SAN FRANCISCO – Halo Space, Eos X Space Technologies Corp. and Arthur D. Little Spain were indicted Oct. 31 in Madrid on charges of unlawful discovery of the trade secrets of Spanish high-altitude balloon company Zero 2 Infinity.
The case stems from Zero 2 Infinity’s allegations that the people hired to raise money for its space tourism business established two competing firms based on Zero 2 Infinity’s intellectual property.
After asking for extensive documentation to share with potential investors, some of the individuals indicted “changed the logo in the presentations and managed to raise 1 million euros for a company that was just a website with some” computer generated imagery, Jose Mariano Lopez-Urdiales, Zero 2 Infinity founder and CEO, told SpaceNews. “They thought they could do that because Zero 2 Infinity was in financial distress, in part because we were expecting that 1 million euros to arrive.”
Halo Space denied the charges. Halo Space “is ready to take all legal actions available to defend Halo from false accusations,” the Spanish company said in a statement. “Space tourism to the stratosphere is based on aerospace technologies developed and tested for more than 60 years, such as stratospheric balloons, pressurized capsules and parachutes for descent and landing. Besides HALO Space, all the companies working on the development of space tourism systems to the stratosphere in the United States, France, and Japan are using those mature technologies, all developed decades before Zero 2 Infinity was created.”
What’s more, “Zero 2 Infinity has never had any contractual relationship with Halo Space or Arthur D Little,” according to the emailed statement.
Kamal Kharbachi Jader, Eos-X Space founder and chairman, did not respond to requests for comment.
Arthur D. Little Spain did not respond to requests for comment.
Indictment
The Oct. 31 indictment charges the following individuals and organizations with disclosure of trade secrets under article 277 of Spanish Criminal Law: Arthur D. Little, S.L.; Carlos Mira Martin, former Arthur D. Little Spain president and Halo Space founder and CEO; Ignacio Alberto Garcia Alves, Arthur D. Little global CEO; Kamal Kharbachi Jader, Eos-X Space founder and chairman and IT Holding Venture Capital founder and CEO; Luis Angel Delgado Corral, Arthur D. Little Spain finance director; Eos X Space Technologies Corp., S.L.; Eos X Space-Ship Company, S.L.; Halo Space, S.L.; and IT Capital Holding, S.L.
The law in question carries potential penalties “of imprisonment from three to five years” if the secrets in question were “disseminated, revealed, or transferred to third parties” in addition to fines, Spanish attorney Leonardo López Marcos, co-founder of the International Legal Center for Space Sustainability, said by email.
Financing Difficulty
Lopez-Urdiales established Zero 2 Infinity in 2009. The idea stemmed from his paper published at the 2002 International Astronautical Congress in Houston, “The Role of Balloons in Future Development of Space Tourism,” and his patent for a pressurized pod for hosting passenger on journeys to and from space or near-space granted by the European Patent Office.
In its first decade, Zero 2 Infinity made technical progress developing a launch vehicle for small satellites using a helium balloon as the first stage. The company also was working on Bloon, a balloon to lift space tourists and payloads to an altitude of 36 kilometers. In 2017, Zero 2 Infinity completed its first test flight, deploying a prototype of a small satellite launcher.
Financing the venture proved difficult, though. “This is a common problem in this sector,” Lopez-Urdiales said. “Unfortunately, sometimes technical founders are not so good at fundraising.”
In an attempt to solve the problem, Lopez-Urdiales signed agreements with people he believed would help Zero 2 Infinity attract investment.
“The agreement was very simple,” Lopez-Urdiales said. “They fundraise for us, and they keep 10 percent of whatever sums they raise.”
In the nondisclosure agreement Zero 2 Infinity signed with Arthur D. Little Spain, each signatory agreed “not to use the confidential information for its own benefit, as access to the confidential information is permitted for the sole and exclusive purpose of collaboration between the parties.”
An agreement Zero 2 Infinity signed with Agora Next, another firm Kharbachi leads as founder and CEO, called on parties “to respect the strictest confidentiality with respect to any information and/or documentation that is of a confidential nature” and not to “accept similar orders that could conflict with the interests of” Zero 2 Infinity.
Once the agreements were signed, Zero 2 Infinity shared extensive documentation including pricing plans, lists of suppliers and PowerPoints presentations.
“We gave them access to those secrets for the sole purpose of fundraising for us,” Lopez-Urdiales said. “We claim that they used that information to fundraise for a couple of competing companies that they created (EOS first and Halo second) and that ostensibly are almost identical to what we shared with them.”
Zero 2 Infinity timeline
EOS and Halo Fight
Zero 2 Infinity alleges that Kharbachi raised $1 million for its space tourism project, but transferring the funds to Eos-X, a space tourism company based in Madrid. Eos-X, established in 2020, promises balloon flights to lift passengers to “37km of altitude, where there is nothing but blackness of space and the blue halo of earth,” on LinkedIn.
The Eos-X project was supported initially by Arthur D. Little Spain.
In 2021, Carlos Mira, then president of Arthur D. Little Spain, established Halo Space, a balloon space tourism company offering “zero-emission commercial flights of 25-40 km altitude allowing to see the curvature of the planet Earth for 4-6 hours,” according to LinkedIn.
Arthur D. Little sued Eos-X in 2023 in civil court in Madrid for using its logo after the two companies stopped working together. Eos-X then sued Halo Space, charging intimidation and trying to take over its business, according to an article in the Spanish business and finance newspaper CincoDias.
Delicate Financial Situation
Zero 2 Infinity remains in business.
“Financially, we are in a very delicate situation, but we are as convinced as ever that what we propose makes a ton of sense,” Lopez-Urdiales said.
Halo Space Status
Halo Space, meanwhile, has carried out five test flights. During the most recent flights conducted in September in California’s Mojave Desert, Halo Space tested descent and landing for its space tourism vehicle with “a paraglider-type steerable parachute,” according to a Sept. 25 news release.
“This major step forward in the development of the program will allow the company to move from design to manufacturing, and further advance the test flight plan for 2023 and 2024,” the Halo Space news release said.
Halo Space plans to begin commercial operations in 2025, charging customers 150,000 euros ($160,255) per ticket.
