Intellectual property challenges in the space economyby Phil Merchant
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| To what extent can a granted patent be enforced as an object is manufactured, launched into space, and then used for downstream activities? |
A granted patent in any technology field is highly desirable: it can be enforced by its owner against competitors, can increase the likelihood of securing investment, and can be used for corporation tax relief (e.g. via the UK Patent Box scheme). Given the recent increased appetite for commercialising space, it is perhaps no surprise that interest in patenting of space technologies has significantly increased in recent years.[1,2,3]. For example, US patent applications in space tech have risen by 144% since 2003, compared to a 37% increase across all technology fields.[1] Some specific sectors have been highlighted as growth areas, such as in Earth-based remote sensing and in quantum technologies.[3]
However, the space industry poses an interesting consideration for those seeking to protect their IP. Much innovative space technology that is protected by patents is deployed and used in outer space, which is not part of the territory of any country on Earth. By contrast, patent law frameworks are terrestrial by nature, with geographical limitations on the enforcement of a granted patent.
This apparent incompatibility has sparked much discussion[4] among IP professionals about just how far patent protection (and IP more generally) can extend in the space industry. To what extent can a granted patent be enforced as an object is manufactured, launched into space, and then used for downstream activities? The answer to this question can have important implications for a patent filing strategy and associated costs.
For on-Earth activities, there is more certainty: infringement can be largely assessed in the same manner as other technical fields. Granted patents can be enforced in the country of patent registration, and patentees can prevent competitors from undertaking acts with respect to the invention, such as manufacture, use, or sale.
For example, for the upstream, a patented electrical thruster design can be enforced against manufacturers operating in the country of the patent. For downstream activities, similar considerations apply. For example, if a patentee owns a UK software patent covering the processing of satellite data, then this can be enforced against competitors processing their data in the UK.
For protection of outer space activities, the situation is less certain due to the territorial considerations of space set out above.
One specific answer can be found in the ISS Intergovernmental Agreement. This agreement includes Article 21, on Intellectual Property, which states that activities taking place inside an ISS partner module may be deemed to take place within the territory of that ISS partner state. Thus, national patents may be enforced against infringing acts taking place on ISS modules. However, actions on the ISS form only a very small part of the wider space economy, particularly the actions of many NewSpace companies.
| The retained jurisdiction and control provided by the Outer Space Treaty can serve as a means to extend terrestrial patent laws into outer space. |
For the general case, a path forward might be found in reference to international law. Under the Registration Convention, space objects launched into Earth orbit are registered on the local registry of the Launching State. The Outer Space Treaty of 1967[5] further stipulates that the Launching State “shall retain jurisdiction and control” over the registered space object.
It has been argued that the retained jurisdiction and control provided by the Outer Space Treaty can serve as a means to extend terrestrial patent laws into outer space. As a result, inventions made or used in outer space on a registered space object might be considered to be made or used within the territory of the Launching State. The United States has specifically legislated along these lines.[6]
However, to our knowledge, the US is the only country to have specifically addressed outer space activities in its patent law. It is currently not clear which countries may similarly allow extension of their patent laws. It is also unclear whether international law and existing domestic legislation is sufficient, or whether additional legislation would be necessary to clarify the position. It will depend on how the law is interpreted in each country, and to our knowledge this has not yet been tested.
At present, practical enforcement of patents will likely remain focused for on-Earth activities (after all, all in-orbit systems have some origin on Earth.) Patents could be enforced against in-orbit activities indirectly by enforcement against the Earth-based systems and methods necessary to achieve the in-orbit operation. For example, a patent to a new satellite thruster can be more practically enforced at the point of manufacture rather than when it is in orbit.
However, it is unlikely that the uncertainties regarding space technology and IP will remain unaddressed for long. There is increasing commercial attention on in-orbit activities in the space sector, such as in-orbit manufacturing of pharmaceuticals and semiconductors, or on-satellite AI processing of data. As these highly valuable fields of technology mature, more certainty regarding the application of patent law specifically to outer space may become necessary.
For now, a prudent long-term IP strategy for space sector companies would be to (i) protect on-Earth activities by obtaining IP protection in countries where you anticipate your invention being made, used, or sold; and (ii) seek protection for in-orbit activities by obtaining patents in major launching states, including the US. This would not only be in recognition of existing US law, but also in anticipation of other countries potentially following their example.
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