Intellectual property rights are engines of innovation. The limited monopolies granted particularly by patents are conventionally acknowledged to be an important impetus in promoting invention.

Typically, those fields that endure huge upfront costs in development, for example, biopharmaceuticals, are especially incentivized by patents. In contrast, software development, which literally only requires a guy, his computer and the clichéd garage, is thought to be less incentivized by patents.

The International Space Station. Photo: NASA

It should come as a surprise then that space-tech, one of the fastest growing areas of innovation, and one that often has some of the highest risks and upfront costs may not be well protected by patents. It is not that there are no relevant laws, it is just that there are also vast loopholes in said laws that allow putative infringers to avoid infringement per se.

Consider, for example, a likely scenario—a foreign corporation develops a widget that infringes on numerous U.S. patents. The widget is sent into space via a Russian resupply ship, brought into the International Space Station (ISS) where it transits through the U.S. modules on the way to its final position in the European Module. Would this constitute an infringement of the U.S. patents? Would there be infringement if that widget was owned by a U.S. corporation? Would there be infringement if the widget was launched from the U.S.? Would there be infringement if the widget was a registered space object, as per international treaties, of Israel? Would there be infringement if an American company owned and launched the widget, but from a foreign jurisdiction? The answer to all of these questions are maybe, but arguably not.

Space, in general, represents an inherent problem for patents, as they are fundamentally territorial. A U.S. patent only protects the inventor from infringement in the U.S., and not from the exact same actions in say, Israel. There are no international patents. And, as the province of all mankind, space is axiomatically extraterritorial to all countries.

While some have called for international legislation, none have yet been promulgated. In the meantime, the U.S. has been extending its limited territorial reach both on Earth and beyond.

In 1972, the U.S. Supreme Court, in the Deepsouth Packing Co. v. Laitram Corp. case attempted a short-lived effort to put restrictions on the growing extra-territorial ambitions of U.S. patent law, ruling that even U.S. companies that export components to be assembled abroad into infringing devices, are not themselves infringing. Congress, in response, started an opposing trend that continues to this day in drafting legislation to extend the reach of patent jurisdiction, drafting a law that reversed the Deepsouth decision. This was further expanded by creating liability when a U.S. company imports a product assembled abroad using a process patented in the U.S.

In a decision reached just this past summer, the U.S. Supreme Court again broadened the extraterritorial reach of U.S. patent law. In WesternGeco LLC v. ION Geophysical Corp., the court found that regardless of the foreign location of the underlying putative infringement activity, if components of an infringing product are supplied from the U.S., the exporter of those parts can be held liable, even for extraterritorial lost profits of the patentee.

So, what happens in space? Actually, the law is relatively straightforward, albeit mainly for U.S. patents. 35 U.S. Code Section 105(a) specifically deals with patent infringement in outer space, again extending the territorial reach of U.S. law, in this case to “a space object or component thereof under the jurisdiction or control of the U.S.”

While no other country has similar legislation, such a legal position is arguably simply extractable from the text of the international space treaties. The U.S. position reflects a longstanding legal concept that has extended the reach of U.S. patents to U.S. flagged ships on the high seas for almost two centuries. In fact, given its obviousness, some have tried to read ulterior motives and interpretations into why it had to be specifically spelled out for U.S. patents in space.

The obviousness of the rules notwithstanding, there is still substantial uncertainty in the law. For example, the law only applies to infringement that occurs on U.S. registered space objects. There is no patent protection for infringement on celestial bodies or in the vacuum of space, i.e. the dominion of expensive rovers and satellites that incorporate many patented technologies.

Also, the U.S. space patent law has three exceptions to its authority, including, “any space object or component thereof that is carried on the registry of a foreign state.” This exception is a gaping loophole. Applying another legal concept from maritime law, a private company can effectively and easily skirt U.S. patent law in space if they register their spacecraft carrying the putative infringing device under a flag of convenience. As alluded to above, in customary international maritime law, legal jurisdiction over vessels on the high seas is often set by the law of the flag doctrine—legally, each ship grants jurisdiction to the particular country under which it is flagged, albeit not necessarily the country of origin. More specifically, this doctrine is frequently exploited with many ships registered to a handful of countries that have relatively permissive maritime regulations.

Applying these concepts in space, where the default of the various space treaties was to assign jurisdiction over space objects to the country from which they are launched and in which they are registered, a private corporation could conceivably register their spacecraft to a foreign country, as a convenience, and avoid the territorial reach of U.S. patent laws.

In another scenario, a U.S. company might launch infringing satellites without repercussion simply by registering these satellites to a foreign jurisdiction. A foreign-owned satellite could even be launched from within the U.S. without infringing per se due to the temporary presence doctrine which exempts a device of infringement liability when it is only transiting through a country where the device is patented, e.g., only for a space launch.

Another area where space infringement might be found is onboard the International Space Station (ISS) where the constant experimentation provides ample opportunity to both invent and infringe. In general, inventive and infringing actions on the ISS are deemed, by agreement of all parties, to take place under the jurisdiction to which that particular module of the ISS (USA, Russia, Japan, or Europe) is registered. Even with that relative clarity, the fact that so many national patent systems operate in close proximity could create confusion and the fear of infringement or, the alternative, the realization by the patent holder that it is easy to avoid infringing simply by moving the device over a couple of racks.

It remains unclear whether these uncertainties and loopholes have yet had an effect on space innovation, private space enterprises are still relatively young. Hopefully, the relevant jurisdictions will be able to figure it all out; it cannot be that hard, it is not rocket science after all.