Legal Game of Drones: Part II

Last month I looked at the quickening pace at which unmanned aerial vehicles (UAVs), popularly known as drones, are being used in Canadian and foreign airspace. UAVs are finding compelling applications in agriculture (in Japan, 90 per cent of crop spraying is now carried out by UAVs), industry, law-enforcement activities and on Hollywood movie sets, to name but a few. This month we look at the legal and regulatory aspects of UAVs. The legal questions raised by UAVs read like a law school exam. Lots of interesting fact patterns drive a wide range of legal considerations. And keep in ...
Legal Game of Drones: Part II
George Takach, McCarthy Tétrault LLP

Last month I looked at the quickening pace at which unmanned aerial vehicles (UAVs), popularly known as drones, are being used in Canadian and foreign airspace. UAVs are finding compelling applications in agriculture (in Japan, 90 per cent of crop spraying is now carried out by UAVs), industry, law-enforcement activities and on Hollywood movie sets, to name but a few. This month we look at the legal and regulatory aspects of UAVs.

The legal questions raised by UAVs read like a law school exam. Lots of interesting fact patterns drive a wide range of legal considerations. And keep in mind, these are still very early days for commercial UAV use — so there’s much more finicky legal problem-solving to come in the next few years.

> Licence to Drone
So you want to use a UAV in a commercial application? One of the first considerations is your requirement for a licence from Transport Canada. The federal government regulates the use of Canadian airspace, and a good thing too — without a regulatory system, airplanes would be crashing into one another with some regularity in the skies over this country.

For particular UAVs, and certain uses of them, the federal regulatory regime is getting simpler. It’s fairly easy to get permission if you have a certified pilot operating the UAV and you keep the UAV under a 400-foot altitude, and you use it only in daytime and always within sight of the operator. Take, for instance, a scenario where a forestry company wants to use a UAV to take image and spectroscopy scans of their forests, so they can track a bug infestation. That’s fairly straightforward from a Transport Canada licensing perspective, so long as you use the UAV at a certain “site” (i.e., the side of a particular mountain). And interestingly, it’s actually easier right now to get such a licence in Canada than the United States.

Current UAV regulations, however, will come under huge pressure over the next few years as the uses for drones expand dramatically. What if you want to operate the drone at night? Or without a certified pilot — instead, just someone who is well-trained on the device and up to speed on safe operation techniques?

The biggest obstacle under the current regulatory environment is the one that limits use of the UAV to visual sight lines. This won’t work, of course, for UAV logistics delivery devices, of the kind that Amazon is planning for its Prime Air service (as discussed in the last column).

I anticipate that these limits will be relaxed only once Transport Canada is convinced that new automatic UAV peer-to-peer device detection and avoidance technologies are sophisticated enough to ensure that UAVs don’t crash into one another when they are in flight.

> Privacy Concerns
Assuming you’re licensed and ready to fly your UAV, another legal issue involves privacy. The Transport Canada licensing system noted above is generally aimed only at safety, not concerns related to privacy. For the latter, the office of the federal Privacy Commissioner has signalled it is following the UAV phenomenon very closely.

Using the aforementioned forestry example, let’s say you’re using the UAV to track the performance of employees working in the bush. If one of your staff launches a complaint, the Privacy Commissioner will presumably be concerned. There is a fairly rich jurisprudence regarding employment workplace surveillance from which to draw guidance.

Or consider another scenario. Your neighbour is selling her house, and her agent gets a photographer to use a UAV to take some bird’s-eye-view shots of the property and surroundings — and your own backyard is captured in those pictures. You value your privacy, and have the 12-foot hedges around your backyard as proof of that. You simply don’t want anyone knowing you have an ornate sculpture garden behind your house.

Even with Canadian judges now recognizing a private right of action for violation of privacy in certain circumstances, the interesting question is whether this real estate UAV example could trigger such a lawsuit. Much will depend on whether you have a reasonable expectation of privacy in your backyard, and the lengths to which you go to block out peering eyes by growing dense hedges — or better yet, building a solid, opaque fence.

