Lawfare Daily: How To Make a Patriot, with Fabian Hoffman

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so you can run faster, scale smarter, lead stronger. [MUSIC PLAYING] You know, license production agreements, they are, and they should design as much more than just a business deal. And very often in the past, they have been used, actually,

to, you know, deepen political relations to enhance alliance cohesion, because they signal trust. It's the law of hair podcast. I'm Anastasia Lopatina, Ukraine Fellow at Law Fair, with Fabian Hoffman, a senior research fellow at the program

for Ukraine and full spectrum threats at the Norwegian Institute for Defense Studies. So many reasons why you would want to localize as much as possible after that supply chain.

“But if it's just about capability right now, right?”

Then well, in a short term, there's nothing really you can do anyways, but then it might be better to say, look, we go softer on the localization, and instead prioritize, you know, moving some of it, at least, outside to speed up

the whole process. Fabian and I discussed whether the US will give a license for the production of Patriot Interceptors to Ukraine, and what it actually takes to make them. So Fabian, we invited you back on the podcast

to discuss some of the recent news that came out of the NATO summit in Ankara in Turkey,

which happened in the first week of July.

And at that summit, the US President Donald Trump said that the US will be giving a license to Ukraine to produce Patriot Interceptors. And he just kind of dropped that in the middle of, you know, press appearance.

And as far as I understand, we don't really have any details of what that will look like yet.

“That the deal the license hasn't yet been finalized.”

So we don't know all that much. But of course, it spurred a whole lot of coverage of the issue, especially considering that they air war between Ukraine and Russia is getting worse by the day. Very much literally by the day I'm based in Kiev,

and it's an unprecedented level of attacks by ballistic missiles. We Ukrainians and Kiev would get ballistic strikes, you know, two, three, four days in a row,

which has never happened before.

And at the same time, Ukraine and the Ukrainian authorities are saying that we've run out of interceptors completely. So in the context of all of this, of course, we wanted to bring you on to discuss all of this and discuss the patriots in the air war.

I want to start with asking you a very basic question to just sort of said the rules here. Can you explain how does licensing actually work as and who grants the license to whom? And what does the license allow you to do?

Yeah. So basically, you have two actors here. One is the licensor, the manufacturer that grants the license. And then after you have the license, see the actor that receives the license.

And typically, the licensor is a foreign manufacturer granting a license to a domestic manufacturer, depending, of course, in which country you're living in. But in this case, Raytheon, for example, for the Pactu, GMT interceptor would grant a Ukrainian manufacturer

the license to produce patriot interceptors inside Ukraine. Now, this involves technology transfers. This involves military technology transfers.

So governments are also always involved.

In the US case, it is the US government that needs to allow the manufacturer to grant the license for these interceptors to be produced outside the United States. So this means it's not just a business to business deal. You always have the official side involved,

which is why it is hinges on political agreement to work. OK. So this would need to involve not just the Ukrainian government and the president, whatever relevant institution we have, but also a specific company.

So hypothetically, for example, firepoint, which is trying to make ballistic missiles in Ukraine. Could be, but this is already a bit where the issue starts,

when Raytheon granted a license to embed a Germany to produce Pactu, GMT interceptors, that was a very logical choice, because MBDA Germany has been heavily involved in missile defense production in the past,

and basically was already part of this defense industrial base

involved in production of these types of weapons systems. So I'm not exactly the same, but broadly speaking, there were component manufacturers that could fairly easily be diverted for this program. Now, if you look at Ukraine, this is where the first issue starts,

I would say there is not an immediate Ukrainian manufacturer that comes to mind, where you would say, "Okay, look, this is the logical partner "to be the prime contractor under a license production agreement "between the United States and Ukraine."

So it could be firepoint, it could be someone else, but there is not your one most logical choice, I would say. - We'll get to talking more about this, but before we get specifically into the Ukraine context, can you just explain a little bit more of the logic

behind the licensing agreements?

“Like what do both parties get out of granting these licenses?”

- Yeah, I mean, it's a business deal.

