UAV Law Takes Flight

When an Unmanned Aerial Vehicle (UAV) struck the Great Wheel on Seattles waterfront last November, it was a vivid demonstration of what can go wrong as more drones take to the sky.

UAVs, once used mostly by hobbyists and the military, are now undergoing rapid advances in technology that unlock their potential to revolutionize commerce in dozens of areas from delivering products to monitoring farms.

If yours is among the hundreds of companies considering ways to integrate the use of UAVs into your business, there are some legal issues to consider.

1. UAVs are regulated by the FAA. When a consumer flies a UAV, there is minimal oversight, but when a business starts using one for commercial purposes, a whole host of regulations apply. The Federal Aviation Administration recently announced new regulations for the commercial use of UAVs that weigh less than 55 pounds. Those new rules went into effect in August. They include things like maximum altitude and speed as well as restrictions on flying over people. These new regulations affect how businesses can use UAVs. One of the most significant restrictions is a requirement that a UAV stay close enough for its pilot to see the UAV with the naked eye. While this limitation can be waived by the FAA, without such a waiver this significantly limits how far UAVs can fly, which also limits the type of work they can perform. While the new rules curtail some uses, they still allow a wide range of commercial UAV uses and make it easier and cheaper for companies to begin UAV operations.

2. Businesses should be aware of the liability risks involved in manufacturing or operating UAVs. Like all vehicles, UAVs have the potential to get into accidents, causing injuries or property damage. Luckily, no injuries were reported in the Seattle Great Wheel incident. But businesses entering the UAV space need to think about ways to reduce the risks associated with such accidents. This involves everything from analyzing their operations or products to understand how to reduce the risk of accidents to taking steps to address the consequences of potential accidents by, for example, obtaining insurance.

3. Companies need to protect their innovations. People will look back on this period as the early days of commercial UAV technology and, as is usually the case, technological advances tend to occur most rapidly during this period. The businesses that succeed and survive will be those that anticipate the technical and regulatory challenges facing widespread commercial use of UAVs and develop the technology to address these challenges before their competitors. Businesses must then take the necessary steps to protect their intellectual property with patents or, when appropriate, trade secret protection.

Much like the dot-com startups of the late 1990s, very little capital is required to develop new UAV technology. That low cost of entry is likely to spur competition from all quarters. Businesses without patents of their own to assert or license may find themselves without bargaining chips if they are the subject of a patent infringement suit from a competitor.

There is also a long-term reason to consider intellectual property. When the UAV industry matures and consolidates, as all new industries eventually do, businesses must have some assets of value for sale or merger. Although a few of the larger players may have significant capital in the form of things like equipment and infrastructure, the most significant asset of most smaller players will be their intellectual property.

These are just a few of the concerns that businesses should think about as they enter the UAV space. Privacy and insurance coverage are among the additional concerns to consider. When trying to navigate this dynamic and growing area, businesses entering the UAV space should look to legal counsel and professionals experienced in managing the intricacies and evolving rules before taking to the skies.

Steve Arnett is a partner in Perkins Coies patent practice. Dan Ridlon is counsel at Perkins Coie.