Analysis and insight for the industry – lawyers, regulators, manufacturers and users

Volume 1, No. 4 January/February 2016

DRIVERLESS CARS EMPLOYMENT DRONE USERS PATENTS ‘We anticipate a shift ‘All kinds of alternatives ‘Companies are very nervous ‘South Korea, Japan, from risk based on the to a classical full about sending manned USA and Germany again characteristics of the driver time employment aircraft there because there were the biggest sales …to risk based on the relationship will could be a real problem if markets besides China characteristics of the vehicle’ increase’ there is an accident’ in 2014’ Page 2 Page 5 Page 9 Page 12

are holding off until the FAA Robotics poised for new era as US implements its own regulations. When the FAA does act it could make a positive impact on this prepares to publish drone rules new industry which is gaining a strong foothold on the world The robotics sector moves platform and which is also into a new era in 2016 when gaining respect and notoriety.’ the US’s Federal Aviation The opening of the US Administration (FAA) issues market will be a beacon for its rules for the flying of manufacturers around the world. drones. Hogan Lovells research shows that 70% of drones registered under the s333 exemption with The move will mean that the the FAA are made by a Chinese world’s largest market is properly manufacturer. Founded in 2006, open for business. But it will also DJI is the world’s biggest producer mean far more. The US rules and is based in China’s Silicon will have huge effects on other Valley of Shenzhen. markets around the world. Other Scotland-based Cyberhawk, countries which lack the resources that competitive advantage. or summer. ‘As soon as we have a world leader in industrial necessary to do all the checks The FAA rules will also have a certainty, we’ll see a huge amount inspection and surveying, does that lie behind researching a rule wider reach than the UAV sector. of movement in the sector, not yet operate in the US but will book will have a reliable template The frameworks set for drones including venture funding,’ she find it much easier to do so when to hand. And manufacturers and and driverless cars are expected to says. the rules are in place. Founder specialist operators based outside be the mould for the whole area of Llewellyn Boyer-Cartwright, Malcolm Connolly says: ‘In the the US will now find it easier robotics law. partner in Bahamas law US, the vision of the Federal to sell into North America. The Lisa Ellman, co-head of the firm Callenders and a former Aviation Administration is very other side of the coin is that some Hogan Lovells global UAS group commercial airline pilot, says: ‘The much to make the regulation countries which have benefited expects a significant increase in FAA is a massive organisation very permissive. It will be a polar from the lack of US rules - such as activity after the final rules are and is world-renowned. It could change. It will likely become even Canada and Mexico - will now lose published - probably in spring be that some other jurisdictions more permissive than the UK.’ Commercial sector puts rule makers under pressure Christmas sales of drones, the launch of service, unveiled the latest model of its drone new, liberal drone rules in September which Amazon Prime Air delivery and experiments on Black Friday weekend in November, using allow ‘Beyond Visual Line of Sight’ flying in in Finland are among the commercial pressures the famous British motoring journalist Jeremy segregated airspace. Samuli Vuokila, chief that will force regulators to pave the way for Clarkson to attract maximum attention. adviser on flight operations at the Finnish further innovation on drones and other robots. Amazon said: ‘We are working with regulators Transport Safety Agency, says the sensors In the US, the Consumer Technology and policymakers in many countries in order to technology ‘is evolving in a very rapid Association has estimated that 400,000 drones make Prime Air a reality for our customers as pace’. He adds: ‘This is likely to lead to more could be sold over Christmas - but other soon as possible.’ applications which can be utilized, in a way estimates put likely December sales as being The Finnish Post Office, Posti, has been “sky is the limit” as we see it.’ far higher. Either way, it would be no surprise testing parcel delivery over a 4 kilometre In the US, an FAA-approved pilot delivery of if 1 million were sold in the next few months. stretch between Helsinki and the island of medicines was made to a health clinic in Wise Amazon Prime Air, the drone-based delivery Suomenlinna. The country came out with County in the Virginia countryside in July.

