United States: New Regulations on the Horizon for Commercial Drones

Currently, the use of drones or unmanned aircraft systems (UAS) for commercial purposes in general is not permitted in the United States, although there is one exception. The Federal Aviation Administration (FAA) allows preauthorized companies to use drones to collect aerial data. The conditions for this type of use are limited; however, that is about to change. The FAA is currently working on a framework for regulations governing the commercial use of drones that are expected to be implemented in 2017. Once these rules are put into place and the ban on the commercial use of drones is lifted, we expect the growth of this industry to explode.

Naturally, safety is a priority for the rule makers, and as such, it is expected that the new regulations will likely impose minimum design safety standards for UAS used commercially. While these safety standards are geared toward reducing the possibility for accidents and injuries, they inevitably raise the stakes for manufacturers and operators of these devices in terms of product liability risk exposure.

Once the FAA permits the general use of drones for commercial purposes, it is anticipated that commercial drone operators will offer a diverse package of services, beyond just aerial data collection and photography. Drones have already been developed to replace the postman. Specialized drones have been tested and developed to deliver packages to customers' doorsteps. The ability for an online retailer to provide a package with the use of a drone as opposed to traditional postal channels will inevitably increase profit margins and drive market share to online retailers. Also, in rural areas of the country where it has not been economically feasible to have Internet service, Internet Service Providers can use solar-powered drones to provide wireless Internet service. There is no question in our minds that the emergence of this new technology in the marketplace will change dramatically the legal landscape in the area of product liability. Thus, the manufacturers, service providers and insurers that enter this space must be prepared for the product liability risk exposure that coincides with this efficient but young technology.

Besides the FAA's rules regulating the commercial use of UAS, most states are debating various bills intended to regulate drone usage. The current legal framework on the federal and state levels is very much in flux and drone manufacturers, drone operators and their respective insurers should be aware of the current trends in drone regulations across the country to ensure they operate within the law.

The FAA distinguishes between three classes of drone users: public operators, civil operators and model aircraft operators. The first class is currently the most straightforward: public or governmental operators are granted authority for drone use on a case-by-case basis by the FAA. The operators must also be licensed pilots. The requirements become significantly more complicated when discussing the other two classes. Section 333 of the FAA Modernization and Reform Act (FMRA) is an exception to the rule banning commercial drone use. This exception allows companies to use drones for commercial purposes after obtaining specific government approval and those operators are required to work within a predefined set of conditions determined by the government. In contrast, under the current framework of the law, model aircraft operators do not need FAA authority to fly a small drone, but are still required to keep their drones within sight of the operator and must stay below 400 feet.

In early April, a report was submitted to the FAA by the Micro Unmanned Aircraft Systems Aviation Rulemaking Committee (ARC) to provide recommendations on a regulatory framework for the classification and operation of micro UAS. The committee comprises 27 members consisting of companies from a variety of sectors: aviation associations, drone manufacturers, agricultural associations, news/media associations and others. The committee was tasked by the FAA to "develop recommendations for a performance-based standard for the classification of micro UAS, identify means-of-compliance for manufacturers to show that unmanned aircraft meet the performance-based safety requirement, and recommend operational requirements for micro UAS appropriate to the recommended performance-based safety requirement." Considering the fact that these products will be air-bound once they are unleashed on the marketplace, we anticipate there will be strict regulations implemented by the government that will set forth the minimum safety and quality standards to which manufacturers must adhere in the construction of these devices.

In the report, ARC states that it was most focused on the issue of drone flight over people and, in attempting to solve the issue, ultimately identified four small UAS categories defined by level of risk or injury posed. Each category is created by identifying a risk threshold related to the weight of the drone, its impact energy, various performance standards and operational restrictions. The following briefly summarizes the categories as proposed by ARC:

  • Category 1: drones that weigh 250 grams or less. Due to the minimal level of risk, these drones should be allowed to fly over people without restriction. Drone manufacturers should clearly state the weight of the drone on their product and certify the weight in a manner acceptable to the FAA. Drones in this category would require a manufacturer's certification that there is no more than a 1 percent chance that the maximum force of impact would cause a serious injury.

For categories 2, 3 and 4, a small UAS may operate over people if it does not exceed the impact energy threshold specified for each category. These thresholds would be certified by the manufacturer using industry-consensus test methods.

  • Category 2: the micro UAS may operate over people if the manufacturer of the UAS certifies to the FAA that the UAS does not exceed the typical impact energy threshold and that it complies with industry consensus performance standards. Other requirements would include observing the operator's manual, maintaining lift-off distances of 20 feet above people's heads or 10 feet laterally away from people, and not operating so close to people as to create an undue hazard. The manufacturer would again need to certify that there is no more than a 1 percent chance that the maximum force of impact would cause a serious injury.
  • Category 3: drones in this category would not be allowed to operate over crowds or dense concentrations of people. Their use would be limited to closed or restricted work-site use or where the flying over people is limited to those involved in the operation. The category 2 limitations also apply to this category. The manufacturer's certification in this category would need to certify a 30 percent or less chance that the maximum force of impact would cause a serious injury.
  • Category 4: drones in this category would be allowed flight over people, including crowds or dense concentrations of people, if, in addition to the restrictions set forth in category 2, the operation is conducted in compliance with a documented risk mitigation plan developed and adopted in accordance with industry consensus standards. The manufacturer's certification in this category would also need to certify a 30 percent or less chance that the maximum force of impact would cause a serious injury.

The ARC recommendations add that to demonstrate qualification for one of the above categories, the manufacturer of the UAS would need to submit a declaration to the FAA, label the product accordingly and in line with industry standards, and provide a suitable operator's manual. For an in-depth analysis, please see the ARC report.

The recommendations set forth by ARC show a clear effort by manufacturers to lessen the restrictions set forth by the FAA in the proposed rules released in February 2015, thereby potentially opening the door for commercial use of drones in populated areas. Implementation of these recommendations would allow companies to implement drones for a myriad of commercial applications.

Furthermore, should the FAA ultimately implement some of the ARC's recommendations, future product liability claims involving drones would boil down to the exact industry consensus standards for drones, what methods manufacturers used to determine in which category their drones fall and whether the models used to determine potential kinetic-based injuries were scientifically accurate. In future posts, we will address the need for manufacturers to ensure that their drones comply with any existing rules on a state level and that their operator's manuals warn against the various ways drones can be misused.

Drone use continues to rise throughout the world and as is the case with any new rapidly evolving technology, the legal landscape is still uncertain.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.