OPINION OF THE COURT
Defendant Amgen, Inc. appeals from the grant of a preliminary injunction in favor of plaintiff Ortho Pharmaceutical Company, in a contract dispute that the parties agreed to submit to arbitration. The primary issues in this appeal are whether the Federal Arbitration Act, 9 U.S.C. §§ 1-15 (1982), abrogates the district court’s power to issue a preliminary injunction in an arbi-trable dispute, and whether the district court erred in deciding that Ortho had met the prerequisites for a preliminary injunction.
The appeal is moot as it relates to paragraphs one and three of the district court order and will be dismissed. We will vacate and remand to the district court those *808 aspects of the order with continuing legal effect, to determine whether the circumstances continue to warrant the imposition of preliminary injunctive relief.
I.
Amgen is a biotechnology company with the technology for the production of commercial quantities of erythropoietin (EPO), a human protein normally produced in the kidney, which stimulates the formation of red blood cells. Persons who develop chronic kidney disease often suffer from an impaired ability to make erythropoietin, which in turn results in an impaired ability to make red blood cells, a condition commonly known as anemia. By correcting the body’s erythropoietin deficiency, synthetic EPO offers an alternative to the current form of treatment for this disease — repeated red blood cell or whole blood transfusions — which itself can present serious side-effects.
Ortho is a subsidiary of Johnson & Johnson involved in the research, development, manufacturing and marketing of pharmaceutical and biological medicines. On September 30, 1985, Amgen and Ortho entered into two written contracts, a Technology License Agreement and a Product License Agreement (collectively, the Agreement), to bring to market three different biological medicines: hepatitis B vaccine (Hep-B), In-terluekin-2 (IL-2), and EPO.
Under the Agreement, Amgen granted Ortho an exclusive royalty-bearing license to market and sell EPO in the United States for all therapeutic indications except dialysis, reserving for itself the dialysis market. Additionally, Amgen promised to manufacture and supply Ortho’s requirements for EPO in the United States. 1 Pursuant to the Public Health Service Act, 42 U.S.C. §§ 262 et seq. (1982), and accompanying regulations, 21 C.F.R. §§ 600-601.51 (1988), a biological substance such as EPO can be sold in the United States only after the Food and Drug Administration (FDA) approves both a Product License Application (PLA), which licenses the product, and an Establishment License Application (ELA), which licenses the manufacturing facility where the product is made. 2 The Agreement presupposed that each company was responsible for obtaining its own FDA approval, but would exchange and cross-reference all information in this regard to expedite approval of both applications by the FDA. Finally, the Agreement provided that the parties would submit to arbitration all disputes arising under the Agreement, and that California substantive law would govern their resolution.
During 1987, the parties began disputing their respective regulatory, marketing, and supply rights and obligations. More specifically, the parties differed over: the strategy for obtaining FDA approval, in particular, whether the two companies would submit a joint filing with the FDA or would individually file a separate PLA/ELA for their respective commercial markets; the acceptability of several marketing collaboration proposals, calculated in part to address Amgen’s concern that Ortho’s focus on the “pre-dialysis” market, combined with its desire to submit a joint PLA/ELA, would infringe on Amgen’s reserved dialysis market; 3 and the price and quantity terms of the EPO supply arrangement which were left unspecified in the Agreement.
In October, 1987, Amgen filed its application with the FDA for the indication *809 “chronic renal failure,” supported solely by its own clinical data from dialysis patients. This application never included Ortho’s pre-dialysis clinical data. 4
On January 23, 1989, Ortho filed a demand for arbitration with the American Arbitration Association. In addition to damages, Ortho sought from the arbitrator an order requiring Amgen to submit Or-tho’s clinical data to the FDA, to identify Ortho as a distributor in the PLA/ELA, to submit Ortho’s label to the FDA, and to supply Ortho with EPO. Amgen filed for arbitration on other issues. On January 31, 1989, Ortho filed suit in the district court seeking preliminary injunctive relief “to maintain the status quo during the pendency of the arbitration proceeding.” More specifically, Ortho claimed that Am-gen had breached the Agreement by refusing to make the necessary filings with the FDA needed to enable Amgen to supply Ortho with EPO, including Amgen’s refusal to submit Ortho’s pre-dialysis clinical studies, and by refusing to supply finished EPO to Ortho. Ortho requested an injunction prohibiting Amgen from further prosecuting its PLA/ELA for EPO and from marketing EPO pending arbitration, unless Amgen were to make all filings necessary to permit Ortho to sell in its agreed-upon market. Without such relief, Ortho urged, Amgen would cause Ortho irreparable injury by preempting the entire EPO market for itself, thereby depriving Ortho of the benefits of the exclusive license.
