Going beyond the IP horizon and interacting with space law
Article | January 10, 2022
Going beyond the IP horizon and interacting with space law
Going beyond the IP horizon and interacting with space law
Introduction
Over the past few decades, the world has seen dizzying advancements in technology. By way of example, Australia only connected to the Internet in 1989 – now it’s impossible to imagine life without it. But perhaps the most exciting development in recent years is the rapid and accelerating commercialisation of space.
Until recently the launch costs to get to space have been so prohibitively expensive that only a handful of large, government funded organisations could perform such activities. However, with the gradual privatisation of space, launch costs are no longer such a barrier to market entry. As an example, the Space Shuttle of the past had a launch cost of about $20,000/kg of payload. This reduced to about $7,000/kg for the Soyuz-FG rocket, and the new reusable Falcon 9 rocket by SpaceX has a launch cost of about $2,000/kg of payload.
The lower launch costs have triggered an explosion of companies that are involved in the space economy. Activities such as manufacturing in space, mini satellites (known as cubesats) to provide expanded internet coverage and Internet of Things (IoT) infrastructure, space mining and more, have either been deployed or are in development.[1]
Although the costs of launch have dropped significantly, the R&D costs in developing technology for space exploration and utilisation remains very high – this means that the underlying intangible assets, including intellectual property (IP), must be well protected. But space law does not allow for the straightforward application of IP. It requires a fresh look at how IP laws are used to protect space-related activities.
Space Law
The Outer Space Treaty was established in 1961 during the Cold War. There are now numerous treaties and agreements that collectively define “space law”. Space law means that outer space and celestial bodies and free for exploration and use by all States in conformity with international law and not subject to national appropriation. In short, no one nation may claim ownership of outer space or any celestial body.
Of the numerous articles of the Outer Space Treaty, Article VIII is perhaps most relevant to the protection of space-related technology. Article VIII defines that the States on whose registry such an object is carried shall retain jurisdiction and control over that object, and any personnel thereof.
The 1975 Convention on the Registration of Objects Launched into Outer Space (the 1975 Convention) also impacts the protection of space-related technology and defines the “launching state” as either:
- a state who launches or procures the launching of the space object; or
- a state from whose territory or facility a space object is launched.
IP Laws
IP laws and generally all laws governing intangible assets are jurisdictional-based and operate within defined boundaries. Since the initial development of IP laws, these laws have served the world with providing suitable protection regimes for technology. Where IP laws falls short is where IP is to be exploited in areas where the jurisdictional boundaries become unclear.
The space problem
Space law determines how activities in space are to be operated and the laws under which such activities are governed. However, because space law means no one country can lay jurisdictional claim in space, the jurisdictional boundaries of IP laws becomes limited or potentially non-existent. Ultimately, space law was founded on the principle of the good for all, whereas IP laws were founded on the principle of the good for the owner. This creates a clear tension between space law and IP laws.
Contrary to common belief, jurisdictional laws on earth do extend into space, but they’re different to that on Earth.
The issues of IP laws in space stems from Article VIII of the Outer Space Treaty and the 1975 Convention. Issues such as the State registration of the object sent to outer space, and where the “control” point of the object is, need to be considered when protecting space-related technology. The notion of the “control point” is complex and explored further below.
Article VIII declares that the state which registers a space object has jurisdictional control of that object. For example, if a space object was registered in Australia, the laws of Australia would govern that object including any of the IP of the object itself. Extending this further, any intangible assets, including IP, that is generated in space on the object registered in Australia would also be generated under Australian law. This has implications for inventions made or performed in space, such as manufacturing in space.
Flags of convenience in space
Things become more complicated once the 1975 Convention is taken into consideration. The jurisdiction of the “launching state” of Article VIII is determined by the 1975 Convention. The Outer Space Treaty does not account for the formalities of registration which may present “flag of convenience” issues, similar to those seen in the maritime industry. For example, consider where a jurisdiction in which a space object owned by a company is registered in differs to the company’s principle jurisdiction of practice. This situation could be exploited to help evade laws and regulations (e.g. IP laws) of the principal jurisdiction.
The launching state is also determined by the control point of the party named as the registrant (e.g. the control point of the procurement or launching). The problem is that it is not clear what control means, with “control” potentially covering a wide variety of situations. For example, a company registered in a first jurisdiction could set up a subsidiary in a second jurisdiction and license a launch facility in a third jurisdiction. The jurisdiction in which a space object is registered depends on where the control lies, which in this example may be the first, second or third jurisdiction.
The result of the 1975 Convention is that infringement of a competitor’s patent may be avoided by simply registering the potentially infringing activities in a jurisdiction other than where the competitor has patent rights.
Formulating your protection strategy
For those looking to exploit their intangible assets for space-related technology, there are two main considerations:
- the jurisdictions in which the technology is to be used; and
- the jurisdictions in which the technology sent into space could be controlled from.
An intangible asset protection strategy for (1) would be similar to an intangible asset protection strategy that is currently used for earth-bound technology. However, the intangible asset protection strategy for (2) requires careful consideration and must have a greater contextual understanding of the proposed commercial activity. For example, instead of narrowly focusing just on IP, such as patents, for (2), a holistic view of the intangible assets that make up and surround the technology needs to be considered as a mixture of protection strategies may be required, such as a combination of trade secrets and patents.
The way space-related technology needs to be protected is unlike earth-bound technologies and requires you to look at space law, the limitations of IP laws, and consider all of the intangible assets of the technology. In short, protection of space-related technology needs to be achieved in the aggregate and not by using just one protection regime.
Further Resources
If you would like more information on this emerging area of law, feel free to listen to a Podcast Stefan Paterson did with Lawyers Weekly about this subject.
