Project Bromo: Close collaboration demands an even closer focus on IP strategy

Joel Fraser (associate) and Theo Worsley (senior associate) are patent attorneys at European IP firm Withers & Rogers, specialising in the field of aerospace and the space industry.

The memorandum of understanding (MoU) for a major collaboration signed between European aerospace leaders Airbus, Leonardo, and Thales is a pivotal moment for the sector. Project Bromo is not simply a collaborative agreement by three companies that see the benefits of innovating together; it is a statement of shared intent to create a new European aerospace organisation to compete on a world stage.

The thing that sets Project Bromo apart from other industrial collaborations is that each of the three signatories is effectively placing an arm of their existing business into a new corporate entity in which they each share a commercial interest. The unprecedented scale of the collaboration has attracted the attention of the Directorate-General for Competition – Europe’s primary anti-trust authority – and a decision on whether to allow the entity to proceed is expected next year.

If Project Bromo gets the go-ahead, it will combine the world-class capabilities of three leading aerospace organisations, supported by the resources, staff, and cutting-edge technologies required to create to stand shoulder to shoulder with competitors in the USA and China. It has the potential to attract significant investment and become a platform for accelerating space innovation in Europe.

Why intellectual property matters for Project Bromo

The formality of both signing and announcing the MoU for Project Bromo so publicly indicates the degree of commitment to making it work. While collaborations are not uncommon in the global space industry, particularly in Europe, the decision to create a new commercial entity is more unusual.

Given the nature of European aerospace, which is generally made up of smaller private companies (compared to the USA, for example), working together is key to technological advancement and maintaining global competitiveness and IP assets, such as patents and registered designs, are regarded as essential ingredients when forming collaborations.

There is precedent for misapplication of IP in aerospace collaborations, so it’s especially important for the parties involved to take care. The case of Boeing and Zunum Aero is a recent example. While initially the two companies had worked together successfully, poorly defined boundaries around a trade secret and its application in a proprietary technology resulted in Zunum being awarded $81 million in damages.

With three sizeable corporations involved, Project Bromo will undoubtedly involve a complex web of patent-protected technologies and other IP assets. To mitigate the risk of disputes arising, a thorough audit of the IP assets that each party is placing at the disposal of the new entity is needed.

Precise mapping of all IP assets, including any trade secrets that might be hidden from view, should be completed at the outset. As well as listing the various IP assets and who owns them, it should be clear where patents are in their life cycles, and where the protected technologies have been licensed to third parties.

It is also important to decide which parties will own any new IP created by the new entity. In any collaboration, there is always the potential for IP to be misapplied either intentionally or unintentionally, which makes the importance of an initial audit and a carefully constructed commercial agreement that takes account of all existing and future assets, even more important.

Dual-use IP strategies for space and defence

Given the nature of aerospace, and that this new venture of Project Bromo is undoubtedly a response to the shifting geopolitical landscape, dual-use IP strategies are likely to be favoured as they hedge risk by protecting an innovation in more than one market.

Project Bromo may focus on the space industry, but it will very likely bring forward capabilities that could find application in commercial satellites and also defence.

While dual-use IP strategies are not unusual, the scale and complexity of Project Bromo means they will need to be planned in detail. Unlike their government-backed counterparts in the USA and China, European space companies may need to ensure their activities are both commercially viable and fulfil a national security function.

Adopting a dual-use innovation strategy at the outset could differentiate Project Bromo and ensure its competitiveness in the long term.

Patent ownership and the risk of IP disputes

To avoid patent applications becoming more complex than necessary, Project Bromo would benefit from submitting the applications under a single named entity.

While drafting a patent application directed towards covering civilian and defence applications is relatively straightforward (in the space sector for example, a satellite for civilian and defence purposes), patents submitted with joint applicants are more likely to see issues emerge.

Operational gridlock can occur in joint patent applications as the applicants may not be able to reach agreement on how to amend a submitted patent application. Project Bromo may well have a plan for dealing with this as the new entity may already have a team of decision makers responsible for delivering a single pre-agreed IP strategy.

If disputes arise, unravelling who owns what whilst taking account of legacy technologies and any new IP created by the new entity could prove challenging, especially if the three companies involved in founding the organisation decide to go their separate ways. Planning for all eventualities is vital at the outset to prevent costly, long-drawn-out disputes arising in the future.

Project Bromo and Europe’s wider space industry

Interestingly, there are similar examples of collaboration in the space sector that have worked well. MBDA was formed in 2001 by a merger of the missile manufacturing subsidiaries of Leonardo, Airbus and BAE Systems. Despite the scale of the merger and the players involved, unlike Project Bromo it did not attract the attention of anti-trust authorities at the time.

Particularly in Europe, there is a risk that smaller companies could be squeezed out or forced into the supply chain of Project Bromo, rather than innovating independently. Regardless of whether Project Bromo goes ahead, the European Space Agency (ESA) is heavily focused on strengthening sovereign capabilities, and there should be scope for funding to reach all segments of the market.

The MoU for Project Bromo sends a clear message to the global aerospace market: Europe means business and is committed to advancing its sovereign capabilities. IP strategies and forethought are the enablers that make this close collaboration possible and will ultimately determine its success.

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