While this litigation was pending, on February 9, 1989, after meeting with FDA representatives, Amgen wrote the FDA requesting permission to narrow its PLA/ELA to the indication “end-stage chronic renal failure,” which would include only patients currently receiving dialysis treatment. Later that same month, Ortho filed with the FDA its own PLA/ELA for the indication of chronic renal failure.
After the parties had engaged in expedited discovery, the district court held an evi-dentiary hearing on March 17, 1989. On March 23, 1989, the district court issued its first opinion and accompanying order.
Ortho Pharmaceutical Corp. v. Amgen, Inc.,
Amgen complied fully with the district court order. On March 24, 1989, Amgen wrote to the FDA advising it that the company was withdrawing its request to limit its PLA indication to end-stage renal disease, i.e., dialysis only. On March 27,1989, Amgen delivered to the FDA two sets of data provided by Ortho. Amgen refused, however, to deliver the “distributorship package,” that would have listed Ortho as a distributor of EPO. According to Am-gen, the delivery of such materials exceeded the scope of the district court’s order, and, moreover, the parties had never entered a distributorship agreement with respect to EPO.
Amgen filed a motion for reconsideration and stay of the order pending reconsideration, and requested that the district court amend paragraph three of its order to indicate that Amgen was not obligated to submit Ortho’s distributorship packet. In an opinion dated April 21, 1989, the district court denied Amgen’s motion for reconsideration of the grant of the preliminary injunction. However, the court held that its March 23 order did not require Amgen to list Ortho as a distributor of EPO. Ortho Pharmaceutical Corp. v. Amgen, Inc., No. 89-34-JJF, slip op. at 6 (D.Del. April 21, 1989). 5 Additionally, the district court specified that its findings of fact were not binding on the arbitrator. Id. at 2.
On June 1, 1989, while Amgen’s appeal was pending, the FDA approved EPOGEN, Amgen’s trade name for EPO, for the entire chronic renal failure indication.
II.
Ortho contends that Amgen’s appeal is “in large part moot.” Ortho argues that the crux of the district court order, contained in paragraphs one and three, required Amgen to maintain its PLA/ELA for the indication “chronic renal failure,” rather than narrow it to cover only “end-stage renal failure,” and to include Ortho’s clinical pre-dialysis data in this submission. FDA approval of the application as submitted, Ortho asserts, leaves this court unable to remedy any alleged error committed by the district court in ordering such relief. Without conceding this point, Am-gen responds that other aspects of the district court order continue to affect Am-gen’s substantive rights. First, Amgen asserts that paragraphs four and five of the order place Amgen under a continuing obligation to submit to the FDA whatever additional Ortho data may become necessary or appropriate and to include Ortho in any discussions with the FDA concerning Am-gen’s PLA/ELA for EPO. Second, Amgen claims that the district court order interferes with the parties’ pending arbitration because paragraph seven requires the parties to expedite arbitration, and because the district court’s factual determinations will prejudice the outcome of the arbitration. Third, Amgen argues that the district court opinion, by implying that there had been improper collusion between Amgen and FDA officials, adversely affects the ongoing relationship between Amgen and the FDA, and tarnishes Amgen’s public image.
Federal courts, having jurisdiction only to decide actual cases and controversies, are “without the power to decide questions that cannot affect the rights of litigants in the case before them.”
DeFunis v. Odegaard,
III.
As an initial matter, we must decide whether the district court has subject matter jurisdiction to entertain a motion for preliminary injunctive relief in a dispute that the parties agree is arbitrable. Am-gen argues that the plain words of § 3 of the Arbitration Act preclude a district court from issuing an injunction except to “stay other proceedings relating thereto.” Amgen contends that to hold otherwise would necessarily embroil the courts in the merits of the controversy more appropriately left to the arbitrator. In addition, Amgen maintains that because even truncated judicial proceedings for interim relief may require depositions, document discovery, and briefing, these proceedings contravene the congressional intent “to move the parties to an arbitrable dispute out of court and into arbitration as quickly as possible,” citing
Moses H. Cone Memorial Hospital v. Mercury Constr. Corp.,
Whether a district court has subject matter jurisdiction to grant injunctive relief in an arbitrable dispute presents a question of first impression for this court.
6
We find guidance, however, in the reasoning of the Courts of Appeals for the First, Second, Fourth, Seventh, and Ninth Circuits, all of which have determined that the Arbitration Act does not deprive the district court of the authority to grant interim relief in an arbitrable dispute, provided the court properly exercises its discretion in issuing the relief.
