On 17 October 2017, Hogan Lovells, London hosted its annual ‘Intellectual Values’ seminar which this year focused on the ‘connected world’. Paul Joukador, a partner in our London Tech Hub, gave a talk on the commercial opportunities and challenges arising from drone technology.

A drone is an unmanned air-borne vehicle that shares what it sees with humans on the ground or other machines. Drones are currently widely used by military organisations across the world but their potential as commercial tools remains relatively untapped. However, globally, companies are waking up to the value of using drones. A PwC report has estimated the global market value of Unmanned Aerial System-powered solutions at over $127 billion.

Amongst their many commercial applications, drones can capture large amounts of valuable data, in places that are typically too hard or too dangerous to reach, and process and transmit that data back to the operator instantaneously. This application is of value to a large number of industry sectors, from construction to infrastructure to graphic design.Commercial drone operations must comply with the relevant laws and regulations governing their use. In the UK, drones are regulated by the Air Navigation Order 2016 under the supervision of the Civil Aviation Authority (”CAA”). Some of the key obligations to be aware of include that a drone must not endanger any person or property, all commercial drone operations must purchase third party liability insurance, permission must be sought from the CAA for all commercial drone operations and export control rules may apply when transporting drones and associated software out of the UK. Failure to comply with the necessary requirements can result in civil or criminal liability for the owner or operator of the drone.

Once drones are up in the air, a number of operational risks arise. Drones used for data acquisition purposes must comply with the relevant privacy and data protection laws. In the UK, the same rules that apply to CCTV will apply to drones, namely that recordings must be proportionate and for a specified purpose, have a legitimate basis and individuals must be notified if a drone captures their data.

On the flip side, companies are concerned that drones could be used by their competitors as a means to capture their trade secrets and confidential information. At present, there is no dedicated ”anti-drone” law to prevent so-called ”industrial espionage”. Under limited circumstances, it may be possible for a victim to establish that a trespass or nuisance has been committed against them. However, for many, such claims will be difficult to prove and companies may be better off looking at other ways to protect themselves. There are a number of counter drone technologies out there but companies should tread carefully to ensure that they only take lawful measures.

Companies outsourcing a commercial drone function should take care to do proper due diligence on their external provider, since liability primarily lies with the drone owner and/or operator.

Presently, drone regulation differs quite substantially between the major drone players (Europe, the US and China). However, players can expect to see new legislation, tighter regulation and harmonisation in the future, and should stay alive to developments as the commercial drone industry grows.

If you would like to view the discussion please click here.