Exploring the Legal Frontier of Space and Satellite Innovation

For companies in the aerospace and defense industry, the future of space innovation involves far more than rockets and satellites. Intellectual property, technology transfers, data privacy, and life sciences are among the fields impacted by advancements in space. This Insight examines the legal and regulatory frameworks shaping the future of space-based commercial operations.

Go-No-Go for Launch: Who Authorizes Missions?

Today’s commercial space ecosystem in the United States operates under a “trifurcated” regulatory regime, with authority split among the Federal Aviation Administration (FAA), the Federal Communications Commission (FCC), and the US Department of Commerce. The FAA, through its Office of Commercial Space Transportation, licenses commercial launches and spaceports. The FCC authorizes satellite communications and foreign satellite landing rights. Meanwhile, the Department of Commerce, through National Oceanic and Atmospheric Administration’s (NOAA’s) Office of Space Commerce, licenses commercial imaging and has assumed responsibility for space traffic management.

However, these frameworks fall short of addressing the next wave of space activity: commercial lunar landings, asteroid mining, and orbital infrastructure such as fuel depots and space tugs. These activities push beyond traditional regulatory boundaries and expose a gap in mission authorization for non-traditional commercial space endeavors.

Looking ahead, several proposals for a more comprehensive regulatory regime have emerged. Some call for the FAA to serve as the lead agency, building on its safety-focused legacy. Others argue for the Department of Commerce to assume broader oversight, particularly in support of commercial space development. Competing visions range from a “hands-off” approach, as proposed by the House of Representatives, to a “safety-first” model, put forth by the previous presidential administration. Although no legislation passed in the previous Congress, a blended or hybrid approach may gain traction in future sessions.

Extraterrestrial Application of IP Law

Space isn’t just the final frontier—it is also a legal gray area for intellectual property (IP). As research and development in orbit grows more diverse, questions about jurisdiction, ownership, and enforcement are intensifying.

At present, IP in space is governed loosely under the Outer Space Treaty and national laws, with parallels to international maritime laws. Broadly speaking, the country that launches an object into orbit retains jurisdiction over it, allowing national IP laws to apply to inventions made or used aboard that object. Beyond that, the framework is murky.

Key challenges include the following:

• Jurisdictional ambiguity: Moving between national space objects or working in international collaborations can complicate enforcement.
• Insufficient treaties: Current IP agreements lack meaningful enforcement provisions in space.
• Commercial uncertainty: Companies must navigate fragmented rules while protecting IP across borders and objects.
• Need for harmonization: With declining international cooperation, prospects for multilateral IP reform remain limited.

In the absence of a unified legal framework, companies should proactively structure contracts to clearly define IP ownership, usage rights, and enforcement pathways, including fallback provisions tied to Earth-based jurisdictions. This also reinforces the importance of robust global patent and trademark strategies.

Space Technology Transfers

Much of today’s space technology originates in government labs, such as those managed by the National Aeronautics and Space Administration (NASA), the European Space Agency, and their equivalents. For years, these agencies have been working to commercialize innovations by licensing IP to private companies, supporting startups, and building infrastructure to ease market entry.

For companies seeking to leverage government-developed tech, licensing agreements should address the following:

• Scope and geographic reach: What is included, and where may it be used (e.g., “worldwide” vs. “in orbit”)?
• IP allocation: Who owns what, especially for improvements or joint development?
• Restrictions: What disclosure obligations, export controls, and flow-down clauses from funding agencies are involved?

NASA, for example, offers several licensing paths, each with its own fee structure and degree of exclusivity. These programs are typically open to international applicants, signaling opportunities for global players.

Privacy Issues for Data Centers in Low-Earth Orbit

As satellite operators explore deploying data centers in low-Earth orbit (LEO), they face new questions about privacy and jurisdiction. Driven by efforts to reduce latency, increase physical security, and align with various sustainability goals (such as the EU-funded ASCEND project), LEO data centers are moving from concept to reality. Several companies plan launches between 2025 and 2027.

However, there is no international treaty specifically governing data privacy in space. Instead, applicable rules depend on a combination of factors, including the following:

• Launch country liability: The country and/or state from which a satellite is launched may bear primary legal responsibility under its own laws.
• National and transnational privacy laws and guidelines: Extraterritorial laws such as the European Union’s General Data Protection Regulation or the California Consumer Privacy Act may apply based on whose data is being processed, and some multinational organizations, like the Organization for Economic Cooperation and Development and the Asia Pacific Economic Cooperation, have adopted nonbinding privacy protection guidelines for cross-border transfers and storage of data.
• US federal and state patchwork: Federal laws like the Health Insurance Portability and Accountability Act and the Gramm-Leach-Bliley Act may govern certain types of data. At the state level, disclosure requirements for data breaches vary widely.
• Contractual safeguards: In the absence of universal rules, private contracts and industry standards play an essential role in defining obligations and enforcement mechanisms.

Companies building or using LEO data infrastructure must account for data protection risks alongside traditional satellite-related concerns and be cognizant of the array of local, national, and international laws and regulations at play.

Legal Considerations of Life Sciences in Space

The microgravity environment of LEO has opened remarkable new possibilities for biomedical and pharmaceutical research, but legal and operational hurdles remain.

In a weightless environment, physical and chemical processes behave in ways that are different than on Earth. For example, without gravity-driven convection or sedimentation, diffusion becomes the dominant force, allowing researchers to isolate and study molecular behavior with greater precision. Crystals formed in microgravity tend to grow larger and more uniformly, offering advantages for drug formulation and materials science. Moreover, the absence of directionality enables experiments to be conducted in novel orientations, free from the constraints of “up” or “down,” which can simplify experimental design and unlock new research possibilities.

So far, these unique properties have enabled such advances as faster modeling of age-related and chronic diseases, development of more potent stem cells, production of drug crystals that are better for multiple formulations, and novel biofabrication methods, that allow for the development of multi-layered artificial retinas and other medical devices.

However, success depends on navigating a thicket of regulatory and logistical constraints:

• Export controls: Many spaceflight and biotech components qualify as dual-use technologies and may therefore fall under various export control regimes.
• Space agency approvals: International collaboration on the International Space Station (ISS) requires approval by the ISS’s program board and alignment with all partner nations.
• Infrastructure integration: Experiments must be compatible with spacecraft systems and lab modules, including power supplies and physical dimensions like size, weight, and volume.
• Cost and planning: Missions remain costly and require long-term coordination with tight timelines due to the limited number of launch opportunities.
• Federal regulatory uncertainty: The US Food and Drug Administration has yet to provide guidance on how it will assess products developed in or for space, which could extend the timelines for approval and actual clinical development of such products.

Safety is also paramount. The microgravity environment presents unique challenges for containment, ventilation, and managing chemical or radiation exposure. To address these complexities, companies should incorporate thoughtful risk mitigation strategies and establish clear contingency plans as part of their experimental design and operational protocols.

Conclusion

From launch licenses to lunar labs, space law is rapidly evolving to meet the demands of a fast-growing commercial sector. As new missions push the boundaries of science, privacy, and innovation, aerospace and defense stakeholders must proactively engage with emerging legal frameworks around the world. Whether licensing IP, safeguarding satellite data, or building the next biotech breakthrough in orbit, success in space will depend on a strong legal framework that keeps pace with emerging technologies and commercial ambitions.