See Teradyne, Inc. v. Mostek Corp.,
We first consider Amgen’s claim that the language of § 3 of the Arbitration Act expressly prevents the district court from entering preliminary injunctive relief. Section 3 provides:
§ 3. Stay of proceedings where issue therein referable to arbitration
If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration.
9 U.S.C. § 3. Amgen asserts that the language providing that the district court “shall” stay “any suit or proceeding” regarding an issue that is referable to arbitration, expressly prohibits the district court from issuing a preliminary injunction in an arbitrable dispute. We disagree that the Arbitration Act expressly addresses the issue.
Accord Teradyne,
Consequently, we must decide whether the exercise of the district court’s equitable powers would undermine the operation of the Arbitration Act, and is therefore implicitly prohibited. Like the majority of courts that have examined the issue, we find no conflict and thus no implicit prohibition. After an exhaustive discussion of various circuit and Supreme Court authority, the First Circuit in Teradyne summarized the rationale for the majority rule:
[T]his approach reinforces rather than detracts from the policy of the Arbitration Act.... We believe that the congressional desire to enforce arbitration agreements would frequently be frustrated if the courts were precluded from issuing preliminary injunctive relief to preserve the status quo pending arbitration and, ipso facto, the meaningfulness of the arbitration process.
Teradyne,
Therefore, we hold that a district court has the authority to grant injunctive relief in an arbitrable dispute, provided that the traditional prerequisites for such relief are satisfied. This court has consistently identified four factors that a court must consider in ascertaining the propriety of a preliminary injunction: (1) whether the
*813
movant has demonstrated reasonable probability of eventual success in the litigation; (2) whether the movant has demonstrated that it will be irreparably injured
pendente lite
if relief is not granted to prevent a change in the
status quo;
(3) the possibility of harm to other interested persons from the grant or denial of the injunction, and (4) the public interest.
See Constructors Assoc. of Western Pennsylvania v. Kreps,
Our conclusion here — that in the case of an arbitrable dispute, the district court should apply the traditional test to determine whether the case is an appropriate one to issue injunctive relief, and that a reviewing court should accord deference to the district court’s balancing of these traditional factors — comports with the views of other courts of appeals. After holding that “a district court can grant injunctive relief in an arbitrable dispute pending arbitration, provided the [traditional] prerequisites for injunctive relief are satisfied,”
id.
at 51, the
Teradyne
court then reiterated that “[t]he decision to grant or deny a preliminary injunction is a matter for the discretion of the district court,”
id.
at 52. Similarly, in
Roso-Lino Beverage Distributors,
Nevertheless, Amgen contends that even if the Arbitration Act does not abrogate entirely the district court’s subject matter jurisdiction over arbitrable disputes, it at least limits that jurisdiction to “preservation of the status quo.” Accordingly, Am-gen argues that in this case, the district court “exceeded the scope of its jurisdiction” by: (1) “misperceiving” the status quo; (2) addressing the merits of the contractual dispute; and (3) granting relief that resolved the pending dispute. Central to Amgen’s analysis is the belief that the “status quo ” at the time arbitration was filed was that the FDA was considering Amgen’s own PLA that did not include Ortho clinical data. Whether the district court exceeded the scope of its jurisdiction is an issue of law subject to plenary review by this court.
As our previous discussion indicates, we disagree that the “preservation of the status quo ” operates as a separate test for determining whether the district court acted within its jurisdictional authority. Rather, the “preservation of the status quo ” represents the goal of preliminary injunctive relief in any litigation, including in an arbitrable dispute. It is the balancing of the various factors of the traditional four-pronged test that bear upon the court’s exercise of discretion:
[T]he most compelling reason in favor of ... [issuing a preliminary injunction] is the need to prevent the judicial process from being rendered futile by defendant’s action or refusal to act. On the other hand, judicial intervention before the merits have been finally determined frequently imposes a burden on defendant that ultimately turns out to be unjustified. Consequently, the preliminary injunction is appropriate whenever the *814 policy of preserving the court’s power to decide the case effectively outweighs the risk of imposing an interim restraint before it has done so.
Wright & Miller, Federal Practice and Procedure, § 2947 at 424 (1973). Thus, the function of this traditional test is to enable the court, on the basis of the data before it, “to attempt to minimize the probable harm to legally protected interests between the time that the motion for a preliminary injunction is filed and the time of the final hearing.”
Constructors Assoc. of Western Penn.,
In sum, courts invoke the phrase “preservation of the
status quo
” as a summary explanation of the need to protect the integrity of the applicable dispute resolution process. Thus, the court granting an injunction has the power — and indeed is required — to make all factual findings necessary to “set forth the reason for ... issuance [of injunctive relief].” Fed.R. Civ.P. 65(d). Moreover, because the district court must focus on preservation of the integrity of the arbitration process, the relief granted need not be limited to restoring the parties precisely to their pre-litigation position without regard to the irreparable injury that movant faces. If the existing “status quo” is currently causing one of the parties irreparable injury and thereby threatens to nullify the arbitration process, then it is necessary to alter the situation to prevent the injury.