> How High a Fence?
Speaking of fences, what if you happened to be the operator of a sports team that plays in an open-air arena, and a broadcaster that has not paid to officially televise your games starts flying a few UAVs with high-powered video cameras over your arena, capturing the action on your field and streaming it online to paying subscribers.

Over the past century, when similar unauthorized entrepreneurs built scaffolds higher than your fence to look in on the action and then transmit the play-by-play developments to listeners by radio, some courts said that was legal; if the sports facility operator wanted effective exclusivity, they had to build an even higher fence.

It will be interesting to see if today’s judicial answer to the UAV situation is going to be “your arena needs a retractable roof if you want to keep out the drones.”

> From Nuisance to Trespass
There will be myriad uses of UAVs over the coming years that inadvertently implicate an adjoining property. I think it will be fascinating to see if some of these activities form the basis of a cause of action in nuisance. In other words, will there be sufficient interference with the enjoyment of land that a court will grant the impacted landowner a remedy?

In some cases, the problematic behaviour will not be ancillary to the UAV’s function — indeed, it will be intended to annoy, or even to retaliate against the people next door in some neighbourhood dispute. One homeowner, for example, will try to get up the nose of a neighbour by hovering a UAV over the latter’s backyard. Or it might be coupled with some voyeurism. The fact patterns will be legion and varied.

> Legislating Drone Behaviour
In anticipation of unruly or just plain unneighbourly drone-related behaviour, a number of jurisdictions (but especially US states and cities) have begun to pass legislation addressing drones.

Some regulatory provisions are very broad, such as the law that stipulates that a homeowner has a cause of action if the drone operator flies over the plaintiff’s property at under 400 feet and does not stop doing so after an initial warning. In another one, there is a prohibition against flying a UAV to spy on competitors. Another approach has been for a municipality to declare itself a “drone-free zone.”

A different legislative approach focuses on specific activities where a UAV might be deployed. In one US state, it is now unlawful to use a UAV to hunt animals; in another, it is an offense to use a UAV to interfere with another person’s hunting. (This latter law is in response to an animal rights group that uses UAVs to take photos of hunters engaging in illegal activity.)

While we’re discussing drones and firearms, it’s worth noting that some of these laws prohibit the weaponization of UAVs, prohibiting even law enforcement from having this capability. In that regard, it is interesting to note that a few years ago libertarian-minded Ted Cruz, now running for the Republican US Presidential nomination, sponsored a bill aimed at preventing the United States federal government from using drones to kill US citizens (presumably in response to the number of assassinations carried out by American military drones in foreign lands).

> Drone Makers Beware
Just a couple of thoughts if you’re thinking about going into the business of building or operating unmanned aerial vehicles on a commercial basis.

First of all, you wouldn’t be alone. One drone manufacturer is already very aggressively building a portfolio of drone-related patents. They have made it very clear they want to “own the space.” They have booming sales, and now they want to buttress their position through an offensive intellectual property posture. Therefore, as with so many of today’s tech-oriented businesses, understanding the dynamics (and the risks and opportunities) of patents is not a “nice-to-have,” but becomes a core competency of what you do.

Then there’s the risk. And where there’s risk – whether on the IP or privacy front, or from drone collisions – there usually is also insurance. Therefore, it is no surprise that some insurance companies are quickly becoming experts in drone technologies and business models. Indeed, some insurers are themselves deploying UAVs over hard-hit disaster sites to better and more quickly get a handle on the amount of damage and loss in the area.

Notwithstanding this early-stage adoption by some insurers, soon all property and casualty insurers will need to review and update their policies in order to better address drone-related risks. And companies that operate UAVs, of course, should review their insurance policies to ensure their activities are covered by their traditional policies — or perhaps they would do well to call their insurance broker and upgrade their coverage.

This has been a broad brushstroke treatment of some of the more obvious legal flashpoints involving unmanned aerial vehicles. These, and others, will invariably come to light as the UAV industry develops, and as widespread adoption across a large number of sectors becomes the norm.

Stay tuned for the ride — it’s bound to be quite, ahem, elevating.

George Takach is a senior partner at McCarthy Tétrault LLP and the author of Computer Law.

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George S. Takach