Contents Driverless cars 2, US 4, German employment 5, Canada privacy 6, Finnish regulation 7, Africa & robotics 8, Aerial surveyors 9, Criminal liability & H&S 10, Europe and patents 12, Regulation 14, Internet of Things 15 www.roboticslawjournal.com 1 Driverless cars: design of the rules NEARLY 20M CARS WERE MADE IN THE WORLD’S LARGEST AUTO MARKET, CHINA, IN 2014, ACCORDING TO OICA, THE INTERNATIONAL MANUFACTURERS ORGANISATION What is likely is that the combination of the technology and shared The way ahead ownership or car on demand services will bring accessibility to autonomous vehicles to a much greater percentage not rethink rules over taxis and public Caroline Coates of the population including disabled transport could find themselves mired in heads the users and the elderly – not least due to litigation (as Uber is, arguably, already automotive affordability compared with current showing us)? adapted vehicles. sector group for The Pathway to Driverless Cars and UK-based law Code of Practice published in 2015 by What do you see as the wider firm DWF. She is the UK DofT [Department of Transport] effects of this increasing level of also executive has set out the UK government’s stall to Caroline Coates automation, which will be felt across review legislation by 2017 concerning partner of the different parts of society and create the use of driverless cars on the road firm’s Birmingham office. commercial opportunities for many (and to review liability). Further, by different industries? 2018 to start to look at international The use of vehicles on the road is How do you think that the complicated standards. There is much debate embedded as part of almost every liability issue on driverless cars will about what regulation is necessary and business from manufacturing, logistics, develop, be discussed and eventually be whether existing regulation of cars on and retail to professional services that resolved? the road is adequate. provide advice. The impact on society At DWF, these are questions that we We have a history in the UK of is an interesting debate – will people have been discussing and debating specifying in our legislation what is not adopt this technology or will there be with clients for over 18 months, allowed – rather than stating positively resistance? particularly regarding the impact on what citizens are entitled to do. It is Picking up on the themes outlined motor manufacturers and the insurance likely that regulation on the increasing above, the way in which we use our industry. We anticipate a shift from use of technology will follow this cities is likely to change – a reduction risk based on the characteristics pattern, i.e. gradual introduction of new in congestion and parked vehicles of the driver (such as age, driving legislation or amendments of existing will open up swathes of city road record, and location) to risk based regulation to cope with the challenges space to use in other ways, whether on the characteristics of the vehicle. presented. that is leisure, retail or simply open Essentially this is a shift away from The interaction between private and public spaces. For many businesses, personal liability of the driver (to which public transport in urban environments particularly retailers, the impact on a motor policy responds) towards in the future is particularly interesting their supply and distribution chain from issues of product liability. The issue and certainly, together with motorways, automated warehousing to autonomous of changing models of ownership of is where we are likely to see autonomous haulage to interaction with customers cars will have an impact – increased vehicles being adopted first. Mass people will be significant. subscription or shared ownership transit is likely to remain as the way of On a different note, the data that is services, point-of-use schemes such that bringing people into a city – and then collected by the autonomous vehicle the insurance is likely to be bundled dispersed to their end destination by 1 presents commercial opportunities as with the car. or 2 people vehicles. Whether that is more and more is known about the In terms of liability in the event of a by hire vehicle, “autovot” or “taxibot” driver/user and their lifestyle and habits. collision, for the moment, the question remains to be seen and, of course, Personalised advertising of retail, still remains: what did the driver of each city will have different constraints refreshment opportunities will increase. the vehicle do or fail to do – such as and demand. Overarching regulation Further, with all that time freed up for turning without indicating? In the by national government (in the UK at the occupants of the vehicle during the longer term, where all vehicles are least) is likely to set the framework journey, we should see productivity driverless, the likelihood of accidents for how these systems coincide with increase (although they could spend it will be much reduced and the failings local practice developing within that shopping online). of a particular vehicle or its operating framework. systems may be an issue for the two Clearly the opportunities that this What kind of issues do you expect to be vehicles’ motor manufacturers. It is presents must be on cities’ radar – such advising the manufacturing sector on in in the medium term that particular as freeing up parking spaces, reducing this area? challenges are likely to arise where congestion. However, the challenges In terms of the car manufacturers, there are multiple types of vehicles are very real: a reduction in income as mentioned at the beginning, there with different levels of advanced from parking, local policy on the are likely to be issues of product driving assistance systems (ADAS) all infrastructure required to support these liability. Added to that the contractual sharing the same road space. Liability developments and cyber security. may be more difficult to determine at relationship between the manufacturer and the software supplier – who that stage although the data recorded What is the likelihood of human rights designs and/or is responsible for which should assist in apportioning fault. actions being taken if people feel they are parts of the vehicle? These are issues that both the UK being deprived of using driverless cars – As you would expect, there is a need government and the insurance industry for example, a disabled person who would to protect innovation through patents – as well as the manufacturers – are not be able to use a traditional car? and subsequently challenging threats to aware of and starting to discuss now. At present, human rights legislation intellectual property. does not provide that all people are Risk management of the supply Do transport policymakers and regulators equally entitled to use of a vehicle and chain will be at the forefront building need to review current rules? Do you it is hard to see that principle altering on recent problems and the degree to agree with the OECD that cities which do with the advent of the driverless car.