See Canal Auth. of the State of Florida v. Callaway,
In support of its position that the “preservation of the
status quo”
serves as a jurisdictional test, Amgen relies principally on
Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Bradley,
where a dispute is subject to mandatory arbitration under the Federal Arbitration Act, a district court has the discretion to grant a preliminary injunction to preserve the status quo pending the arbitration of the parties’ dispute if the enjoined conduct would render that process a “hollow formality.” The arbitration process would be a hollow formality where “the award when rendered could not return the parties substantially to the status quo ante, [citation omitted].”
Id.
at 1053-54. The
Bradley
court concluded, however, that by finding that the mov-ant faced irreparable harm, “the district court implicitly found that arbitration of this dispute would be a hollow formality absent preliminary relief.”
Id.
at 1055. As we noted above, the First Circuit’s
Ter-adyne
decision took a similar view. While explaining that the district court “can, and should, grant a preliminary injunction in an arbitrable dispute to preserve the status quo pending arbitration,”
IV.
The district court’s order presents a “live controversy” only to the extent that it required (1) communication and cooperation between the parties on Amgen’s PLA/ELA (paragraphs four and five), and (2) the expedition of arbitration on the EPO issues (paragraph seven). The district court’s rationale for granting relief, however, focused on the pending FDA approval process. The district court explained in its opinion of March 23, 1989:
Ortho seeks, as part of its remedy through arbitration that Amgen file Or-tho’s pre-dialysis data as a supplement to the pending chronic renal failure PLA, as *815 required by the Agreement of the parties. However, if Amgen is permitted to unilaterally (without Ortho consent) amend its application to a dialysis only indication, more particularly to end-stage renal disease, and obtains FDA approval, there will be no pending application for Amgen or Ortho to supplement. Such a result would certainly render the pending arbitration a “hollow formality.” ... [I]t is clear that if Amgen is allowed to alter its FDA filing much of the relief Ortho seeks in arbitration will not be available.
With the FDA having approved Amgen’s PLA covering the entire chronic renal failure indication, however, Ortho may no longer face the irreparable harm identified by the district court. Consequently, because that portion of the district order that has become moot is so intertwined with those aspects that are still live on appeal, it is impossible to evaluate whether the district court abused its discretion in issuing the relief still in force. We will vacate paragraphs four, five and seven of the order, and remand this case to the district court to determine whether, in light of subsequent developments, the portions of the order mandating communication, cooperation, and expedition of the EPO issues remain warranted under the traditional four-pronged test for preliminary injunctive relief. 8 The appeal as it relates to paragraphs one and three of the order will be dismissed as moot.
Each party to bear its own costs.
Notes
. The Agreement does not specify the details of the supply arrangement, but paragraph 5.01 provides that the parties would enter into an "appropriate Manufacture and Supply Agreement, relating to price, supply of products, ... disclosure of manufacturing technology, preparation and delivery specifications_” Paragraph 5.01 also provides that Amgen would supply EPO to Ortho at Amgen's "standard cost.”
. By regulation, only the manufacturer can apply for and obtain the required PLA and ELA. 21 C.F.R. § 601.2(a) ("To obtain a license for any establishment or product, the manufacturer shall make application” to the FDA).
.“Pre-dialysis" patients suffer from anemia associated with chronic renal failure that has not yet progressed so far as to require dialysis. Am-gen claims there are only about 10,000 patients in the pre-dialysis market. Ortho, however, sets the number at 50,000, claiming they represent an independent market of chronic renal stage disease that Amgen admits it did not reserve.
. Ortho claims that in April, 1988 it offered Amgen the pre-dialysis clinical data, but Amgen told Ortho not to send the data until the co-promotion agreement was finalized. In contrast, Amgen claims that Ortho "failed to transmit any clinical data to Amgen until February 7, 1989, and less than 20% of that data involved non-dialysis chronic renal failure patients...."
. This decision is the subject of another appeal not currently before this court.
. Whether the Arbitration Act deprives the district court of subject matter jurisdiction to enter preliminary injunctive relief is an issue of law subject to plenary review.
See Dent v. Cunningham, 786
F.2d 173, 175 (3d Cir.1986) (application of legal precepts subject to plenary review);
Chrysler Credit Corp. v. First Nat'l Bank & Trust Co.,
.
But see Ferry-More Seed Co. v. Food Corn, Inc.,
.
Cf. United States
v.
Spectro Foods,