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As commercialization of space expands, market opportunities and profitability will be shaped by additions and changes in laws that govern every aspect of space. This will include patents, real property rights, mineral rights, and tax incentives for space entrepreneurs.

 
The United States government encourages private parties to take the lead in space development, and the latest US philosophy reflects an increased reliance on commercial providers. 4Frontiers will strive to be at the forefront of these changes to capitalize on laws favorable to space commercialization. 4Frontiers enjoys the advantage of strategic relationships with several well known space attorneys.
 
The global space industry is expanding in directions unanticipated only a decade ago. Entrepreneurial space companies are changing the entire focus of commercial space. An industry once limited to satellite telecommunications is now seeing huge private sector investments in space transportation, personal (tourism) spaceflight, Earth-orbit logistics, and resource recovery. 4Frontiers is positioning for a significant role in the emerging space industry.
 

 
Homesteading The High Frontier 

Space Property Rights Discussion by Wayne White. Published in AdAstra Magazine. Fall 2005

In 2004, President Bush’s “Vision for U.S. Space Exploration” announced that the United States will return humans to the Moon before the year 2020, in preparation for human exploration of Mars and other destinations. So, soon space invaders won't just be a game you can play on your old Atari or on your o2 phone, it will be a real life action that humans will be making. The President’s Commission on Implementation of United States Space Exploration Policy subsequently recommended that Congress assure “appropriate property rights for those who seek to develop space resources and infrastructure.”

Resource appropriation and real property rights are two of the most controversial issues in international space law. This article discusses the legality of resource appropriation and analyzes the three basic approaches that have been proposed to address the issue of real property rights in outer space.

The law which governs property rights and resource appropriation is the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, Including the Moon and Other Celestial Bodies, commonly known as the Outer Space Treaty. This treaty entered into force with respect to the United States on October 10, 1967, and a total of 98 nations are now party to the Agreement.

While the Outer Space Treaty does not directly address the issues of property rights and resource appropriation, Article I says that outer space shall be free for exploration and use (emphasis added). This provision is relevant to the issue of resource appropriation. Article II of the treaty prohibits “national appropriation.” This provision is relevant to the issue of property rights.

Most space lawyers agree that the intent and meaning of Article II is to prohibit national control of territory or territorial sovereignty. Virtually all space lawyers agree that this provision prevents parties to the treaty from granting or recognizing titles to territory.

This author and others have noted that Article II of the Outer Space Treaty does not prohibit “private appropriation.” Because private appropriation is not prohibited, and because Article I says that outer space is free for “use,” many lawyers believe that commercial mining of space resources is legal under the treaty. The analogy that space lawyers most often cite on this point is commercial fishing in international waters: although no one owns the oceans, individuals and corporations can catch seafood and sell it for a profit.

The earliest proposals for laws to govern resource appropriation and property rights involved creation of an international body to regulate these activities. In the 1970’s UN COPUOS delegates negotiated a treaty to implement this approach, commonly known as the Moon Treaty. This treaty opened for signature in 1979. The Moon Treaty prohibits property rights and declares celestial bodies and their natural resources “the common heritage of mankind.” The only way that spacefarers can utilize resources or obtain protection of their property rights is under the auspices of an “international regime” which would be established by the Treaty. The international regime would effectively tax space activities and give a portion of the proceeds and technology to countries that do not invest in space development or settlement.

The L5 Society, a predecessor organization of the National Space Society, hired a lobbyist and vigorously opposed the Moon Treaty in the United States. The United States and the U.S.S.R never ratified the treaty, and many other nations followed suit. Only 11 nations are party to the Moon Treaty, and the international resource regime has never been established.

International regulation is regarded as untenable from a commercial perspective. If the Moon Treaty’s resource regime were established, many of the regime’s members would represent non-spacefaring countries with no incentive to make rational business decisions, and every incentive to plunder activities for income and technology transfer. Space development and settlement are risky and expensive enough without the added burden of international taxation and control.

Fortunately, the Moon Treaty has not achieved the widespread acceptance that it needs to be effective. The UN COPUOS Legal Subcommittee has also repeatedly failed to reach agreement to discuss a new comprehensive space treaty. So it appears that for the foreseeable future the UN COPUOS will be unable to reach consensus regarding international regulation of space resources.