2 www.roboticslawjournal.com Timeline

which manufacturers are reliant on a Global timeline: what to expect on drone regulation supply chain stretched globally, where December, 2015 Global not all countries are adopting the same Geo-fencing starts on products from market-leading manufacturer DJI - easing the way for level of autonomous vehicles. enforcement of restrictions on flying near airports, prisons and other areas. We will be guiding clients through December 21, 2015 Ireland changes to international standards and Irish Aviation Authority requires that ‘all drones over 1kg must be registered’ with them by this ensuring compliance with regulation. date This is particularly relevant to issues December, 2015 US surrounding cyber security. Department of Transportation hopes to launch its drone register for UAV-users, to meet rising Lastly, where adoption of new public concern about near misses technologies is supported by Early 2016 US government/ EU funding, we will FAA regs expected - drone flying to be permitted be advising on issues arising out of By early 2016 Bahamas provision of state aid. Drone regs expected to take effect - being brought forward by Bahamas Civil Aviation 2016 What kind of issues would you expect to Amazon Prime Air delivery service in ‘30 minutes or less using small unmanned aerial vehicles’ be advising government and regulators due to start - so putting focus on practical application of drone regs on deliveries. on in this area? 2016 Australia At this stage our role is advising Lighter regs for commercial drones under 2kg - from Civil Aviation Safety Authority clients other than national government 2016 Europe and regulators. That said we believe that our expertise, particularly on the RPAS framework - to implement March 2015 Riga accord liability issues, can assist. 2018 Global ICAO standards - international standards for use to develop national guidelines Will driverless cars increase the role of 2016-20 US regulators (or not)? If so, should we be FAA - airborne sense & avoid systems - initial certification concerned that regulators do not have a Global timeline: What has happened so far on drone regulation good record on keeping up with 2015 technology? Where the UK government The interaction November US has set out its stall that the UK Chicago City Council passed drone regs which are a ‘draconian ordinance all but banning drones should be an environment where between in most cases’, according to Professor Greg McNeal of Pepperdine University Law School this technology is encouraged private and November US to develop, it is to be hoped that public transport 2,500th exemption licence (s333) given for drone flying the regulatory aspects do not November US stand in the way. The Pathway in urban Registration by pilot (rather than individual drone) recommended by task force advising the to Driverless Cars and the environments Federal Aviation Administration creation of C-CAV (the Centre in the future October Ireland for Connected and Autonomous Irish Aviation Authority published first draft of proposed Small Unmanned Aircraft (Drones) Vehicles) suggest a real is particularly and Rocket Order commitment to making this work. interesting October EU On development of regulation and certainly, MEPs voted to revise and develop rules for the safe use of drones to “cope” with this technology, October Finland what we would not want to see is together with Finnish Transport Agency introduced what it is says is ‘one of the most liberal aviation creation of burdensome regulation, motorways, is regulations in the world’ for UAVs at an early stage, that would stifle where we are September Taiwan innovation and may prove not to be Cabinet began process to regulate use of civilian UAVs fit for purpose. Let the technology likely to see September Japan mature before we try and regulate autonomous Amendments to Civil Aeronautics Act regarding drones: Regs include bans on UAV use over for every eventuality. vehicles being residential areas adopted first. September Indonesia Anything else you would like to Regulation 90/2015 from the Transportation Ministry took official effect: Indonesian Press say? Council says that the rules could restrict use of drones in journalism One of the aspects of truly September EU driverless cars is that the route they End of European Aviation Safety Agency consultation on drones - Key part of moves towards select and the movement of the car on EU regulatory framework the road is rules based. What those August US rules are and how they are applied National Telecommunication and Information Administration started work on drone privacy in different scenarios is an area of voluntary standards concern. Is it right that the software August New Zealand developer decides whether, in the event Updated drone rules - risk-based of a potential collision, to direct the car July South Africa to crash into a wall thus injuring the CAA regs take effect: drone flying became legal driver/user or to direct it to run into the June EU queue of pedestrians injuring multiple Privacy rule recommendations from Article 29 Working Party people? This looks like a question for June Singapore an elected government to debate – and Drone rules took effect - permit system coming into effect for commercial drones and others not a commercial software company. other 7kg www.roboticslawjournal.com 3 US: Rule introduction CHINESE MANUFACTURER DJI ACCOUNTS FOR 70% OF THE US APPROVED MARKET SHARE US markets set for surge Lisa Ellman is the co-chair of the Hogan Lovells Global Unmanned Aircraft Systems [UAS] group and is based in Washington DC. She Lisa Ellman discusses with Neasa MacErlean the effect that the publication of drone rules by the Federal Aviation Administration [FAA] will have on the US and global markets in 2016. She has three drones herself and is a hobbyist flyer.

them soon. This was through the Pathfinder So Amazon will be able to deliver its packages What will happen after the rules come out? Program the FAA established [a partnership one day? As soon as we have certainty, we’ll see a huge with manufacturer PrecisionHawk and BNSF We will get there. amount of movement in the sector, including Railroad] to do research and development on venture funding. It has been estimated that what technology is required for safe BVLOS Will Amazon be able to deliver packages in cities in the first ten years the sector will have an flight. While the first iteration of the rules as well? $82b economic impact. There has been a high won’t have what everyone wants, I do think I think so, yes. One of the keys here is the demand across the U.S. from businesses to companies will be able to get exemptions from design of ‘highways in the sky.’ NASA is fly, as evidenced by the more than 2,000 FAA the rules that will allow BVLOS operations working on that, with key industry partners. Section 333 Petitions for Exemption that have if they can explain to the FAA how they will been approved by the FAA – not to mention that be able to ensure an equivalent level of safety. So what will happen that will enable the payload a lot of people are flying illegally. We’ll also see Broadly authorized BVLOS flight will come issue to develop? drones being used in more areas – everything over time once the FAA is confident that the There are some really interesting companies from real estate to disaster response to pipeline technologies are there to keep people safe, so doing really interesting things here already inspection and construction we need innovators to educate – Matternet, for instance. The FAA’s primary sites. policymakers here. focus is safety, and right now, they are As soon as we have At the moment the FAA is focused on broad authorization of lower-risk What does the industry want to certainty, we’ll see regulating as if a drone will commercial UAS activities. I expect there will see in the rules? fall out of the sky, or fly away, be another round of rulemaking from the FAA Companies are hoping to see at a huge amount of at any time. The challenge where they tackle the payload issue. least three things in particular movement in the for the industry is to develop – movement on ‘Beyond Visual sector, including technology that alleviates these The US has been slower than some other Line of Sight’ [BVLOS], on concerns. countries in getting rules out. Has that flying over congested areas and venture funding disadvantaged the US sector compared to its in evening hours. How long will it be before BVLOS counterparts elsewhere? The FAA has also asked for comes in? Absolutely…. One problem for policymakers input on “micro-drones” weighing less than When the FAA launched the Pathfinder has been a lack of data. In many other 4.4 pounds. It seems reasonable to regulate Project [in May 2015], the federal government countries they decided to put together rules drones differently based on weight, as there said it hoped to see operations happening even if they were lacking that data. The US is are different risks involved with flying a 2 within three years. We’ve seen great learning from other countries. The 4.4 pound pound drone than a 55 pound drone in the progress here so it could be sooner than approach comes from Canada, for example. national airspace. Here, the key question for that, particularly in rural areas. In cities The US is also learning from the risk-based policymakers is weight versus frangibility. and over people, it’s more framework put in place in the Does a 4 pound drone represent the same difficult. Again, the key here UK. The countries can all learn risk to aircraft as a 50 pound drone -- or is it is technology: A transponder I expect there will from each other. system, for example, more analogous to the risk a bird poses to an be another round of aircraft? If a micro-drone has a lithium ion would allow the systems to Will other countries learn from battery, does that make it as dangerous as a communicate with air traffic rulemaking from the the US when it brings its rules 50 pound drone? These are the questions that control. FAA where they tackle out? policymakers are asking now. the payload issue The complexity of US How do you see the issues airspace is unmatched in the What do you expect to see on BVLOS? around carrying payloads world. The FAA has a very I think that the first version of the rules will developing? strong safety record. As soon only allow Visual Line of Sight operations, We’ll see this starting in rural areas where as there is a fixed set of rules, other folks will but we will see progress here shortly. In there is little danger to people. We’ve already look at them. Over the last year, the FAA has October in the US, an approved BVLOS seen a medicine delivery to a health care clinic also been very open to proposed solutions flight took place and I hope we’ll see more of in rural Virginia. from the industry and I think other countries

