Legal Game of Drones

I was sitting on a chairlift recently at a ski resort, and the stranger next to me had an unusual backpack with him. Turns out it was a drone, equipped with a fancy camera. He and some buddies were going to take some very neat action skiing shots and videos using this drone hovering above them. He was very excited. The hobbyist drone market is growing rapidly. And we all know how important large military drones are to the US fighting effort in places like Iraq. But what might surprise you is that the commercial drone market is ...
Legal Game of Drones
George Takach, McCarthy Tétrault LLP
I was sitting on a chairlift recently at a ski resort, and the stranger next to me had an unusual backpack with him. Turns out it was a drone, equipped with a fancy camera. He and some buddies were going to take some very neat action skiing shots and videos using this drone hovering above them. He was very excited.

The hobbyist drone market is growing rapidly. And we all know how important large military drones are to the US fighting effort in places like Iraq. But what might surprise you is that the commercial drone market is also exploding, and the related legal and regulatory issues are fascinating.

> What’s in a Name
First, a word on nomenclature. For many people, the word “drone” means the rather large, unmanned, fixed-wing aircraft that militaries use to deliver bombs remotely in faraway places. The civilian versions are much smaller machines, generally weighing between 3 and 30 kilograms. These devices are more typically called unmanned aerial systems (UASs) or unmanned air vehicles (UAVs). Therefore, given that my focus is on these commercial units, I’ll use the acronym UAV.

While today’s commercial UAVs are quite a bit smaller than their military-oriented ancestors, they are every bit as sophisticated. To see what I mean, take a look at the website of Aeryon, a leading designer and manufacturer of small UAVs.

> A Made-in-Canada UAV
Aeryon, by the way, is a wonderful Canadian tech success story. Founded by three University of Waterloo grads, the company’s products are very clever. The core flying unit is compact, but full of high-tech intelligence — like an anti-wind gust feature that can keep the unit steady in high winds, which is a godsend for precision imaging.

The various payload units for the Aeryon UAV snap in and out like different cutting attachments on a food processor. Brilliant. And you control the UAV with a tablet that comes with the system, and that then integrates the digital feed from the UAV’s payload with your GPS or other information pre-loaded or connected with the tablet. More genius.

So, for example, let’s say you operate large power-generating windmills. You can use the Aeryon UAV to hover around the tops, and up and down the sides, of each tall windmill, taking maintenance readings — which can then be directly integrated into your maintenance system, which you can connect to via your Aeryon tablet.

Or, if you’re fighting a forest fire, you can see how you’re doing by the hour as you track the fire with your Aeryon UAV in real time. Or, if you’re a police department tracking someone in hot pursuit, the UAV can plot the suspect’s location exactly onto a street map, displaying it in real time on your tablet and, therefore, networked and distributed to all other officers involved in the search — who are fed the images and map locations on their phones and in-squad car laptops. Absolutely brilliant.

With commercial UAV use really coming into its own, it is no wonder that Aeryon’s growth and other performance metrics are bursting with good news. It’s a private company, so sales figures aren’t publically available, but the company’s executives have indicated that they have doubled revenue in each of their past five years. They’ve also had to increase the size of their premises – twice – so now they occupy 40,000 square feet in Waterloo. And they are up to 70 staff — and growing.

When it’s clear we have to diversify our economy beyond natural resources – the current weak oil price and depressed Canadian currency teach us that – companies like Aeryon are the way of the future.

> Commercial UAV
To get an idea of what commercial UAVs are currently capable of, have a look at the videos on the Aeryon website. These are the sorts of applications that are driving a huge growth in commercial UAV sales. One industry analyst predicts it will be a $5-billion market in a few years.

Current commercial UAV applications are already quite compelling. Canadian companies are using them for precision mapping, pinpoint agriculture, land surveying, pipeline monitoring, flare stack inspections, environmental assessments, and a host of related uses.

