United States: Drones & Trade Secrets – How Low Can They Go?

Last Updated: May 16 2016
Article by R. Wayne Bond

This Blog first addressed the threats drones pose to the protection of Trade Secrets in June of 2014.1 Since then, drones continue to proliferate at a dizzying pace. Everybody and their brother has one, and drones are becoming much more sophisticated and advanced. 2 The challenge is for the law to keep up with the technology, and so far, the law has not done a very good job.

In many ways, the challenge to protect trade secrets from drones is similar to the challenge to comply with legal data privacy obligations. In both situations, bad guys keep coming up with new ways to invade privacy and misappropriate secrets. The legal obligations remain generally the same, but the playing field keeps changing as technology advances.

For data privacy, there is no clear federal law,3 but state laws frequently use language such as "reasonable security procedures and practices to protect the information from unauthorized access." For trade secrets, the legal standard is found in the Uniform Trade Secrets Act (UTSA) adopted by 48 states4 and there should soon a federal version with the Defend Trade Secrets Act of 2016 (DTSA).5 The UTSA says two things relevant to drones. In order to be a trade secret, the information must not be publicly available, and a business must take reasonable steps to keep the information confidential.

Trade secrets are only protected as long as they remain secret. If a trade secret becomes known, it is like trying to push toothpaste back into the tube — you can't do it. All you can do is seek legal recourse. But in order to be successful in seeking such recourse, you must be able to show the information was not "publicly available" and you took "reasonable steps" to keep your secrets secret.

This leads us back to drones. In law school, we learned the common law principle of "ad coelum," which says property rights extend vertically up and down.6 Aviation changed upward vertical rights (a landowner's rights no longer extend to the "heavens"), but it is still not clear where they stop. In 1946, the U.S. Supreme Court declared airspace is now a "public highway," but consistently flying noisy planes 83 feet above a chicken farm can be an unlawful taking of property.7 In 1970, the 5th Circuit held DuPont didn't voluntarily disclose its trade secrets to someone spying via aerial photography on a methanol plant that was under construction.8 It has been a long time since these two cases were decided, and there has been very little case law on these issues since then. How relevant are these cases today in the age of modern drone technology when the standard for protecting trade secrets is "reasonable"?

Federal law remains unclear regarding the height at which a landowner can express exclusive dominion. Some have advocated that landowners should be allowed to exclude drones from airspace above their land up to a height of 500 feet.9 State laws are starting to come out and they naturally vary,10 while states are taking a wait-and-see approach. New legislation has been proposed to protect privacy rights,11 and much has been written about Fourth Amendment ramifications and our "reasonable expectation of privacy,"12 but how does this impact business owners and their trade secrets? What can a business do to protect its trade secrets in an increasingly invasive drone age? Indeed what must a business do to protect its legal right to claim its confidential information is a trade secret at all.

And what if the drone is flying really low? What if the drone is just outside your office window? Does it matter if your office is ground level or on the 25th floor?

Rapidly advancing drone technology changes things for business owners. While satellites with sophisticated cameras can read the screen on a laptop while the user is sitting on a park bench, satellites with this capability are not in the hands of the typical business competitor — at least not yet — but drones are.

So what reasonable steps must businesses take to protect their trade secrets from drones?

As tempting as it may be,13 shooting drones down is not a good option. Federal law makes it a crime to destroy a civil aircraft , and there are several reports of state and local criminal charges being filed against property owners who shot at drones like they were sporting clays.14

Signal jamming is one possibility.15 The Secret Service started experimenting with this after a drone crashed on the White House lawn.16 However, this presents legal problems for private citizens since federal law prohibits using jamming equipment that interferes with cellular services, police radar, and GPS, and Wi-Fi.17

Geo Fencing is another option. Airports increased their research in this area after a drone recently collided with a passenger plane landing at Heathrow Airport outside London.18 This technology prevents drones from flying over geographic locations by blocking the GPS coordinates. But this only affects drones that need GPS equipment to operate. It won't prevent someone from flying by line of sight.