4 www.roboticslawjournal.com Employment: Germany

will learn something from the FAA is doing here. Classic jobs at risk If other countries have benefited while the US was without its rules, will those other countries lose out as the US catches up? It will bring companies back to the US if they have left, and I see this industry expanding quickly in the US so other countries will want to keep up.

To what extent will technology provide the answers to some of the legal questions we now have? To a big extent. The challenge for innovators is to work with policymakers. For every problem we have a solution. Cars have brakes. Our computers have security systems. As we are now seeing the potential policy implications for drones, we have a lot of Annabel Lehnen is an employment partner at Osborne Clarke. innovators who are developing solutions. I call Based in Cologne, she has particular expertise in the transport what we are seeing “polivation”: policy-makers and automotive sectors and in digital business. promote innovation and innovators work hand in hand with policymakers. A lot of what I do is translating between Silicon Valley and DC. Silicon Valley is focused on innovation and growth, and they don’t want Annabel Lehnen to see the government throwing up unnecessary roadblocks that will stifle innovation. To what extent are automation and robotics Do you expect to see more flexible working as developing in Germany? a result of these trends (eg more people who How do you see the sector developing around the It is continuously developing; however, are self-employed or who work part-time or on world? according to one survey currently only contracts)? Countries are moving at their own pace. The approximately 20 to 30 per cent of German All kinds of alternatives to a classical full time UK is a great example of a country which has companies have or are turning employment relationship will seen the potential and is running with it. And to new production processes or increase, such as part time and in Japan, some 85 per cent of crop dusting is are intending to introduce more limited employment models, on already done with drones. robotics. Terms of employment call duties but also freelancer will change contracts, supply of temporary DJI is a Chinese manufacturer. How do you think Do you think that these trends significantly workers or employee leasing it is getting on? will reduce the number of jobs models. It is the world’s biggest manufacturer. We available - or will they change will start to see more competition as more the kind of jobs offered? How might training be affected? For instance, companies come into manufacturing and into We expect that classical jobs in the blue collar will that training be given at the start of people’s the operating side. DJI has done a magnificent business will be replaced by robotics. The careers (at university, perhaps) or will there be job in covering the drone market on the front number of jobs will certainly be reduced. more training during people’s working lives? end. In the US, they represent 70 per cent of the However, if employers invest in their on- New kinds of training or university studies approved market share [through the Section 333 the-job-training, they might be able to grow will be offered in order to prepare students exemption approvals through which companies with new challenges and to continue to work better for the changing job models. At the gain approval to fly]. In the US, if your vehicle alongside or with the robotics. same time, companies will have to implement has been approved by the FAA, then it makes new training for existing staff in order to sense to keep using the same approved vehicles. Are these trends affecting the terms of enable them to prepare themselves for the DJI has also been a leader on incorporating new employment for affected workers or do you requested new job challenges. technologies into its hardware. For example, think they will do so in future? (For instance, will following the incident of a drone landing on there be more of an emphasis on training and If robots can increasingly do more of the hard the White House lawn, the company installed versatility?) physical work, does this mean that older workers geo-fencing on all its drones which prevents Terms of employment will change will be able to continue working even if they are them from flying in Washington DC and in all significantly, e.g. job descriptions, working not physically strong? restricted areas. time models, job safety. This will also impact If older employees will be able to be retrained, existing collective agreements with the they may have similar chances as younger How do you interpret the move in October of responsible works councils. employees to continue working. the US Department of Transportation to require Working conditions will have Apart from that, they are registration of drones in a national registry? to be newly agreed by way of All kinds of alternatives protected by the existing Anti It is a natural reaction to the greater use of modification agreements. If to a classical full Discrimination and Dismissal drones by a lot of new hobbyists who don’t employees or works councils time employment Laws as well as by the legal know about the existing rules. The key is reject, redundancy measures practice of the Federal labour implementation of the requirement – it needs towards the employees relationship will Court regarding the protection to be done in a way that is streamlined and not in question might be the increase of older employees against burdensome to the consumer. consequences. performance related dismissals. www.roboticslawjournal.com 5 Privacy: Canada SOME 700 PRIVACY PROFESSIONALS ATTENDED OCTOBER’S INTERNATIONAL PRIVACY CONFERENCE IN AMSTERDAM

