Petrik's claim in the arbitration is whether Abbott was allowed to sub-license RYTHMOL® to Reliant without Petrik's express written consent.

One of Reliant's defenses in this case is that it acted pursuant to a valid license. Thus, the litigation and Abbott's claims and defenses in arbitration had questions of law and fact in common, because if the arbitration resulted in a determination that Abbott could sub-license the trademark to Reliant, it would appear that Petrik's litigation claims against Reliant would necessarily fail.

The Court rejected Petrik's argument that Abbott's only purpose for intervening is an attempt to delay Petrik's ability to secure relief against Reliant. Accordingly, the Court allowed Abbott to intervene.

Abbott and Reliant moved for a stay of the litigation pending the outcome of the arbitration proceedings. The Court noted that in determining a motion to stay litigation proceedings, the outcome of the nonarbitrable claims will depend upon the arbitrator's decision.

In granting the motion to stay, the Court explained that the arbitrators in Switzerland were better equipped to determine whether, under Swiss law, the license agreement between Abbott and Petrik allowed Abbott to sub-license the trademark to Reliant. Additionally, a stay was warranted because the claims at issue in the case are intimately intertwined with the same operative facts and law as the Swiss arbitration between Abbott and Petrik.