🚀 How Contracts Are Launching Space Markets
The body of space law is built up around international agreements but, as space is increasingly commercialized, contracts are becoming an important part of the legal framework that supports private activities beyond our world.
Meet the expert: This piece comes from superstar human spaceflight attorney and friend of Lawtrades, Megan Sieffert. Megan is Spaceflight Counsel, Associate GC, at Axiom Space, a new space start-up that’s become a major player in commercial space activity. Her accomplishments include negotiating the first agreement with NASA for the right to fly a fully commercial crew to the International Space Station. Here she shares her wisdom on the past, present, and future of legal agreements for lower earth orbit.
1969-2022: From space race to space economy
Our relationship with space has changed dramatically since we watched Neil Armstrong step onto the moon on our square, antennaed televisions back in 1969.
Axiom is planning a private space station.
Civilian crews are piloting space missions.
American Apparel is making astronaut flight suits.
To accommodate the rapid development that has taken place, the framework for conducting commercial activities while in orbit has been allowed to evolve. Space transportation is regulated by the Federal Aviation Administration while regulation of commercial activities depends on the location where such activities occur. Companies like Axiom Space are exploring what rules and laws evolve around marketing, research, and development activities conducted in orbit for profit. The answer now largely points to written and social contracts.
1998: No profits on the ISS
The International Space Station may be the most expensive structure ever built.
The first section of the ISS was launched in 1988.
In January that year, 15 governments signed the Intergovernmental Agreement.
The Intergovernmental Agreement stated the intention that the ISS enhance not only scientific and technological endeavors but also commercial ventures in space. And yet, the ISS could not be used to turn a profit.
The reason for this lies in the ISS Crew Code of Conduct. The Code applies to all individuals approved for flight to the ISS (Not you, Mark Watney. Space pirates are exempt.) and acts as an ethical framework for living and working on the station. It states that:
“ISS crewmembers shall refrain from any use of the position of ISS crewmember that is motivated, or has the appearance of being motivated, by private gain, including financial gain, for himself or herself or other persons or entities.”
That left governments and space agencies scratching their heads. How do you develop the space industry and regulate it when commerce is specifically forbidden?
2017: Commerce in low Earth orbit
Low Earth orbit (LEO) is the area in which the ISS and most satellites are located.
It is roughly 200-1600 km above the surface of Earth.
LEO satellites circle the planet 12-16 times a day.
In 2017, NASA ditched the not for individual profit approach and made a plan to increase its commercial presence in (LEO). The plan allowed ISS crewmembers to do approved commercial activities which NASA designated as “duties”. It opened the doors for private astronauts to participate in missions to the ISS.
Companies were then able to compete for flight opportunities to take crews to the ISS. A unique contractual arrangement called a FAR contract under U.S. procurement law was used to enable private companies to barter with the U.S government and coordinate the activities of private astronauts.
The “duties” loophole and the use of FAR contracts were game-changers because they:
Allowed other entities besides the government to access the ISS.
Allowed the government to work with private astronauts aboard the Station to conduct commercial activities on their behalf.
Allowed entities on the ground to sign agreements to send science and payloads to the Station.
And so the commercialization of LEO took flight.
2022 and beyond: Harmony and extraterrestrial paella
Companies keep finding innovative ways to monetize space.
There’s a special espresso machine for the ISS.
You can buy beer that has been to space.
700 people have purchased tickets on Virgin Galactic commercial space flights.
Fascinating relationships form around the common goals of the ISS, namely harmony and cohesion. One of the most interesting elements of being an attorney involved in the commercialization of LEO is engaging with the legal framework used to support partnerships in this area. The Axiom mission connected lots of people including:
Think Food Group who offered shared paella to crewmembers onboard the station while enabling new in-flight fine dining experiences.
Children from around the world who collaborated to form a piece of artwork incorporated into an NFT minted from space.
Friends and families from Canada, Israel, Spain, and the United States who joined at the Kennedy Space Center to cheer on the crew for launch.
All of this is to say that as the world starts building new markets in space, contract attorneys will pave the way for the rules, guidelines, and conduct for any participants who seek to participate in commerce beyond our world.
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