raised related to privacy issues related to drones. As new security programs are Data knows no borders planned and systems initiated, we called on the Government of Canada to “restrict the use of How does the Privacy Commissioner of Canada see the area of drones – and other satellites, unmanned aerial or other vehicles, related high-tech issues? The Commissioner’s role is to act as an advocate of privacy remote sensors and associated surveillance rights and its scope does not include the making of regulation. The office of Daniel technologies within Canadian borders Therrien discussed the issues with Robotics Law Journal. and airspace under a proper regulatory framework.” (You can find the full resolution here: https:// Are you starting to receive enquiries about www.priv.gc.ca/media/nr-c/2012/res_120402_e. drones and privacy? asp.) We do receive questions from time to time about drones. To what extent are you liaising with other Our Information Centre, which responds to privacy bodies, abroad and at home? requests for information from the public and Data knows no borders, and our Office organizations regarding privacy issues, has recognizes that we, too, must reach out received 22 enquiries from the public about beyond ours to work with global partners drones over the last couple of years. Some and organizations to develop a global privacy use drones and were seeking privacy advice framework. This is an established priority for on best practices, while others had questions our Office, and, as such, our Office participates about privacy and the commercial use of in a number of key international privacy drones. Some wanted general information protection initiatives. for research purposes, whereas others were ur Office contributed to a Berlin Group’s concerned about drones flying near their Working Paper on Privacy and Aerial properties. Surveillance, which draws from our own 2013 We have also seen a growing media interest research paper. in privacy issues and drones. The nature of As a result of amendments to the Personal the enquiries we receive from reporters varies. Information Protection and Electronic Sometimes the questions are in relation to Documents Act (PIPEDA), Canada’s federal a particular incident or whether we’ve ever private sector privacy law, which came investigated any complaints about drones. understand where drones came from, what into force in 2011, our Office has the clear We also receive more general questions about they are used for and, in particular, what new authority to cooperate with our foreign privacy and the use of drones. challenges they raise for privacy, civil liberties counterparts on issues that affect individuals and human rights. in other jurisdictions. In fact, we have signed How is the issue of special rules for drones being We have allocated more than $4 million written arrangements with the Dutch, Irish, developed? to some 100 independent privacy research British, Romanian, Uruguayan and German In terms of the regulation of UAVs, there are initiatives through our (federal) data protection two different licensing streams in Canada: Contribution Program since authorities. Transport Canada is the civil regulatory it was created in 2004 to We have… seen a We are also part of the Global authority and the Department of National support independent, non- growing media interest Privacy Enforcement Network, Defence is the military authority. profit research on privacy, in privacy issues and an informal network of privacy Transport Canada launched consultations to further privacy policy enforcement authorities that is in May on proposed amendments to the development and to promote drones intended to promote enforcement regulations governing the safe use of the protection of personal cooperation by sharing unmanned air vehicles. Our Office has information in Canada. Any information about privacy provided comments to Transport Canada as opinions expressed in the project summaries enforcement issues and facilitating effective part of this consultation process. and reports are those of the authors and do not cross-border privacy enforcement in specific With respect to drones and privacy, we necessarily reflect those of the OPC. matters. published a research paper in 2013 called (You can find details here: https://www.priv. Furthermore, we are part of the Asia-Pacific Drones in Canada: Will the proliferation of gc.ca/resource/cp/2013-2014/p_201314_10_e. Economic Cooperation (APEC) Cross-border domestic drone use in Canada raise new asp. The Queen’s report itself is here: http:// Privacy Enforcement Arrangement (CPEA), concerns for privacy? www.sscqueens.org/sites/ the Asia Pacific Privacy Authorities (APPA) We continue to keep an active default/files/Surveillance_ and others. watch on this issue. In June of Data knows no Drones_Report.pdf.) The subject of drones is sometimes 2014, we released our privacy What is happening on the discussed at these forums and our Office priorities for the next five years borders, and our Office development of rules on an certainly takes part in those discussions. and surveillance is one of them. recognizes that we, international basis? We have also met with other federal Drones will certainly continue too, must reach out Our Office is not a regulation government departments, such as Transport to be of interest to our Office. making body. However, given Canada, to discuss the privacy implications beyond ours your interest in the cross-border of drones. Furthermore, we have been briefed Are you researching the area use of drones, you may be by the Royal Canadian Mounted Police and still? interested in a Resolution of Canada’s Privacy canvassed other security agencies about Under our Contributions Program, we recently Commissioners and Privacy Enforcement UAV use and the obligations of departments funded a study on the privacy implications of Officials on the Canada-US Perimeter Security and agencies to produce Privacy Impact UAVs in Canada. The study by the Queen’s and Economic Competitiveness Action Plan Assessments to identify the potential privacy University, Surveillance Studies Centre was released in 2012. One of the issues that we risks of any new or redesigned federal published in 2014. The project set out to and our provincial and territorial counterparts government program or service.