A second approach to property rights would confer permanent titles to territory without requiring the actual presence of people or facilities in the areas where title is conferred. This broad category includes: 1) purveyors of “space deeds,” 2) a United States citizen who believes that the treaty’s prohibition of permanent property rights is unconstitutional, 3) proponents of other proposals which would grant title to large, unoccupied areas, and 4) people who believe that the Outer Space Treaty is so incompatible with commerce and settlement that spacefaring nations need to abandon the treaty and make territorial claims.

In 2004, the International Institute of Space Law (IISL), a non-profit organization headquartered in Paris, published the first position paper in its 47-year existence. The “Statement by the Board of Directors of the International Institute of Space Law On Claims to Property Rights Regarding the Moon and Other Celestial Bodies” says that Article II of the Outer Space Treaty excludes all territorial claims to outer space, including claims by individuals and corporations. The paper also says that Article II effectively prohibits nations from enacting legislation “on a territorial basis (emphasis added) to validate a ‘private claim’.” Finally, the paper says that “sellers of [space] deeds are unable to acquire legal title to their claims. Accordingly, the deeds they sell have no legal value or significance, and convey no recognized rights whatsoever.”

Significantly, the paper says that “to comply with their obligations under Articles II and VI of the Outer Space Treaty, States parties are under a duty to ensure that, in their legal systems, transactions regarding claims to property rights to the Moon and other celestial bodies or parts thereof, have no legal significance or recognised legal effect.” So the IISL is calling upon nations to invalidate space deeds and other spurious claims.

As the IISL paper indicates, the international space law community has grown increasingly concerned by the sale of space deeds. Space lawyers are concerned that some purchasers may be defrauded by assertions that these deeds confer legitimate title. Space lawyers are also concerned that deed purchasers may file lawsuits to challenge the right of spacefarers to occupy their alleged property.

The next case in this category is a constitutional challenge. In 2003, Gregory Nemitz registered a claim to Asteroid 433 Eros. Mr. Nemitz registered his claim on the Archimedes Institute’s website. The Institute established a registry as part of an effort to inform the public about space law, but the Institute denies any claims to territory on its own behalf, and does not take any position regarding the validity of claims on its registry.

After Nemitz registered his claim, NASA landed the NEAR Shoemaker spacecraft on Eros, and Nemitz submitted an invoice to NASA for parking and storage fees. NASA and the State Department denied Nemitz’ claim. In a letter to Nemitz, a former General Counsel of NASA said Nemitz’ “individual claim of appropriation of a celestial body (the asteroid 433 Eros) appears to have no foundation in law. It is unlike an individual’s claim for seabed minerals, which was considered and debated by the U.S. Congress that subsequently enacted a statute, The Deep Seabed Hard Mineral Resource Act, . . . expressly authorizing such claims. There is no similar statute related in outer space. Accordingly, your request for a ‘parking/storage fee’ is denied.”

Nemitz then filed a lawsuit, arguing that the United States had taken his property without just compensation. The government filed a Motion to Dismiss, and the Federal District Court for the District of Nevada granted the Motion. The Court said that Nemitz did not prove that he had any property rights, so there was no basis for compensation. The Court also ruled that “neither the failure to [sic] the United States to ratify the . . . Moon Treaty, nor the United States’ ratification in 1967 of the . . . Outer Space Treaty, created any rights in Nemitz to appropriate private property rights on asteroids.” Nemitz appealed the case to the Ninth Circuit Court of Appeals, and that court affirmed the lower court’s dismissal of the case “for the reasons stated by the district court . . . .”

The Court of Appeals and the District Court did not certify their opinions for publication, which means that the rulings do not establish a binding legal precedent for future cases. However, the lower Court’s ruling and the opinion of the former General Counsel of NASA seem to indicate that the United States government and the federal courts will not recognize any sort of real property rights in the absence of enabling legislation.

