Promoting Business Innovation in the Space Sector

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Joel Greer

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In his 20 years of practice, Joel has represented Asian, European, and North American companies in numerous international arbitration or pre-arbitration matters, including under the rules of the International Chamber of Commerce, Japan Commercial Arbitration Association, and London Court of International Arbitration, as well as in international mediation under the rules of the Singapore International Mediation Centre. These matters have concerned disputes arising from licensing agreements, construction contracts, joint venture agreements, and sales and purchase agreements, among others. More recently, Joel has advised on space law and policy matters, as well as geotechnology issues.

At first glance, space development and use may not seem to be a sector for start-up companies. Yet, as then Prime Minister Abe Shinzo observed in late 2019, “In Japan, we are seeing an increasing number of start-ups and other initiatives taking on the challenge of developing new space businesses.” Mr. Abe went on to ask the Japanese government “to advance the creation of an environment that fosters new space businesses, including accelerating the development of the system necessary to materialize that.”^[1]

Mr. Abe correctly noted that a number of Japanese space start-ups have emerged in recent years. These ventures are involved in a diverse range of space-related activities, including:

rocket development and launch services (e.g.: Interstellar Technologies Corporation)
space robotics (e.g.: GITAI Japan Co., Ltd.)
space resource exploration (e.g.: ispace inc.)
space debris removal (e.g.: Astroscale Holdings Co., Ltd.)
space travel and transportation (e.g.: PD Aerospace Co., Ltd. and SPACE WALKER Co., Ltd.)
space entertainment (e.g.: ALE Co., Ltd.)
satellite ground station sharing (e.g.: Infostellar)
and agricultural remote sensing (e.g.: Sagri Co., Ltd.)

This list is just a sample of Japan’s space start-ups.

Mr. Abe’s request that the Japanese government further “the creation of an environment that fosters new space businesses” was a call to continue efforts in this direction which have been ongoing for some time. In 2008, for example, Japan passed its first national space legislation, the Basic Space Law, which, among other things, acknowledged the commercial possibilities of space and declared the government’s support for private sector efforts to pursue these opportunities.^[2]

Further, a pair of important space laws were enacted in 2016: the Act on Launching of Spacecraft, etc. and Control of Spacecraft; and the Act on Ensuring Appropriate Handling of Satellite Remote Sensing Data.^[3] Broadly speaking, these two laws establish a regulatory regime for private sector entities that engage in space-related activities in Japan; the first regulates satellite launch and operation and creates liability rules for these activities; the second regulates the operation of satellite remote sensing devices and acquisition of data from these devices.

In the words of Japan’s leading space law scholar, Professor Setsuko Aoki of Keio University, both laws reflect Japan’s commitment to support commercial space-related activities through “the establishment of a system that clarifies matters for start-ups or other companies that develop small-scale rockets or that undertake to operate remote sensing satellites by identifying the government agency to which license applications are to be submitted and clarifying the conditions for license approval and the procedures for supervision.”^[4]

In addition, the Japanese government has set out a comprehensive and coordinated national policy supporting space development and use in its Basic Space Plan, the latest iteration of which appeared in 2020.^[5]Among the Basic Space Plan’s many objectives are expanding government space-related procurement from the private sector, including start-up companies, and promoting various initiatives to encourage start-ups and other businesses to enter the space industry.

For example, the Japan Aerospace Exploration Agency, Japan’s premier space development organization, established a Space Exploration Innovation Hub Center in 2015 to research and advance space exploration technologies, including by collaborating with companies and academic institutions. According to the center’s director, “While space exploration today is supported by many research activities and government support, the role of industry will become very important in the future. If companies are not able to get into space activities and start new businesses, there will be no hope of a sustainable space program.”^[6]

In addition, JAXA began a program in 2018 called Space Innovation through Partnership and Co-creation (J-SPARC). J-SPARC’s goal is “to create new ideas for space related-businesses through collaboration between private companies and JAXA,” and the program supports some 20 projects in this regard.^[7]

Such Japanese government initiatives also include the “S-Matching” program, an online platform that Japan’s government launched in 2018 to spur business innovation by helping connect entrepreneurs and investors in the space sector. Further, since 2017 the government has sponsored a space business contest called “S-Booster,” which solicits fresh space-related ideas from start-ups and others that compete for financial support, expert guidance, and business matching opportunities.

In sum, Japan has made significant strides to create a regulatory and commercial environment to facilitate space-related private sector innovation, including by start-ups. As the sample of Japanese firms involved in space activities mentioned at the beginning of this article indicates, these efforts are paying off.

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Click here for the Japanese translation article.

[1] Uchū kaihatsu senryaku honbu [Strategic Headquarters for Space Development], http://www.kantei.go.jp/jp/98_abe/actions/201912/13uchu.html; Prime Minister in Action, December 13, 2019, at http://japan.kantei.go.jp/98_abe/actions/201912/_00025.html.

[2] See Article 16, Uchū kihon hō [Basic Space Law] (Law No. 43 of 2008), at https://www8.cao.go.jp/space/law/law.html (Japanese).

[3] See Jinkō eisei-tō no uchiage oyobi jinkō eisei no kanri ni kansuru hōritsu [Act on Launching of Spacecraft, etc. and Control of Spacecraft] (Act No. 76 of 2016), at https://www8.cao.go.jp/space/english/activity/documents/space_activity_act.pdf; and Eisei rimōtosenshingu kiroku no tekiseina toriatsukai no kakuho ni kansuru hōritsu [Act on Ensuring Appropriate Handling of Satellite Remote Sensing Data] (Act No.77 of 2016), at https://www8.cao.go.jp/space/english/rs/rs_act.pdf.

[4] S. Aoki, “New Law Aims to Expand Japan’s Space Business,” March 3, 2017, at https://www.nippon.com/en/currents/d00294/new-law-aims-to-expand-japan%E2%80%99s-space-business.html.

[5] See Uchū kihon keikaku [Basic Space Plan] approved by Japan’s Cabinet office on June 30, 2020, at https://www8.cao.go.jp/space/plan/kaitei_fy02/fy02.pdf.

[6] Message from our Director, at https://www.ihub-tansa.jaxa.jp/english/; Habucho aisatsu [Greetings from the Hub Director], at https://www.ihub-tansa.jaxa.jp/director2.html.

[7] See Aratana jigyo wo souzeisuru kenkyukaihatsu puroguramu {Uchū Innovation Partnership (J-SPARC)} no kaishi ni tsuite” [Research and Development Program to Co-Create New Businesses - Launch of the Japan Space Innovation Partnership (J-SPARC)], at https://www.jaxa.jp/press/2018/05/20180511_jsparc_j.html.

The information provided in this article does not, and is not intended to, constitute legal advice and is for general informational purposes only. Readers of this article should contact an attorney to obtain advice with respect to any particular legal matter.