6 www.roboticslawjournal.com Privacy: Finland

Are you liaising with manufacturers? We spoke at the Unmanned Systems Canada 2015 annual industry conference in Halifax in A liberal regime November. We spoke at a similar conference attended by manufacturers in Ottawa in 2011. Finland introduced a new set of regulations for UAVs in September, describing the Is there anything you would like to say about new rulebook as ‘one of the most liberal aviation regulations in the world’. Samuli driverless cars (which will record a lot of Vuokila, chief adviser on flight operations at the Finnish Transport Safety Agency information)? answers some questions about the rules. The Office of the Privacy Commissioner of Canada is not currently engaged in any work directly related to driverless cars. We are, however, actively following the issue of vehicular telematics, specifically the data collection made possible by the growing deployment of automotive sensors designed to gather data about driving habits, location, speed and other elements. Potential privacy concerns include the transparency of this collection and the use of telematics data to establish insurance premiums and/or profiling activities. We have engaged in some discussions with industry stakeholders, insurance providers and many of our provincial counterparts. Our Office is currently looking at the privacy issues that can arise from increasingly smart devices, or the Internet of Things, and we expect to start publishing a series of research papers soon. The research papers will look at the privacy Samuli Vuokila implications of the Internet of Things and Canada’s regulatory environment, among other What is the demand for drones in Finland? In other devices that can be attached to an things. what ways are UAVs being used? remotely piloted aircraft is evolving in a very Returning for a moment to the subject of Increasing, presently most common use rapid pace. This is likely to lead to more automobiles, you may also be interested in appears to be photography, both still photos applications which can be utilized, in a way a project funded by our Office called “The and videos for multiple use including real “sky is the limit” as we see it. Connected Car: Who’s in the Driver’s Seat”. estate, media, zoning, film industry, building This research project was conducted by the inspections etc. There is a growing industry What kind of experimentation are you expecting British Columbia Freedom of Information and in power line inspections and other beyond to happen? Privacy Association. visual line of sight operations. We believe the real business is in the beyond (For more information, visit: https:// visual line of sight www.priv.gc.ca/resource/cp/2014-2015/ Will there be many users of small UAVs? operations. This p_201415_06_e.asp.) This is a very likely scenario. We are is, however, a big We believe the Under the same program, we are also receiving presently declarations from challenge in near real business is funding another project on vehicular operators conducting commercial activities term but solutions infotainment platforms. (See the third project with increasing numbers. are being developed in the beyond from the top at this link, for a description: by the industry visual line of https://www.priv.gc.ca/resource/cp/2015-2016/ How are you dealing with issues on ‘Beyond in Finland and sight operation cp_bg_e.asp.) Visual Line of Sight’ flying? elsewhere to address At the moment these operations can be this. Is there anything else you would like to add? performed in segregated airspace. This is You might be interested in the results of a rather simple to arrange in Finland due to our Will you be working with other regulators – survey question regarding drones in a 2013 poll flexible airspace policy and efficient airspace especially in the Nordic area – to harmonise rules we commissioned. The survey results suggest management procedures. and to help each other? that most Canadians are very comfortable with We are in continuous contact with the other the use of Unmanned Aerial Vehicles to help How did you go about designing your rules? Did regulators and harmonization is seen as an with search and rescue missions (81%), to patrol you borrow ideas from abroad? Did you work important element to facilitate cross border the border (66%), and for law enforcement closely with the industry? operations. At the same time we highlight the investigations (54%). However, they appear to We did work very closely with the importance of local circumstances. Operating be less comfortable with the use of UAVs for industry and other stakeholders such as the environments are different and can provide more general monitoring of the public, such air navigation service provider and model varying operations depending on the location. as at events or protests (42%), or for general aircraft association. We did not borrow ideas surveillance of public spaces (35%). For uses too much as our approach is rather liberal What sort of enforcement issues are you seeing? related to public monitoring, one in five or more and highly both risk – and performance This is a new area and will involve a lot (19-24%) said they were not really comfortable based. of new actors to this aviation segment. with this at all. Authorities involved are also multiple The poll can be found here: http://www. How do you expect the issue of payloads to depending on the scope of their authority priv.gc.ca/information/por-rop/2013/ develop? – the aviation authority on aviation-related por_2013_01_e.asp. The technology on various sensors and issues, police on general law enforcement etc. www.roboticslawjournal.com 7 Africa: Robots ROBOTS DOING DIRTY WORK: ROBOTS ENTERED THE RUINED NUCLEAR ENERGY PLANT AT FUKUSHIMA BEFORE HUMANS Danger, robotics and Africa Dr Benjamin Rosman discusses the way robotics will develop in Africa and how some of the legal issues Benjamin Rosman impinge. He is a senior researcher in the Mobile Intelligent Autonomous Systems group at the Council for Scientific and Industrial Research, South Africa.

