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Saturday 19 April 2014

andrew rush commentary


The Worldwide Rights are Not Enough

by andrew rush

Pierce Brosnan declared the plot of his 1999 James Bond film The World is Not Enough convoluted and mystifying, a suitable description of Cold War villain-based movies more than a decade after the Cold War had effectively expired from hypothermia. At first glance, “convoluted and mystifying” is also an apt description for licensing deals. The beauty of a license is also its curse.

You can make the license look almost any way you want, granting virtually unlimited rights or giving only the slimmest of rights to use the covered invention in Palatka, Florida on the 3rd Tuesday of every month. It is extremely important to consider each and every word in a license agreement in terms of how the technology involved will actually be used.

The RCS Thrusters on the Lunar Lander from the Spollo Era. - Image Credit: NASA

For example, consider the following language that might appear in an R&D contract for the development of a new type of RCS thruster for satellites: the Satellite Manufacturer “shall retain a nonexclusive royalty-free license [to the developed technology] throughout the world.” What good does a merely worldwide license for a new RCS thruster do a satellite manufacturer? They need a license that actually applies to where they will use the developed technology: outer space.

Most intellectual property licensing agreements define the territory in which the license can be used. Non-exclusive licenses may grant rights to use the covered invention in limited territories (e.g. rural Florida towns, the Asia, North America). Non-exclusive licenses of this type may be more desirable for the party receiving the license because the license costs less to acquire and/or maintain. For the party granting the license, they have the opportunity to find other people to sell licenses to, providing additional revenues. A win-win situation!

Many licenses are “exclusive” and grant the ability to use an invention “throughout the world.” But is that really an exclusive license? For most intellectual property licensing agreements, the technology involved will be used, at most a few miles above the our planet’s surface, but for aerospace technologies, the allegedly exclusive nature of a license granting “worldwide” rights gets a bit dicey around the ionosphere because at some point the world ends, and space begins.

There is no recognized definition of where space begins. The Patents in Space Act (35 USC §105), specifically applies US patent law to public and private US spacecraft in outer space, therefore patent holders potentially have patent rights that exist beyond our planet. A patented satellite RCS thruster, like the one in the above example can be licensed for use both on the planet and in outer space, however many licensing agreements only grant rights on a worldwide basis. Failure to grant rights for using an invention in space leaves the inventor (or the company the inventor is employed by) with patent rights to the invention when it is used in outer space and potentially makes the licensee an infringer if they use the invention in outer space.

Space hardware patent holders must ensure that license agreements with NASA enable use of the technology in space as well as on Earth. - Image Credit: NASA

Many existing licenses only address Earth-based rights. For example, Creative Commons licenses grant worldwide, royalty-free licenses. FAR provisions in SBIR contracts and sample NASA licensing agreements also address only worldwide grants of intellectual property rights. It should be noted that NASA negotiates licenses of its patented technologies on a confidential case-by-case basis, therefore terms of noted commercial space licensing agreements such as Bigelow Aerospace’s licensing of inflatable space habitat technology are unknown at this time.

One assumes that those licensing agreements specifically address universal licensing rights. By contrast, the entertainment industry has moved toward granting intellectual property rights “in all media, throughout the universe.” Companies such as NBC, PBS, and Lucasfilm Ltd have begun to include licensing terms which apply both on earth and in outer space by adopting similar language. Licensing agreements granting rights “throughout the universe” more directly address the needs of companies operating satellites, space components, and orbital and suborbital launch vehicles.

In order to ensure your company can freely use all the necessary technology to accomplish its goals, make sure intellectual property licensing agreements specifically apply everywhere you and your company foresee utilizing the technology, including outer space, because when it comes to aerospace technologies, worldwide rights are truly not enough.

Andrew Rush is a patent agent at PCT Law Group. He publishes the blog IPinSpace, where the vastness of space, law, and intellectual property meet.

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