Again, it involves governments, but it is, I would say, you know, economically beneficial for both sides, outside any military political context. The licensor increases the production base

of its missile system, in this case, right in interceptor could of course be any other military product by moving production outside existing facilities. So you increase the number of components that are being produced to increase the number

of entire units that are being produced. So in the end, you can sell more. Of course, then license agreements, they also allow you to gain market share. So very often, they are used as a tool

to make acquiring a system more attractive for the side receiving it. So instead of, you know, just saying, "Hey, look, "we're gonna export the weapons system to you,

“"we're gonna integrate you into supply, into the supply chain,”

"making this whole deal a lot more attractive "from the side of the seller." And then, of course, for the licensor, it's also just, you know, fees that come with it. So let's say you have established

a license production manufacturing facility somewhere abroad. Every time, that facility builds an interceptor, a missile, or whatever product, and sells it to another customer, you get a licensing fee, right?

Because it is your intellectual property that is being sold, hence, you get a share of whatever profit is generated. So in that sense, it can also be economically, very, very beneficial for the licensor.

For the licenseee, well, they get access to an established product, to a established IP. That means you can save a lot of the development costs behind, you know, some of these ballistic missile defense systems, for example, or, again,

for any other military product. And of course, the technology transfers, while immediately, they are restricted to the product that your license producing. Of course, receiving that technology

and bringing it into your own defense industrial base, well, this creates competencies beyond

“the very product that you are building in that instance, right?”

So in the context of your grain again, if they were to produce patriot interceptors themselves, yes, that technology first is restricted to that interceptor system, but the training, the facilities, the broader logistics competencies,

knowledge that come with it, they can, of course, be useful beyond that specific program. And it is also very much a sensitive political decision on the part of the licensor, right? Especially when it comes to systems like Patriot,

which is one of the most valued,

one of the most important, you know, weapons

in the American arsenal, correct me if I'm wrong. - No, 100% correct, this is very, very sensitive. And this is why, you know, license production agreements, they are, and they should be seen as much more

than just a business deal. And very often in the past, they have been used, actually, to, you know, deepen political relations to enhance alliance, cohesion, because they signal trust, right?

If I am, if I as the government, if I'm willing to transfer some sensitive technologies to a country abroad, well, that means I must trust the country, because if I don't trust the country, they can easily divert that technology, right?

They can, they can say, look, you know, they can take that, they can build their own product based on that, they can make all sorts of shady things with it, if they want to, they can sell it further, right? This is also a huge concern, they can let competitors

into their facilities and take a look at, you know,

So this is not something you would simply do

“without thinking very, very hard about it.”

- Okay, now let's talk a little bit more in depth about the patriot itself. The patriot system is very complicated and has many parts to it. Can you describe the various parts of this air defense system

and which companies produce what? - Yeah. So I would say free main components, the one is the interceptor that is most often talked about right now, right, this is the missile system that is used

to intercept the incoming projectile. But of course, for that interceptor to work and be useful, you need a launcher system, at a platform from which you can fire that interceptor against the incoming target,

then you need a radar to locate and track the target

and there's a fourth component that actually for main components, which is a battle management system, which integrates all these different components that they all work together.

And Raytheon is all the main contractor for the overall patriot system. So they produce most of the components. I would have to look up the details as well, but to my knowledge, the launcher is built by Raytheon,

the radar definitely comes from Raytheon, the battle management system,

“I'm not sure I think they're not from Cramon,”

might also be involved at least for the new generation one. And then with the interceptors, you have two main interceptors right now for Patriot.

The one is the Pactu-Chempti,

slightly older, slightly less advanced, which is built by Raytheon. And then you have the more modern, more advanced, Pact3, MSE interceptor, which is built by Lockheed Martin. - And can you describe a little bit more

the difference between these two interceptors, the Pact2 and the Pact3? - Yeah, so the Pact3, MSE interceptors, so the most advanced interceptor for Patriot uses what we call hit-to-kill technology.

So you have a kinetic kill vehicle, which literally is a part of the interceptor that is going to fly directly into the incoming projectile. So you destroy, you intercept the projectile, a ballistic missile by flying directly into it.

And then, of course, pretty difficult, right? People have described it as shooting down a bullet with a bullet, just that in reality, ballistic missile defense is more difficult because the projectiles, they approach each other

with higher velocities sometimes as bullets from a gun do. And of course, both maneuver, right? So this is really, really tricky. It requires really advanced technology. And this is something that Lockheed Martin

have more or less mastered, right? Or at least they're the most advanced company in this space. And if you can master it, if you can build these types of interceptors, they are very effective, which is why Pact3, MSE is widely regarded

as the most effective ballistic missile interceptor at least for short range ballistic missiles, like the Iskander. And the Pact2, ChmT. So this is the other interceptor,

the other main interceptor used for Patriot. Doesn't work, we are hit to kill technology. Instead, it uses a fragmentation warhead, which when it gets close to the target detonates and through the shockwave, through the fragments

that are dispersed outward, destroys the incoming projectile, ideally. They are also some differences with the guidance mechanisms, but those are the main differences. - So am I right in understanding that the US

is the only country in the world that produces and has the right to produce the Patriot launchers

“and the system and everything that is not the interceptor?”

