Do we have a problem? IP protection in outer space

So far in 2013, 25 ‘quasi-jurisdictional enclaves’ have been created in space. This is because 25 space objects have been registered with the United Nations Secretariat in accordance with the UN Registration Convention. Formal registration confers upon the state of registry extraterrestrial ‘jurisdiction and control’ over the space object to which the registration relates.

In other words, though the physical space inhabited by, for example, a US-registered space object does not become US territory, US domestic law nonetheless applies to the object and any personnel attached to it.

Some of these quasi-jurisdictional enclaves, ranging from microsatellites to modules of the International Space Station (ISS), may be scarcely as big as a tablet computer. But they house some very sophisticated new technology, such as microprocessors capable of withstanding space radiation that degrades memory bits.

It is not unusual for patent protection to be sought for technological innovations developed for use in space objects or in connection with the space industry. The European Space Agency (ESA) currently has a portfolio of more than 450 patents and patent applications for antennae, communications systems, laser navigational aids, semiconductors, power supplies and propulsion systems.

Meanwhile, per capita investment in space in the US is 10 times the European figure. According to a paper published in 2007, NASA had received more than 6,500 patentsit its history (accounting for approximately one every 1,000 patents issued by the US Patent and Trademark Office).

However, space-related IP is no longer the sole preserve of the space agencies. Instead, national and multinational space agencies have evolved into technology procurement agencies. In order to reap the benefits of open competition, research and development initiatives are being contracted out to the private sector. ESA estimates that 90 percent of its E4 billion annual budget goes towards fully-funded research contracts with private industry.

The move towards a competitive tendering model is reflected in a shift in IP policy whereby major space agencies allow contractors to retain ownership of the intellectual creations they produce. This is strong evidence that the private sector does not consider that the extraterrestrial application of an invention should prevent it from being protected though the ordinary proprietary channels.

Take, for instance, the microprocessors mentioned in the previous paragraph: they are the subject of patent rights held by their creators, Amtel Corp. Some of them are currently orbiting the earth at 820 km altitude on board ESA’s Proba-V satellite.

The private sector is not simply a passive mechanism for executing projects proposed by space agencies. Entrepreneurs are spearheading their own ambitious commercial space initiatives including in the fields of space tourism and civilian transport on suborbital reusable launch vehicles, space station re-supply missions and near-earth asteroid mining. Governments have woken up to the potential for private sector growth in the supply of space-related products and services.

Even as public spending is being cut in line with austerity measures, the UK government is keen to support the growth of its high-tech space industry. This is clearly illustrated by the £60 million grant awarded to Reaction Engines Ltd, formally announced by Minister for Universities and Science David Willets at the UK Space Conference in Glasgow in July.

This is the company set up by UK scientist Alan Bond to develop synergetic air-breathing rocket engines (SABRE technology) with the goal of dramatically reducing the fuel cost involved in accessing space.

Much more private capital will have to be raised in order for Reaction Engines to test and manufacture a marketable product. However, if successful, the applications for reusable spaceplanes employing SABRE technology are wide-ranging.

"In theory, at least, the state of registry could be purposely chosen so as to avoid any jurisdiction in which IP rights are held."

The launcher market is estimated to be worth £14 billion over the next 30 years. The creation and exploitation of IP rights is an integral part of generating a return on the substantial level of private investment entailed in these and similar commercial space projects.

The problem is that IP rights may have to be sought in an indeterminate number of jurisdictions in order to confer meaningful protection over a space invention. Consider, for example, any patentable inventions which may be the fruits of research and development into SABRE technology. Its potential advantages over conventional jet engines could encourage others to copy or emulate its inventive elements rather than seek a licence from Reaction Engines.

If a product or process, alleged to constitute infringement of a SABRE technology patent, is located or takes place in or on a space object in outer space then it is the object’s state of registry which has quasi-jurisdiction. The domestic law of the state of registry, including its IP law, applies in relation to the space object. If patent rights are not held in that particular state then there can be no recourse in relation to infringing activities carried out in or on the registered space object.

Comprehensive coverage

It is hard, if not impossible, for inventors accurately to predict which states may become ‘states of registry’ for space objects. The Registration Convention attempts to define the limits of the latter term by tying it to the notion of a ‘launching state’. However, this does little to simplify the task for the would-be patentee seeking comprehensive IP coverage for outer space.

It is not merely a case of adding up all the states within whose territory there are currently launch facilities and filing a patent application in each of them. The term ‘launching state’ is given a very broad definition in the UN treaties on outer space to include a state whose governmental or non-governmental entities launch or procure the launch of a space object or a state from whose facility (as opposed to territory) a space object is launched.

Though infrequent in practice, there could be as many as four separate states each regarded as ‘launching states’ for the purposes of a single launch into orbit. When this happens, those states must jointly determine which one of them will be nominated as the sole state of registry.

As there is no obligation to register prior to launch (indeed registration often occurs some time after the event) it could be a matter of guesswork which state will register a new quasi-jurisdictional enclave in space. In theory at least, the state of registry could be purposely chosen so as to avoid any jurisdiction in which IP rights are held.

This might seem like an extravagance but paper registration in a state with minimal regulatory oversight of space objects held on its registry could have distinct benefits for a commercial entity which procured the space object’s launch.

The spectre of ‘flags of convenience’ (a legal phenomenon usually associated with maritime law) hangs over the future of commercial space activity.

The landscape for IP in space is even more complicated when it comes to modular space objects which are the result of international collaboration such as the ISS. Each module of the ISS is carried on the registry of the state which contributed it. As ISS personnel cross between the modules, so they cross from one legal jurisdiction to the next.

Prior to the opening up of outer space to the private sector it might have been sufficient to target certain key space-faring states when it came to devising an IP strategy for innovations with space applications. To this end, ESA and NASA typically filed their patent applications with the European Patent Office and US Patent and Trademark Office. This would have accounted for a decent number of the quasi-jurisdictional enclaves in existence at the relevant time.

The birth of private industry-led space exploitation has brought about a significant change. Commercial entities operating out of a far greater number of the 102 state parties and 27 signatories to the Outer Space Treaty 1967 are seeking to engage in commercial space activities.

Even if one views the prospect of space objects using flags of convenience with a certain amount of scepticism, there is undoubtedly a greater variety of states called upon to act as states of registry with a correspondingly broader range of quasi-jurisdictional enclaves being created in space.

Among the 25 states to register space objects so far this year are North Korea, South Korea, Mexico, India, Brazil, Thailand and Azerbaijan. For private sector innovators in the space industry it is becoming hopelessly expensive and unpredictable to obtain meaningful protection for intellectual creations intended for use in outer space.

This may ultimately damage the confidence of financial backers and reduce the flow of capital to ambitious companies like Reaction Engines seeking to develop cutting-edge technologies.