Will Lunar Competitors Forego the Google Lunar X Prize Over IP Rights?

Sometime during the next 3 years, a rocket will sit on a launch pad in Florida or elsewhere in the world containing a lunar lander and rover built to win the Google Lunar X Prize. Only, the team launching it might no longer be in the competition.

Why would a team turn down a minimum of $20 million in prize money for a mission that costs many times that amount?

That’s an excellent question. And a fascinating tale. Read on.

The answer involves the Master Team Agreement [PDF] between the X Prize Foundation and the competitors that lays out the rules for the competition. The mandatory agreement assigns all media rights and many IP rights to the X Prize Foundation and Google. The parties are free to profit from the teams’ work as they wish, with revenues then apportioned according to the table below after expenses and a management fee are deducted.

X Prize
Foundation/Google
Grand Prize
Winner
Second Prize
Winner
Eligible Teams
(Divided Equally)
35%33%16%16%
43%38%None19%
50%None25%25%
68%NoneNone32%

As I wrote two months ago, this arrangement has never sat well with many competitors who understandably want more control over the rights to their work. Any missions flown are likely to generate massive worldwide interest, and there is potential to profit on the flight and any surface activities that are undertaken. The rights provisions — and the uncertainties over them stemming from years-long negotiations over the MTA — have made it difficult for teams to raise money and attract sponsors.

As a result, at least a half dozen teams have seriously discussed dropping out of the competition before they launch if the X Prize Foundation and Google are unwilling to alter the MTA.  The launches would proceed, but not as part of the competition.

It’s a powerful threat. If a team dropped out and then flew a mission that met all the requirements of the Google Lunar X Prize, then the value of the competition is greatly diminished.  The first GLXP team to win the prize would be only the second private team to drive a rover on the moon. It would be a great achievement, but the equivalent of Apollo 12 from a public relations standpoint.

Altering the agreement could be difficult, however. In the wake of a controversy over proposed changes to the MTA earlier this year, an agreement was made that  all 28 teams would have to approve any further alterations to the rules.  That could be very difficult task to achieve, and it might lead a team to withdraw rather than a conduct a prolonged series of potentially fruitless negotiations.

Whose idea it was to the write the MTA in this fashion is a matter of debate. Some say that the X Prize Foundation is repeating what it tried to do with media rights during its earlier Ansari X Prize competition.

Other sources say that Google made control over the rights a condition of putting up $30 million in prize money. No rights, no competition. The X Prize gets a small percentage of the revenues with Google getting the bulk of it, they say. Revenues are not expected to be that high based on the X Prize’s experience with its past prizes.

I asked Tiffany Montague, director of space initiatives for Google, about this during the recent NewSpace Conference.  She said Google doesn’t expect to profit from the competition, nor does it need the money, having $36 billion in cash reserves (double NASA’s budget).

“I know this may not sound plausible, but we’re not in this to generate revenue or increase our brand. Our founders are extreme space nuts,” Montague said. “We’re doing pretty well. We don’t have to demonstrate that there’s a return on investment. We enjoy a very nice position in the world right now. We get to do things because we like them, because we think they’re the right things to do.”

Montague added that the MTA was an agreement between X Prize Foundation and the teams.  I asked her whether controlling the IP and media rights was a condition of Google funding the prize, a question she did not answer.

Whatever the case, the ironies abound. The whole goal of the Google Lunar X Prize is to prove that lunar exploration could be done faster and cheaper through commercial means. And to get away from government contracting with its onerous rules and provisions. And yet the competition has been marked by years of acrimonious negotiations over the rules since it was announced four years ago next month. And it is now threatened by provisions that are viewed as so onerous that teams are willing to walk away from $20 million for missions they’re going to fly anyway.

It’s a strange situation. Hopefully, they will figure out a way of resolving this matter. The competition is very valuable, and if teams succeed it could open up an entirely new era of lunar exploration.

  • gaetano marano


    the GLXP is already FAILED, since, FOUR years later, Google still plays only with LEGO moonrovers!

  • gaetano marano


    a GLXP team needs over $70 million (including the rocket) to send a rover to the Moon, and… just IF it succeeds at its “first shoot”

  • having $36 billion in cash reserves (double NASA’s budget)
    What is the point of making this comparison (an amount of money to a burn-rate of money)?

    NASA burns, in two years, as much money as one of the most successful technology companies in history has been able to amass over its entire existence. As a US taxpayer, I’m left feeling a bit fleeced…

  • NASA’s not in the business to make money. If it was, people would be SCREAMING about it competing with the private sector. You’d hear them yelling all the way out at the moon.

    As for why this came up, Montague’s point was that Google doesn’t need the paltry revenues that the lunar prize will generate. Thus, they’re supporting the prize to shakes things up in space and back NewSpace and because their founders are such space nuts. (BTW, after she mentioned how much money Google has, Pete Worden chimed in with “That’s why we’re nice to them.”)

    What I asked her was essentially, “If the revenues don’t matter, then why is the MTA structured in a way that assigns so much of the media and IP rights to the X Prize Foundation and Google? And was it a condition for Google funding the prize as I had been told?”

    The answers were sort of…ehh. But it did set off a long back and forth about Google and its involvement in space that I thought was probably the most interesting thing I’d heard all day. Or maybe during the whole conference.

    I was later yelled at for even asking those questions by another member of the panel, who didn’t understand why it mattered and felt I had hijacked the point of the panel which about our future in space or some such thing. This was irritating on just about every level, not least because it does matter. Which hopefully people see with this story.

  • James Moore

    Doug, you’re right. It DOES matter, and the discomfort level of some of the teams with that aspect of the MTA was also visible at the GLXP panel held at ISDC2011. To their (and GLXP’s) credit, at least there has been an open dialogue that apparently resulted in a revised “final” MTA. I don’t think we’ve seen the end of this yet, and I don’t know how involved Google really is in dictating terms. It would sure be interesting to know. IMHO it’s hard to repeat the mantra “Innovation Through Competition” when one two of the things that you as a team are counting on to (hopefully) recoup some of your investment (media rights and IP) are being taken away from you. My two cents worth.

    Thank you for being willing to ask the tough questions(s)!