To get an idea of what’s going on in this space in Canada, also have a look at the website for Skymatics, a Calgary-based company that does UAV work in the agriculture, oil and gas and mining sectors. Click on the Edmonton Sun story profiling Skymatics that mentions how difficult it was for them to get a permit to do an aerial shoot in downtown Edmonton. (More on that next month.)

Hollywood is also discovering UAVs big time. Dynamic and sustained aerial shots are now within the budgets of so many more productions — not just the big-ticket ones that can afford expensive helicopters. Corporate and government video marketing pieces are now being peppered with engaging aerial footage. The user experience is very compelling.

Canada has a number of pioneers in this aerial videography business segment. Take a minute to browse through the videos on the website of Kaspi Films of Oshawa, Ontario, especially the video called “Spring 2013 Aerial Demo Reel”; then look at “The Shot: UAV Aerial Videographing.” This second video gives you a behind-the-scenes look at how they did a bunch of the shots for the first video. These two videos together bring home vividly the potential for this new business of aerial videography.

Also have a look (it will take your breath away) at what Skycapture, out of Vancouver, is doing. On their Facebook page, click on the video entitled “Epic Aerial View – Garibaldi Mountain Range,” a project they did for National Geographic — although they should also be getting paid by the British Columbia Ministry of Tourism!

Search and rescue operations are also using UAVs in novel, and potentially life-saving ways. A ski patroller can use a UAV to scour the surface of an avalanche to find traces of where any individuals might be; same for rescuers in earthquake or tsunami sites. The average human rescuer all of a sudden is given a new, powerful set of eyes, and a much more effective vantage point.

Military and law enforcement applications abound as well. Guarding a compound, or a border, just got a lot easier and more effective. About half of Aeryon’s sales are from military and police customers.

These are all fairly predictable applications for the UAV technology. Don’t get me wrong — I am not saying they are not impressive applications, because they certainly are. They just are not jaw-dropping, “aha moment” ones. But then along comes the killer app, and it changes everything.

> Amazon’s Killer App
It’s 3 p.m. on a Thursday, and your architecture firm is pitching a new building design to a client at 5 pm. You’re finishing the last touches on the computer, and then you’ll need to print out the presentation in colour, run to the client’s offices, dazzle them, and then become a hero.

Instead, as you try to print, your computer notifies you that it’s out of colour ink. OMG. You don’t have time to run out and buy another cartridge — suddenly, the risk of your status dropping from hero to goat rises dangerously.

But not to worry. You order a colour ink cartridge from Amazon off their website, and 15 minutes later, it is delivered to the roof of your eight-storey building in downtown Toronto by an Amazon Prime Air UAV. Science fiction, you say? Well, take a look at the Amazon Prime Air delivery video on YouTube. We’re talking about the very soon here and now. Frankly, the only thing keeping the service from launching is a regulatory regime that doesn’t quite know what to do about UAVs that are ready to be flown outside of the line of sight of a human operator. (More on this central issue next month, when I discuss the legal and regulatory aspect of UAVs.)

> A Revolution in Urban Logistics
I live in Toronto. I take public transit to work because the roads of Toronto are congested to the point where driving on them is a very sub-optimal experience. Everyone in the city recognizes this. The Toronto Board of Trade calculates that the gridlock on our roads costs Toronto businesses about $6 billion a year.

Untold thousands of physical deliveries are made each day on the roads of Toronto by trucks and vans of all types and sizes. Some percentage of these deliveries could be made by UAVs, à la the business model being pioneered by Amazon. Impossible, you say? I give it less than two years. And if it takes longer, it will not be because of the technology — but rather because of a regulatory system at a loss with how to regulate the new technology.

In addition to the regulatory issue of where and how to fly UAVs in urban settings, UAVs raise a host of other issues. Privacy, for example (I live in a glass walled condo; can a UAV hover just off any balcony and take video footage of my building?). More on this next month when we consider the legal issues related to UAVs.


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

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George S. Takach