So the radar, the control station, the launchers, that can only be made in the US, right? - As far as I know, yes, I would have to confirm with Japan, but I think they also only are allowed to build the interceptor.

Germany for sure, Germany has been granted a license by Rathion to build the interceptor, but nothing else surrounding it. So yes, with the exception of Japan, which I would have to confirm as well,

they are the only producers of those other components other than the interceptor. - So you've already mentioned briefly that Japan and Germany have been given licenses years ago to make interceptors for the Patriot air defense system.

Can you talk about those deals a little bit because I think they're very illustrative for the future of Ukrainian production? - Yeah, of course. So Japan has a long history in building Patriot interceptors

so that already started before the turn of the millennia

pack two baseline interceptors,

“then they transition to pack three baseline interceptors”

and now in 2025, they have received the first production

contract for pack three MSE interceptors in Japan. And so Japan is the only country outside the United States which is allowed to license produce the most advanced Patriot interceptor. And production numbers a few years ago,

they were at around 30 interceptors per year so really not a lot at all. And it was entirely for the Japanese market so there was no role at all in exporting these systems although they have been in talks

about using Japanese production to backfill American arsenal stockpiles that have been sent to Ukraine. But that's it. There has been talk to expand that production capacity potentially around 100 a year

but from the open sources it's not entirely clear where this stands. The other country that is allowed to produce Patriot interceptors and license is Germany, but not the pack three MSE interceptor

instead the pack two GMT interceptors.

So basically, Germany received the license

from Raytheon for their interceptor whereas Japan received the license from Lockheed Martin for their interceptor. And Germany, they have built up a new facility in Southern Germany with MBDA, Germany for the license production of pack two GMT interceptors

and they're going to produce potentially around 150, 180 interceptors once the facility is fully up and running and it will start production later this year.

“- So in Germany's case it was granted the license in 2022, right?”

- No, so the announcement was made in 2024 so this is when the former post started. We don't know how long they've been talking about this behind the curtain but 2024 is when we receive the confirmation that this will take place. - Okay, but Germany is going to need at least two years

or by the time it starts actually making them, it's going to take them at least two years to get this up and running, right?

- Yeah, so the first announcement came in January 2024,

they started building the facility in November that year, so end of 2024, they will start production somewhere towards the end of this year, so around Fall Winter, 2026 and according to reports, the first full units of interceptors will be shipped sometime in 2027

and transferred to the first customer which is the Bundeswehr, the German Army. - Do your current managed services really help run your operations or are they just running in circles? Running isn't enough anymore.

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- Ok, so now let's talk about the Ukrainian context. First of all, I'm wondering if Ukraine is actually granted a license to build these interceptors. - Ok, so now let's talk about the Ukrainian context. First of all, I'm wondering if Ukraine is actually granted a license

to build these interceptors. - Ok, so now let's talk about the Ukrainian context. First of all, I'm wondering if Ukraine is actually granted a license to build these interceptors.

“Do we know if this is going to be a license for back three or back two?”

- No, we don't have any details yet. I mean, we, you know, right now this is a political commitment more or less because it's Trump, not even a commitment anyway. It's just a comment that Trump made. - Right, it's an announcement.

but Trump sometimes are, so we don't actually know

yet if this will take place, right?

“So this is now, we are probably behind the scenes”

that try and figure out what was meant by that. I'm pretty sure that was some preparatory work done by the manufacturer, because they thought something like this might be coming. And again, they might be also interested. They might be an economic interest to do this.

So I could imagine that there are some some work that was done in the past on this behind the curtains. But yeah, now we have to figure out what this looks like. We don't know, right? There was no indication whether it would be pack free MSE

or pack to gem T, however, I am very, very certain that if this license production agreement comes about, it will concern the pack to gem T and not the pack free MSE. So Ukraine would get a license to build the somewhat less advanced interceptor.

