On February 15, 2015 the Federal Aviation Administration (FAA) issued a long-awaited Notice of Proposed Rule Making, proposing regulations for the use and operation of Small Unmanned Aircraft Systems (UAS), better known as drones. The proposed rule would generally apply to UAS that are less than 55 pounds, other than model aircraft. 

In sum, the concept of drones delivering packages or pizzas to your home is still many years away, but the FAA is nonetheless signaling its willingness to allow private commercial drone operation at some levels, with relatively minimal governmental interference. Industry experts were concerned that bureaucratic limitations such as filing flight plans or restricting certain payload (cameras, lighting, sensors, etc.) would stymie development of this new technology.  But the newly proposed rules should open up drone technology to multiple commercial applications in industries such as entertainment, infrastructure inspections, surveying and farming. 

The proposed rule requires drone “operators” to be at least 17-years-old, obtain a license, pass an aeronautical test (every 24 months), maintain inspection records, and report incidents resulting in property damage or personal injury.  Under the proposed regimen, UAS could only be flown in daylight hours, could not exceed 100 mph, and would not be permitted to operate at more than 500 feet above ground level or over people other than the operators. In perhaps the most restrictive limitation on the use of drones for commercial delivery, the UAS would have to remain in the visual line of sight of the operator at all times. The FAA is specifically seeking comments on handling this restriction in light of the continual advancement of see and avoid technology and advises that it placed no definitional restriction on what the term means other than the limit of what a human can see unaided, creating a likely source of dispute and continued discussion.  The proposed rules do not require any specified level or type of insurance coverage, leaving the issue to the discretion of the market participants to consider the sufficiency of their existing coverages.

These proposed Federal rules are just one facet of potential regulation that this emerging industry could face. As it stands, the existing Section 333 exemption process remains the only option to legally operate commercially while the proposed rules are pending. The FAA has recognized that this exemption process should also stay available after issuance of the final rules in the event the operator wishes to make a use outside what the rules eventually provide.  Many states are also considering legislation that would restrict the operation of UAS to balance privacy interests, and address potential use by law enforcement. Clients may want to consider the effect of drone usage and operation on their own businesses. Manufacturers in the UAS supply chain could see growth in production and demand. Companies that anticipate the use of drones in their business will need to consider liability issues, potential misuse by employees and other risks, as well as mechanisms for ensuring regulatory compliance. Finally, anyone developing new technology or capabilities in this rapidly developing industry should consider a full regimen of appropriate IP protections.

The full text of the proposed rule can be found by clicking here. Comments to the proposed rules are typically due within 60 days of notice in the Federal Register. That notice is expected very soon, and will start the clock for comment.