Other technologies include sophisticated listening equipment able to detect and locate drones based on the sounds they make. Specialized radar technology is being tested that works differently from standard radar which has difficulty spotting slow-moving objects. Drone spoofing is a technology that involves sending fake GPS signals to the drone. Hijacking (or "skyjacking") drones involves taking over their navigational control systems. One company is even experimenting with security drones that are able to capture spy drones in nets that dangle from the security drones.19 Drones armed with "net guns" were used during last year's Boston Marathon to capture any drones violating an airspace ban along the race course.20

Basic window covering should also be examined. While many states have "Peeping Tom" laws that make it illegal to look in windows, their applicability to drones spying on places of business is largely untested. In the new drone landscape, businesses should consider blocking all visibility through windows to interior spaces where confidential information exists and might be viewed with powerful new cameras — especially now that drones can bring those powerful new cameras even closer.

Finally, consider whether "good" drones should be used to proactively protect trade secrets, instead of just worrying about defending against "bad" drones controlled by competitors. Good drones could be effective enhancements to traditional surveillance systems already being used by businesses concerned about protecting their trade secrets.

Businesses must strike a balance between getting work done freely without restrictions and doing what is necessary to protect company secrets. Make sure your next trade secret audit includes the exposures created by modern drone technology and reasonable countermeasures available to minimize such exposure, while also considering proactive ways drones might be used to enhance a business' overall security.

Footnotes

1 See " Josh Salinas Explains How Drones Could Pose a Threat to the Protection of Trade Secrets"

2 See, e.g., New announcements such as wearable cameras that can fly to take selfies, and the proliferation of indoor drones.

3 There is no comprehensive federal law providing a uniform compliance standard for information security best practices.  U.S. businesses must comply with 47 different states' laws governing such issues.

4 The UTSA, published by the Uniform Law Commission (ULC) and amended in 1985, was recently adopted by Texas, which became the 48th state to enact some version of the UTSA. New York and Massachusetts are the only states that have not enacted the UTSA.

5 Congress passed the Defend Trade Secrets Act of 2016 in April. The DTSA has strong bipartisan support, and President Obama has indicated he will sign it into law.

6 Taken from the Latin Cuius est solum eius est usque ad coelum (et ad inferos) meaning "for whoever owns the soil, it is theirs up to Heaven (and down to Hell)."

7 United States v. Causby, 328 U.S. 260 (1946).

8 E.I. DuPont deNemours & Co. V. Christopher, 431 F.2d 1012 (5th Cir. 1970)

9 Rule, T. A. (2015). Airspace in an Age of Drones. Boston University Law Review, 95(1), 155-208, at p. 159

10 E.g., Nevada prohibits drones from flying less than 250 feet.

11 E.g., Sen. Edward Markey (D-MA) is pushing legislation known as the Drone Aircraft Privacy and Transparency Act.

12 See, e.g., Matiteyahu, Taly, (2015). Drone Regulations and Fourth Amendment Rights: The Interaction of State Drone Statutes and the Reasonable Expectation of Privacy, Columbia Journal of Law and Social Problems, 48, 265-308.

13 The Colorado town of Deer Trail made national headlines when it called for a vote on issuing hunting licenses for drones.

14 See, e.g., http://www.cnn.com/2015/09/09/opinions/schneier-shoot-down-drones/

15 See, e.g., http://makezine.com/2015/10/16/research-company-takes-aim-uavs-portable-anti-drone-rifle/

16 See http://www.popsci.com/secret-service-tries-jamming-drone-signals-near-white-house

17 See https://www.fcc.gov/general/jammer-enforcement

18 See https://www.theguardian.com/technology/2016/apr/18/drones-government-labour-ba-rules-drones-heathrow-incident

19 See "Copping a 'copter" in the May 2, 2015 issue of The Economist

20 https://www.bostonglobe.com/metro/2015/04/21/boston-marathon-drone-detection-firm-brought-net-guns/2oSp9Brfn5rFOIYqRJmP3H/story.html

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