- Why? - Well, several reasons. I mean, you know, if you look at it in 2024,

“the line met a day, they indicated very clearly”

that they want to build pack free MSE interceptors with Lockett Morton in Germany in their new missile facility and onto this. And apparently, and we don't know, but initially there might have been an interest

from the manufacturer to pursue this,

but this never really went anywhere.

And one likely explanation is that either the manufacturer, they lost interest in this and they decided to concentrate their efforts on their home market, the United States, or that the US government was just like never in favor

of this type of technology transfer, which again might be a very reasonable assumption, given how advanced and critical this technology is. But in the end, you know, whatever the reason was, I cannot imagine that this calculation

will fundamentally shift with the context changing. I mean, if you think about, you know, Ukraine, a country, in wartime, a country that the United States probably does not trust as much as Germany, why would they receive this technology

if Germany wasn't good enough for it?

So I would be very, very surprised if there was a change in that policy, and the other factor, of course, is just also technological. Again, we briefly touched up on it, building ballistic missile enterprises, champions league

of missile technology, that's really difficult to do. Ukraine does not have a strong defense industrial base for it, so it might also just be more feasible, much better to just pursue the less advanced option than immediately go for the high tech option.

- Right, okay, the next question I have is, if Ukraine was to get the license, does Ukraine have to actually build these interceptors inside Ukraine, or can it be outside of Ukraine for security reasons?

- No, it could, of course, be outside outside of Ukraine for security reasons and others. In the end, right, license production, it only makes sense, especially now, in the case of Ukraine, in peacetime context

it might be a bit different, but in the context of Ukraine, license producing these missile systems, really only makes sense if you can expand the defense industrial base building these systems, right? If license production just means we're putting

a final assembly facility in Ukraine, then you have gained nothing because all the different components that you need to build, except the seeker, the warhead, the propulsion system, the board computer, the battery, right?

All of these systems, well, they're still produced in the same number, and then it doesn't really matter if I do the final assembly in Ukraine, or in the United States, elsewhere, because the overall number will stay the same.

- Okay, so explain this, what is the right way to do this then? - So the right way to do this if you seriously want to pursue license production in a way that makes sense,

“you have to grow the component production base, right?”

So instead of just building another final assembly facility, that's, not easy, but that's the only less hard step. I have to make sure that I find new suppliers that can build the guidance suite, that can build the warhead, that can build the propulsion unit,

so that I can increase the overall supply base for the system that I'm licensed producing, because only that way I can actually expand the overall production numbers. And that's again, why it's so important

or why it's so beneficial, that if I'm doing a licensed production agreement, that there is a suitable defense industrial base already in the country, because if I have to build it up

- So is Ukraine gonna have to look for all of these suppliers

within its borders? - No need that they have to, right? They could, and it really depends and also on how that licensed production agreement is negotiated.

And then you really get into the intricacies of the contractual work that will be done. I mean, it could also be more of a pan-European licensed production agreement where we're saying that, Ukraine is building maybe a contributing,

the warhead technology, right? So they are trying to build up a supply chain for the warhead, whereas we try to source the seeker technology from outside, might be from deal defense, might be from Talas,

or, you know, another-- - What are all of these things you're saying?

“- So those are other European manufacturers, right?”

So deal defense would be a German,

missile manufacturer, Talas, a big French manufacturer, base systems, big British manufacturers. So they could all be integrated into the supply chain. And just then it also gets more complicated again, because you have more borders involved, more legislation,

more governments without interest. So, but yeah, this is all speculative, right? But this is certainly something you could do theoretically if you want to speed up things, this might be the only feasible way.

- Okay, so a lot is gonna depend on what the actual deal looks like, right? - And you know, you could not even make the argument, okay? So what's the point in building up, you know, a production line supply chain now in Ukraine,

or pan European, you know, then you could also just say, let's invest some money and expand the production facility

in Germany that already exists, right?

Maybe that's the easier way, and then you just say, look, everything that is coming out of this expanded production facility just goes straight to Ukraine. By the way, a lot of the production that's going to come out of the suffered Germany facility is already destined for

for Ukraine, at least indirectly. - So I guess, I mean, for Ukraine, of course, this is about trying to be a self-sufficient responsible, but as you described that relies on the supply chain, and if Ukraine can't localize as much

as that is possible, then, you know, this is a little counterproductive, right?

“- Yeah, so they're gonna be competing interest, right?”

So I would say politically, economically, it of course makes a lot of sense for Ukraine to localize as much as possible, not least, you know, because all of this is extremely lucrative. - This is lucrative, yeah, for several reasons, right?

