How can Thales use Space Rider IP for Rev-1?

How can Thales use Space Rider IP for Rev-1?

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In October 2022, Space Cargo Unlimited published a short announcement video for its REV-1 space factory. This was followed by a full announcement from project partners Thales Alenia Space in December. The aim of the project is to develop and operate a platform capable of supporting manufacturing and microgravity research in orbit and returning the results of those operations back to Earth. Thales Alenia Space will be responsible for developing and building the spacecraft while Space Cargo Unlimited will own and operate the vehicle.

One of the most notable elements of the REV-1 concept is its similarities with the ESA Space Rider vehicle. In fact, REV-1 will utilize a modified Space Rider Re-Entry Module for its return vehicle. This revelation had many questioning how Thales Alenia Space was able to utilize the work it was doing as co-prime on the Space Rider project under contract for ESA with funding from the European public in a separate competing commercial system. Well, the answer, I discovered, is in ESA’s rules on information, data, and intellectual property.

In the late 1980s, ESA realized that there was a need to standardize its intellectual property provisions into a single document which was first published in 1989. This initial document was revised two years later into what is its most recent iteration, which was then adopted by the ESA Council on 19 December 2001.

Although the rules are spread over more than 20 pages with a number of provisions and exceptions, the basic principle behind the document is that information, data and intellectual property developed by Agency staff in the course of their duties is owned by the Agency and that information, data and intellectual property originated by a Contractor to the Agency is owned by the Contractor.

As a result, in the case of Thales Alenia Space, the company is allowed to utilize the IP it created for the Re-Entry Module of Space Rider to fast-track the development of REV-1. Additionally, all the subcontractors involved in the development of the Space Rider Re-Entry Module are equally allowed to supply the IP that they developed for the vehicle to this new project. In fact, Thales Alenia Space may even see the Space Cargo Unlimited deal as a means to ensure that the company is adhering to ESA IP rules.

Although the contractor does own IP rights resulting from its contract with ESA, the contractor is required to use reasonable endeavour to exploit IPR so as to promote space research and technology. ESA contracts state that if a contractor does not intend to exploit the IP created, it is required to assign the rights to a third party under favourable terms. If the contractor fails to do so, the contractor can be required to assign the rights to the agency free of charge. It’s a case of use or lose it and Thales Alenia Space would prefer to use it would appear.

Although the REV-1 question is essentially answered above, my review of ESA’s rules on information, data, and intellectual property turned up a few other interesting provisions.

Although it won’t apply to this case, there is also potential for fees that a contractor can be required to pay ESA if its exploitation of IP is utilized for an application outside the jurisdiction of participating states or for non-space-related applications within ten years after the date of final acceptance of the work performed under the contract. There is, however, a distinct difference between fully funded contracts and partially funded contracts.

The fee requirement appears to only apply to IP created as a result of fully funded contracts. The criteria for applying, calculating, reducing, and exceptionally waiving such a fee are supposed to be made public by the agency. In order to track IP exploitation and potential payable fees, ESA requires the contractor to provide it with written reports.

The value of fees contractors are required to pay are based on the value of each transaction with all relevant circumstances taken into account. Additionally, the total fee to be paid to the agency cannot exceed the total paid to the contractor to develop the IP. This means that ESA is ever only allowed to get as much out as the agency put into a project.

Although contractors do retain ownership of all IP created as part of an ESA contract, the agency, participating states, academic and research institutions, and even third-party entities do have a right to access the IP under certain terms.

In circumstances where IP is created under a fully funded contract, ESA, participating states, and any person or body under their jurisdiction have a right to a free worldwide licence when executing the agency's own requirements “in the field of space research and technology and their space applications.” This ensures that all IP developed for ESA with funding from the European public is available to the agency if and when they wish to exploit it.

Academic and research institutions also have the right to a free licence provided that it will be used solely for scientific research purposes and that its use is not contrary to the contractor's legitimate commercial interests.

When executing a participating state's own public requirements, participating states and any person or body under their jurisdiction have the right to “favourable conditions” when taking advantage of a contractor's IP.

The final category is any third-party wishing to exploit the IP. This category will be required to obtain the IP within “market conditions” provided that the contractor agrees that the use is not contrary to its legitimate commercial interests. This seems very broad. I’d bet that a company could argue just about any use of its IP is contrary to its legitimate commercial interests.

In circumstances where IP is created under a partially funded contract, ESA still enjoys access to the IP free of charge. Participating states, however, are required to access the IP on conditions reflecting the contractor's financial participation. There doesn’t appear to be any provisions for academic and research institutions accessing IP created under a partially funded contract.

The agency, for its part, appears to be supportive of the Thales Alenia Space/Space Cargo Unlimited partnership and likely views it as an effective use of the Space Rider Re-Entry Module IP.

“We are aware of the Thales Alenia Space Italy partnership with Space Cargo Unlimited (REV1) and we consider it as a potential evolution of the Space Rider Re-Entry Module platform,” an ESA spokesperson told European Spaceflight. “Space Rider is certainly the starting point for REV1 and for several initiatives for the emerging LEO commercial applications market, and we aim at finalising asap the first launch and demonstrate its capabilities.”

ESA’s rules on information, data, and intellectual property are, as described under the document’s general principles, “internationally recognised as the most appropriate and effective means of ensuring that [intellectual property] value is preserved and that it is effectively exploited.” I am certainly no expert in IP law and, as a result, cannot speak directly to how appropriate and effective it is. However, I do appreciate that the agency has attempted to balance the need to allow European institutions to access IP created with public funding while ensuring European industry can remain globally competitive.

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