How is the robotics sector developing in South Africa and the rest of Africa? The embracing of technology seems to be slower in the developing world, particularly with hardware, than in the developed world. Hardware would typically require more infrastructure. There are also challenges about the uptake of robotics in the perceived subsequent loss of jobs. system. Importantly, no human is then about drones. The main question is: People talk of the ‘three Ds’ as directly responsible for the resulting when something goes wrong, where application areas in relation to use of performance of the system. does the responsibility lie? It is not robotics rather than humans - Dull, clear in general what the answer is. Dirty and Dangerous. Dull and Dirty Where will we be in five years? It is likely that the answer will be applications tend to be avoided in the I predict that we are going to start different between the application areas. developing world because we have seeing more and more of these This same question applies across the a substantial workforce here and developments happening on a small board to all aspects of robotics and employment is a major concern. So the scale. There will be more companies autonomous systems. primary roles for robotics in Africa are, offering drone services, for example, Concretely, with driverless cars, who’s typically, around Dangerous work, or and working in war- and disaster- responsible if something goes wrong? providing services that can’t otherwise ravaged areas. I would expect this to You can’t blame the driver because he be provided. happen incrementally - but I could also might be in a passenger seat reading. One of the major application areas imagine in the right circumstances If you place the responsibility on the in Africa is mining. The conditions something just exploding onto the developer of the technology, you are on mines tend to be very difficult for scene. discouraging development. If it was an humans, often with poor and dangerous The drive for automation in obvious fault in the system you could conditions. manufacturing is another key difference hold the manufacturer responsible, but There are many things that people between developing and developed if there is some unusual confluence of do better than robots - tasks that economies. A country such as the events and the car behaves in a slightly require dexterity, for example, USA has significant motivation unusual way, what do you do? This and certain kinds of reasoning. You can’t blame the to streamline manufacturing is particularly relevant question for Humans are more flexible driver because he processes for competitive reasons, learning systems. physically and intellectually. We might be in a passenger which inevitably leads to greater You can design a driverless car deal better with challenges that are automation. On the other hand, so that it drives safely, politely, unanticipated. Robots are good at seat reading developing economies can typically and conservatively but that is not repeatedly performing one well- rely on a larger, relatively cheap, necessarily how people drive. People defined activity all day and all night. workforce. display a lot of complicated signals, There is a misconception that Regarding autonomous cars, you will with these differing between places and robots and computers are systems in see that happening everywhere but I cultures - and other drivers understand which large numbers of rules have don’t think you will soon have large the unspoken protocols of the way you been constructed. These days tasks fleets of autonomous vehicles in Africa. drive. If driverless cars aren’t able to are rather solved using machine encapsulate these protocols, it would learning, which allows us to specify How are the legal issues developing? almost be as if they were foreigners examples of desired and undesired We are already seeing some of the legal unaware of local customs when on behaviour, and leaves determining the issues developing around driverless the road. So if something went wrong rules which best describe these to the cars. Similar questions are being asked in these circumstances, who do you

8 www.roboticslawjournal.com Africa: Robots Commerce: Aerial services

blame? You might have a car problem to be solved. Similarly, designed in the US which you take many researchers work on to other parts of the world. What problems such as automated View from the aerial happens when they misinterpret music composition or artwork the signals that are given by generation. This would affect other cars on the road? There is those areas too. surveyors much scope in the legal world for There is a tendency for people discourse on these issues. who go into computer science Scotland-headquartered Cyberhawk says it More discussion is needed to prefer the notion of open is the ‘world leader in industrial inspection about robots in factory and source, and to not care strongly domestic settings. A current about the ownership of these and land surveying using ROAVs’. Founder hot topic of research is now kinds of works. Many would Malcolm Connolly talks to Neasa MacErlean. into ‘compliant’ robots. If they say that what they produce hit you, these robots have some should be available to all. You ‘springiness’ to absorb some of would not want a predatory the impact, and they also realise company coming along and Malcolm Connolly that they have hit you and they somehow obtaining rights to What is the growth potential of your millions of pounds on each stop. These robots are designed these automatically generated market? individual inspection. An example to be safer around humans than products, and then charging For industrial inspection of this is when we do flare traditional non-compliant robots people to use them. That would work, it is huge. The vertical inspections at oil refineries. The [large pieces of machinery, be harmful to the entire industry, sectors in which we operate flare is a safety critical part of usually cordoned off from if not society more broadly. include renewables, oil & gas, the process plant, designed to humans in factories] but there are, How much of an issue is the rail infrastructure and power burn off all of the hydrocarbon inevitably, going to be issues. fear of job loss in the development transmission. Each of those inventory in a process plant For example, if a robot’s job of this area? markets is growing very, if there is a problem – this is is to put knives into a box what I don’t see it as a major very quickly. Wind, rail and called a blowdown. Traditionally, should you do to protect humans stumbling block at the moment transmission are the biggest ones the only time a flare could be in case a knife slips? Many - but it could be soon. Honestly, in terms of overall market size. Oil inspected is during a planned modern robots can now be trained it isn’t the case that we don’t & gas and utilities process shutdown. by workers in the factory, rather have robot butlers in our houses have been the However, this than being pre-programmed by because of the social issue. This main areas where The biggest frustration can cause an the developers. is still more Cyberhawk has is the difference in extension to the In these cases, a … in the future, these because of the focused its efforts regulation between shutdown period worker may drag technological in recent years. for the plant if a the robot’s arm problems will relate issues. However, We are an different countries. problem with the around the knives more to the legal, in the future, these inspection flare is discovered. and show it what financial and social problems will company, focused With our ROAVs, we can look actions to take to relate more to the on the provision of information. at the flare whilst the plant is pack the knives, issues legal, financial and We are engineers. We collect data still live, which allows the plant and how to do social issues. - and that could be done by using operator to plan any repair or so safely. But, if On the financial a drone or by having a man on the maintenance work that the flare something goes wrong, is it the side, costs of the equipment ground. We process that data. We requires prior to shutdown, rather designer’s fault…or is it the fault required for driverless cars, for add a lot of value by processing than getting a surprise during the of the person in the factory who instance, are coming down now. it and producing reports and shutdown itself. Tens of millions trained the robot? The legal aspects are still a major analysis. For instance, we will look can potentially be saved, when issue. On the societal side, there at a power line with 300 towers you consider an example of seven There is concern that programmes are other issues relating to the and assess every individual days of shutdown on a plant, at a and other works designed by robots acceptance of new technologies. component, before inputting this cost of £2m a day. might not be protected by copyright. For example, Google Glass was information into a map-based On a transmission inspection, What are your concerns in this area? plagued by various privacy asset management system. these inspections would normally I can imagine general settings concerns. Within a generation, I In certain applications, our where a robot is given some can imagine that won’t be an issue inspection techniques save Continued on page 10 requirements for a problem, anymore: people will be more used and resources available, and is to being constantly filmed and asked to come up with a solution. documented. This is a standard optimisation But now, you can have a problem, and to solve it, the robot start-up anywhere in the world could come up with something which acquires funding and different and new. Without starts producing some new copyright protection, this could world-changing technology. pose another huge question. Who Society is welcoming this kind owns that product? Giving the of innovation. This is the right rights of that product to a piece time for us to be asking these of software doesn’t make sense. questions. Giving them to the company Dr Rosman is also a Visiting Lecturer in the which asked the robot to solve School of Computer Science and Applied the problem may not make sense Mathematics, at the University of the Saving costs on either, as all it did was ask for a Witwatersrand, South Africa. pylon inspections www.roboticslawjournal.com 9 Commerce: Aerial services H&S: Criminal liability

