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What just happened?

Jeff Bezzos has publicly backed the safety and commercial viability of his Blue Origin space flights and has decided to be a passenger as it goes orbital. “I am leaving for space! I will take this journey with my brother. The greatest adventure, with my best friend”.

What does this mean?

In 1992, James E Web famously quoted, "Our attainments in space are a major element in the competition between the Soviet system and our own… in this sense, they are part of the battle along the fluid front of the cold war". 29 years on, the esteemed, NASA Administrator, Jim Bridenstine in his farewell had a message for the next space agency head – "that science and discovery should always be uniting." Whilst this quote provides a more pragmatic and targeted perspective on the prospects of 21st Century space exploration, on the contrary, this message becomes overwhelmingly disparaging when one aligns space exploration with furthering political agenda.  

Still, the "politically driven" President Moon Jae-in of South Korea has vowed to launch the nation's first robotic lunar lander on a domestically developed rocket by 2030. Subsequently, China has become the second country after the US to send a rover to Mars. Chinese media have touted it as a 'milestone with great significance in China's development of space and aviation. Anticipating this beforehand, Joe Biden has shifted America's focus from the space race to strengthen instead its earth science research, a move which aligns with the party's promise to support NASA's "Earth observation missions to understand better how climate change is impacting our home planet." Consequently, this would push back any dates of space milestone set by the Trump administration, notably the lunar landing that aimed to land an astronaut on the moon by 2024.

While China's achievement is undisputedly impressive, and President Moon Jae-in's vow is ambitious, it is the private entities who are stealing headlines with projects that go beyond machines exploring space.

When Jeff Bezos takes off to space in his 'New Shepard Booster,' he will bring Blue Origin one step closer to launching the market of space tourism to the general society.  The booster has the capability to perform a vertical, rocket-assisted landing at the site, and its capsule that rides atop of the New Shepard is designed to seat six-passenger who are guaranteed to experienced weightlessness in their travel to space and see the curve of the planet with the darkness of the space as the backdrop.

The success of this launch will usher in a new space race between a handful of companies that would compete with each other in this emerging market.   The cost and customer experience of space travel will vary on the services provides by companies. For example, both Virgin Galactic and SpaceX will launch passengers by the Federal Aviation Administration's definition. Still, the cost of these flights will depend on whether the passengers want to experience sub-orbital or orbital space.

In the past, Russia had tried to charge for flights to raise money for its struggling space program when NASA forbade the practice, saying spaceflight was too dangerous to be opened to ordinary people.  However, in 2019, NASA reversed its view and opened the doors to the space station for those who could afford it. This decision opened the floodgates for private entities to take over this sector and venture into space exploration.

How does this impact the legal sector?

The million-dollar question here is why billionaires and other well-known entities are competing for space dominance. The answer lies in the global market for space tourism, which has an estimated value of US$651 Million in the year 2020, which is projected to reach a size of US$1.7 Billion by 2027, growing annually at a rate of 15.2% between 2020-2027. Suborbital Tourism, one of the segments analyzed in the report, is projected to record a 15.6% CAGR and reach US$1.5 Billion by the end of the analysis period. After an early analysis of the business implications of the pandemic and its induced economic crisis, growth in the Orbital Tourism segment is readjusted to a revised 13.1% CAGR for the next 7-years.

The marketing potential for this emerging sector can be demonstrated by looking at the suborbital tourism sector, where two companies are competing for dominance. First is Virgin Galactic, and the second is Blue Origin. Both companies' systems are rocket-powered and capable of carrying up to six passengers on a flight, but that is where the similarities end. For example, Virgin's spacecraft, SpaceShipTwo, has two pilots in addition to the passengers and can travel to an altitude of 295,000 feet. At the same time, Blue Origin's Blue Shepard can reach an altitude of more than 330,000 feet.  The intricacies behind the design of these spacecraft will bring work for the law firms as patents and other intellectual property challenges will be needed to be enforced by lawyers to ensure their client’s competitors do not gain a competitive edge. Consequently, lawyers will need to act as business advisers and understand the strategy of their client to guide them through the spectrum of business operations.

Given the price point of these flights, both Virgin Galactic and Blue Origin will target only high net worth individuals for the suborbital experience. From the business end, the demand for these travel tickets is mainstream amongst high-net-worth individuals. The survey found that suborbital flights have a total addressable market of about 2.4 million people among individuals with a net worth of more than $5 million. Other findings indicate that these individuals are "likely to purchase a ticket on a spacecraft within one year" when the companies begin regular flights.  Subsequently, the idea of letting a 'common man' with no experience in space will cause challenges for law firms as they will have to tackle past the age-old 1967 Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer space, Including the Moon and Other Celestial Bodies which considers commercial space activities and space travel to fall only within the jurisdiction of states. If the state passes the burden of its responsibility for space activities to non-governmental entities, then law firms must come up with innovative and flexible solutions that address clients' current needs as well as future externalities that will protect their clients from liability against personal injury and other civil lawsuits.

Major projects for both suborbital and orbital flights will require lobbying by international law firms specialising in space law. This would include dealing with Space Launch issues, Space Budget, Export-Import Bank financing, and agency reauthorization.  Due to the sheer competitiveness of this sector, start-ups in this field would continue partnering with well-established players in this market, such as SpaceX, to work on initiatives as in the case of Space Adventures for Orbital Tourism by 2022 and Axiom Space to build a Commercial Destination Module for the International Space Station. The increase in funding and innovation anticipated in this area would make it profitable for law firms to grab the opportunity to secure clients in this industry.

While it may not always be rational to run with their over the ambitious timeline, the space industry provides opportunities in various areas of law. In the case of SpaceX, K&L Gates, Boies Schiller Flexner, Drinker Biddle & Reath, and Cooley were employed for multiple legal needs such as breach of contract suits and antitrust litigations. Law firms are further required to fend off challenges that would prevent launches or reduce their funding.