Tech & Sourcing @ Morgan Lewis


In Part 1 of this two-part series, we discussed some of the Federal Aviation Administration (FAA) requirements for commercial use of unmanned aerial vehicles (also known as UAVs or drones). In this Part 2, we discuss some of the other considerations that commercial drone operators must consider, including privacy laws, local regulation, and certain business considerations.

Drones and Privacy Laws

At present, there are no federal laws specifically regulating drone use and privacy. The FAA was tasked with drafting a comprehensive rule for drone use. Some have interpreted the FAA’s mandate to include a requirement to implement privacy protections. The FAA, however, has taken the position that it is a safety regulator and privacy issues are outside its authority. In the meantime, the National Telecommunications and Information Administration (NTIA) worked with various stakeholders in 2016 to publish its Voluntary Best Practices of UAS Privacy, Transparency and Accountability. These best practices are specific to drone use and are not a legal standard. Nonetheless, drone operators should be aware of potential liabilities for violating any policies they adopt that go beyond the minimum legal standards.

A number of states have also enacted laws on the use of drones and privacy. In general, these laws prohibit the use of drones to spy on individuals on private property, but the scope of the various state laws may vary. Some states include a reasonable person standard, while others only cover buildings and yet others also cover outdoor areas. In California, for example, drone users need permission to enter the land or the airspace above the land to capture any type of visual image, sound recording, or other physical impression of those engaging in private, personal, or family activity—if the invasion occurs in a manner offensive to a reasonable person. In Virginia, it is a Class 1 misdemeanor to use drones to trespass on another person’s property to secretly or furtively peep, spy, or attempt to peep or spy into a dwelling or occupied building located on the property. Florida forbids the use of drones for surveillance that violates another person’s reasonable expectation of privacy. ] In addition to drone specific laws, such as those described above, drone operators should be aware that normal privacy laws may apply to the capture of images and audio by drones, including laws that regulate the use of personally identifiable information.

State and Local Regulation of Drones

The role of state and local governments in regulating drones has been debated but no consensus has been reached yet. Some states have enacted legislation that preempts localities from enacting their own drone laws. According to the National Conference of State Legislatures, 41 states have so far enacted laws addressing drones. Any business that intends to use drones will need to be aware of the various state and local regulations that may apply, which may differ depending on the state, county, or municipality in which the drones will be operating.

Business Considerations

Given the plethora of legal requirements and the shifting legal landscape, businesses that plan to use drones should consider a number of questions, including the following:

  • What are the risks in using drones for business operations?
  • Should the company adopt a specific drone use policy?
  • Does the company’s existing insurance cover drone use or will special insurance need to be purchased? Are the insurance limits adequate for the proposed drone use?
  • Should the company hire an outside contractor to operate drones for the company?

Even businesses not planning to use drones should be aware of the potential uses of drones and how drones might impact business operations. For example, new software allows 3D models of buildings, equipment, or whole facilities to be created using algorithms that extract a wireframe model from a large collection of overlapping photos taken by a drone. This technology could be a concern to any business in which the building or related equipment are an important part of the business’s trade secrets.