GLXP Competitor Blasts Master Team Agreement as “Unconscionable”

Long simmering controversies concerning the Google Lunar X Prize (GLXP) heated up today as one of the 28 teams competing for $30 million branded the competition’s rules as “oppressive” and “unconscionable” and accused the X Prize Foundation of tolerating a serious conflict of interest involving prominent trustee Naveen Jain, who leads one of the competitors.

“The facts of the matter are that the MTA [Master Team Agreement] is nothing more than a one-sided ‘legal framework’ to benefit the X PRIZE Foundation and Google while placing an unreasonable burden on the teams. The agreement is egregiously one-sided, overly burdensome, oppressive and unconscionable,” Team Mystical Moon wrote in a blog post.

The post goes on to list a series of grievances concerning the competition, including “unconscionable” requirements concerning media and intellectual property rights and alleged conflicts of interest involving the X Prize Foundation’s Board of Trustees.

Consequently, the X PRIZE Foundation (and Google) refuses to address the following issues:

  1. The X PRIZE Foundation (and Google) are in BREACH of the “legally binding” MTA Version 3.0.
  2. The Media and Intellectual Property Rights requirements are unconscionable.
  3. Exhibit B (and other ridiculous requirements) are extremely oppressive, overly burdensome and totally unnecessary to achieve the TRUE goals and objectives of the competition.
  4. There exists a serious “Conflict of Interest” issue with the Trustees of the Board, employees and incestuous long-term relationships with the X PRIZE Foundation.
  5. The Dispute Resolution process (Version 3.0 MTA Exhibit A Section 9) is totally without merit.
  6. The MTA is full of “caveats” that allow XPF the “option” to “at its discretion” make “decisions” that are “not-so-black-and-white.”
  7. The unprofessional, unethical and bad faith behavior of the management and employees of the X PRIZE Foundation needs to stop.

The MTA [PDF] gives the X Prize Foundation and Google all of the media and many of the IP rights to the mission. Eligible teams will receive a share of the revenues after all expenses and a management fee are deducted.

At least a half dozen teams, several of which are serious contenders, have discussed dropping out of the $30 million competition before launching their missions unless changes are made in these provisions. The teams believe they can make money off their flights without the prize money and that they can do better controlling their own rights.

Mystical Moon’s blast is a response to a recent blog post titled “About the MTA…” by recently appointed GLXP Senior Director Alexandra Hall. In that post, Hall explained that the MTA exists to “define what needs to be done to win the competition(s) and to provide a legal framework for that.”

The agreement between the X PRIZE Foundation (“X PRIZE”) and Google that was signed in 2007 includes a number of stipulations about how the competition is to be run along with the requirements for winning the prize(s). Then there are specific requirements that relate to X PRIZE and Google’s goals for the promotion of the space economy and the inspiration of the next generation of scientists and engineers through this competition. Executing on these goals requires agreement on related items such as logo, media tracking, and approval rights. There are also important requirements involving liability (working with rockets tends to raise this issue!) and not very exciting things like the reporting requirements from X PRIZE to Google.

All of these items, which are in the agreement between Google and X PRIZE, were the basis behind the requirements that have then been put into the MTA that teams have to sign up to in order to participate in this prize.

Hall sidestepped the key complaints about media and IP rights while focusing primarily upon GLXP’s enforcement of blogging requirements by the teams. That approach didn’t sit well with Team Mystical Moon, which wrote:

Furthermore, we can never get an honest answer from either the X PRIZE Foundation or Google as to the source of many of these ridiculous requirements. The X PRIZE Foundation has often stated that they flow from their agreement with Google but refuses to share that agreement with the teams. And recently, Google has also side stepped the issues by refusing to reply when asked this very question.

Meanwhile, Tiffany Montague, director of space initiatives for Google, publically [sic] makes a vague and ambiguous statement while refusing to answer the question altogether:

“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.”

Therefore, the X PRIZE Foundation and Google continues to play “Ring Around the Rosy” with the teams regarding these matters. It is very obvious that after nearly 4 years neither entity intends to address the issues but rather will continue their legal tactics to “bully” the teams and attempt to force these requirements down their throat.

Montague made those comments during a panel discussion last month at the NewSpace 2011 conference. She insisted that Google was sponsoring the prize because of its founders’ desire to expand the frontiers of space, that the company expected no return on investment from the competition, and that it didn’t need the money or the publicity.

If true, it raises the obvious question of why the foundation and Google need that much control. A source connected with the X Prize Foundation told me that the media and IP requirements were a condition of Google funding the prize. This person told me that most of the revenues will go to Google, and that neither the foundation nor Google expect very much in revenues.

The conflict of interest charge refers to X Prize Foundation Trustee Naveen Jain, a tech millionaire who is chairman and co-founder of Moon Express, one of the competitors for the Google Lunar X Prize. Hall addressed that issue in an earlier blog post:

For non-employees of the X PRIZE Foundation, such as Trustees and Supporters, there are also strong conflict of interest rules. As Cristin Dorgelo stated in response to a commentator raising the issue about an X PRIZE Foundation Trustee who was also involved with a Google Lunar X PRIZE team, there are disclosure and recusing requirements which mean that anyone who has an interest in a competing team has to leave the room when the Google Lunar X PRIZE is discussed. Trustees and supporters with interest in teams in our competitions have no access to insider information or any influence on operational decisions.

We’ll see where this goes. Sometime in the next three years, one of the GLXP competitors will launch a rover to the moon. Whether they will still be competing for Google’s prize money remains to be seen.