Next in this category are two legislative proposals. The Lunar Settlement Initiative does not require purchasers of property to actually inhabit their one-acre parcels either before or after they acquire title, and purchasers may buy an unlimited number of one-acre parcels. The Space Settlement Prize Act says that “the ratification failure of the Moon Treaty means there is no legal prohibition in force against private ownership of land on the Moon, Mars, etc., as long as the ownership is not derived from a claim of national appropriation or sovereignty . . . .” “For property rights on the Moon, Mars, etc., the U.S. will have to recognize natural law’s ‘use and occupation’ standard rather than the common law standard of ‘gift of the sovereign,’ because sovereignty itself is barred by existing international treaty.” The Space Settlement Prize Act would then grant ownership of up to 600,000 square miles to the private entity that establishes the first lunar settlement, and up to 3,600,000 square miles to the private entity that establishes the first settlement on Mars.

Both of these proposals violate the terms of the Outer Space Treaty. The IISL paper says that “according to international law, and pursuant to Article VI [of the Outer Space Treaty], the activities of non-governmental entities (private parties) are national activities. The prohibition of national appropriation by Article II thus includes appropriation by non-governmental entities (i.e. private entities whether individuals or corporations) since that would be a national activity.” Alternatively, this author would say that nations party to the Outer Space Treaty only have jurisdiction over space objects, personnel and a limited safety zone, so they have no authority to grant or recognize property rights in unoccupied areas. Either analysis would render these proposals legally invalid.

Finally, there is no precedent in terrestrial law for granting or recognizing property rights without a physical presence. The Space Settlement Prize Act attempts to circumvent the prohibition against territorial claims by invoking the natural law theory of property rights. That theory requires that claimants “mix their labor with the soil” in order to establish property rights, but the Space Settlement Prize Act does not require actual occupation or physical improvement of an area before title is granted. So this proposal does not even satisfy the requirements of the legal theory that it is predicated upon.

Some people say that the spacefaring nations should withdraw from the Outer Space Treaty and make claims of territorial sovereignty. Pursuant to its terms, any state party may withdraw from the Outer Space Treaty with one year’s notice. However, there are many reasons why spacefaring nations should not take that course of action: (1) withdrawal from the treaty, followed by territorial claims, would almost certainly lead to strong political opposition from the non-spacefaring nations; (2) history shows that competition for territorial claims leads to armed conflicts; (3) prohibiting territorial sovereignty makes the transition to self-governance far easier for settlers once they become self sufficient; (4) having properties which are subject to different national laws in close proximity to each other would lead to competition between national legal systems, and that in turn will lead to more favorable laws; (5) the treaty has no provisions for taxation, technology transfer and expensive governing bodies; and (6) there is little in the treaty that is really objectionable. For the most part the treaty lets nations govern their own activities, subject to general principles that they already subscribe to.

A third approach to property rights is to adopt a system consistent with the terms of the Outer Space Treaty. From 1983 to the present, this author has written a series of 10 academic articles addressing the issues of resource appropriation and real property rights. In those articles, the author proposes that the United States and like-minded nations enact national legislation, and possibly a treaty, establishing a system of property rights which would not violate the prohibition against territorial sovereignty in the Outer Space Treaty.

This proposal would only grant title to entities that actually occupy outer space, and property rights would only encompass the area actually used, plus a safety zone. Property rights would only be valid for as long as people and/or facilities occupy the area. Properties could be sold, inherited and mortgaged in the same manner as terrestrial properties. Participating nations would honor other nations’ property rights pursuant to reciprocity provisions in their property statutes. This approach follows the example of the deep sea mining acts that the United States, the United Kingdom, France, Germany, and Japan enacted in 1981 through 1983.

In this author’s opinion, the best course of action is for the spacefaring nations to enact legislation which provides for property rights without territorial sovereignty. Three highly respected space law and policy professors have written articles which state that this approach is legal under the Outer Space Treaty. Recent academic articles also indicate that the approach would receive support outside the United States.

Countries are competing to attract commercial space business, and the spacefaring nations must meet that challenge or lose business to flags of convenience. In 2004, the Isle of Man, a dependency of Britain located between Britain and Ireland, enacted a law eliminating all corporate taxation of space companies. A very credible source with first-hand knowledge says that at least one and as many as three non-spacefaring nations will introduce legislation during the coming year that includes some form of space property rights. Surely the time has come for the spacefaring nations to meet the competition and enact legislation that that promotes commercial development and settlement in a manner which is fair to all nations.
 
"Remember this: once the human race is established on more than one planet and especially, in more than one solar system, there is no way now imaginable to kill off the human race." - Robert Heinlein, speech at World Science Fiction Convention, 1961
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