If I have a lot of the added value being produced in Ukraine, that's, you know, text money flowing back to the government when they place orders for these systems, that's one benefit. Again, the defense industrial base

that you're gonna grow in advance, that's another benefit, perhaps after the war but even if this is a longer-term project, let's say it takes three to four years to build up that supply chain, if you have it in your country,

this could be very lucrative in the future, because, you know, patriot demand is probably not gonna decrease very suddenly, so this could be useful for export contracts later on. So many reasons why you would want to localize

as much as possible of that supply chain, but if it's just about capability, right now, right? Then, well, in a short term, there's nothing really you can do anyways, but then it might be better to say, look, we go softer on the localization

and instead prioritize, you know, moving some of it at least outside to speed up the whole process. - And what about the actual engineers working on this? I mean, is there some massive gap

in just training and qualifications when it comes to this? Like, does Ukraine even have enough brains and people to do this work? - I don't think that's the main bottleneck. I think that's really okay, you know?

Ukraine has very talented engineers as a result of the rest of Europe, so that's totally fine. You can train them, you can teach your processes, you can ship the machines that you need, that's all fine. The bigger issue is what we call certification.

Let's say, I want to expand the production base of these interceptors, and I want to integrate a new component supplier, I have to certify that supplier to for it to become part of the supply chain. - Certify through whom?

- So certification through the, again, I could evolve different actors, but I mean, through the manufacturer at home, right? That is a big role, the US government, probably once also some type of certification,

some type of reassurance. I mean, you know, this is detailed knowledge, which I don't have, I haven't been involved myself, but these are agreements,

“but that's how I imagine it would go, right?”

Because, for example, the US government, again, they want reassurance that their technology is not diverted.

is, for example, is nothing to do with building up the technology. And it's also just about reassuring the licensing government that, you know, the technology is safe. So they want to know, hey, what are your protocols

“for making sure that that technology is not stolen?”

Who do you let into the facility? How do you make sure that Russian spies or French spies, right? Who might be interested in some American ballistic missile defense technology, that they don't get into the facility, right?

These are fine questions that you are allowed to ask as the licensor and that the licensee has to answer. - Okay, when you get a license to produce a certain type of technology, am I right in understanding that you're only allowed

to replicate that exact technology, you know, sort of ward by ward as the original model. And you're not allowed to sort of put a spin on it, adjust it to your battlefield needs, like, you know what? I mean, you're not allowed to develop it in any way,

which is probably what some Ukrainian companies would want to do because as far as understand, Ukraine has been using patriots a little bit more creatively and a little bit differently than the Americans and their LS have traditionally used them.

- Yeah.

“- I mean, they've used them operationally different, right?”

As far as we know, they haven't changed any of the underlying technology. - I mean, you know, if do you cry in, and I would say if you used them domestically,

and if I, yeah, I mean, first of all,

that the missiles would be built to standard of the manufacturer. - Because again, you, you certify the supply chain to produce this specific type of product. If you change processes in the supply chain, that certification lapses and suddenly

you're not allowed to produce them anymore. Once the product is final and assembled and, you know, shipped to the end user, I feel radically, they can use that for whatever purpose and they can do whatever they want to with it.

So if they would want to make modifications, that might not be very well liked by the United States, but they could do it theoretically. I mean, it gets more tricky when exports are involved. So let's say Ukrainian supply chain,

manufacture something, a patriot interceptor and ships it to an export customer. Then while the export customer and the United States would expect that this is a system specific to build to the standards of what's coming out of the United States, right?

So then I would say you're probably not gonna do it. - Okay, so considering everything we've just discussed, what could be the perspective timeline for this? What are your expectations? Like when is Ukraine when you be able to actually produce

its own patriot interceptors? You probably hate this question, I know, but I gotta ask it. - No, that's fine. I mean, optimistically, 12 to 24 months,

realistically more than 24 months, two to three, two to four years. And you know, again, if you would probably, if you would want to localize everything, things take longer.

If you're willing to move some component production abroad, involve, for example, German component suppliers and scale them, maybe things can go faster, but it's in any case, it's not a short-term fix, right? This is something that will have

effect over the medium to long-term.

- Okay, well Fabian, as always,

it was a pleasure speaking with you. Thank you for coming on. - Yeah, thanks so much for having me. (upbeat music) - The law of her podcast is produced by the law of her institute.

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