Continued from page 9 prescriptive legislation that can stifle been carried out by a technician a business’s chances of operating climbing up the pylon tower. They successfully. Health and normally turn off the power on one side The next goal is to get something in of the pylon to do that - and this could he ICAO [International Civil Aviation only be done for a short amount of time Organization]. That will probably be safety in the age at certain periods. We can undertake more of a challenge because there are the entire inspection 192 member states to corral with very of killer robots: while it is on line. different views, and In the wind sector, Companies are very each state has a veto. our model for inspecting There are massive, The criminal wind turbines is nervous about sending massive opportunities around four times manned aircraft there in the US, for instance, quicker compared with because there could be but there have been big liability of robots traditional methods difficulties in entering such as rope access. a real problem if there this market. We have is an accident addressed this by in a workplace You work in over 20 partnering with people jurisdictions. What are operating UAVs there the issues you face on regulation? instead, which allows them to capture environment The biggest frustration is the the data required whilst we can analyse difference in regulation between and report on this data from our Brian O’Neill QC and Rob Dacre of 2 Hare Court different countries. It’s different in inspection centre. examine the issues. each jurisdiction. Some are quite similar to the UK but, even in Europe, How much of an issue is privacy now? It may seem like there are massive differences. In some Not so much. Oil refineries are not the stuff of science countries there are prohibitions. In generally next to houses. The only fiction, but the the Netherlands, for instance, it’s not places that we potentially have privacy criminal liability legal to fly a drone commercially challenges are where there are members of robots in the but we have an exemption. We got of the public in the area. It’s only workplace may the exemption because we are safe been a challenge for us on a couple become legal fact in and take people out from working of commercial jobs such as building the not too distant at height. The Dutch government is inspections in public areas. Dacre future. Boston happy with that. But data protection is going to Consulting Group Having to work within visual line of become more of an issue. There is a lot has predicted that sight is another issue. Some projects - of knee jerk lobbying. A lot is aimed at by 2025 up to a like doing a pipeline inspection - would the hobby users of UAVs and, maybe, quarter of jobs mean going outside the line of sight. at journalists using drones to snoop will be replaced But you can’t do that now in the places on people. We could unfortunately get by either ‘smart we operate - with the exception of disrupted by the same legislation. software’ or robots; France. It’s going to be a while before researchers from we see it. There are hundreds of How will aviation enforcement issues O’Neill Oxford University millions of miles of pipelines where develop? suggest that this could be used. Typically, it is now Over the next few years aviation 35% of jobs in done by guys driving along or by authorities will probably wash their the UK are at risk of ‘automation’ by manned helicopters, however those hands of the smaller systems (sub 4kg) 2035. Accidents in the workplace, are very expensive operations. And in and push enforcement of that onto the and the legal fall-out that results, will Canada, for instance, there are huge police because the volume of traffic is increasingly involve questions about pipelines going through the wilderness. going to be hundreds of times that of how liability is shared out if and when Companies are very nervous about unmanned aircraft. In five years we will those accidents involve robots. sending manned aircraft there because be seeing drones everywhere. In other jurisdictions such questions there could be a real problem if there is are already being posed and not in a an accident. They are very keen to use Which are the best places to operate from hypothetical way. In February this drones as an alternative. a regulatory point of view? year a worker in a Volkswagen car The UK is up there, without a doubt. factory in Germany was killed when a How do you view the specific plans to It’s got one of the most permissive and robot pinned him against a wall. The harmonise laws in Europe? pragmatic approaches to regulating. robot was a mechanical arm EASA [the European Aviation A lot of countries are trying to mirror that moves car parts into Safety Agency] is coming up with a what the UK has done. place. It was capable of If a robot is capable of functioning entirely without framework for harmonisation, based on In the US, the vision of the functioning entirely the Riga Declaration. Federal Aviation a human operator. A police What we have seen Administration is investigation is on-going, without human on paper looks quite Fact: Using drones for very much to make and state prosecutors have operators, does this yet to confirm whether (in sensible. It’s a good energy sector building the regulation very insulate companies balance between permissive. It will be the words of a press officer) making sure there’s a checks can save a polar change. It will ‘anybody was at fault’. from liability for robots high level of safety, £millions a day likely become even more The press officer’s that cause accidents? without having very permissive than the UK. statement may well

10 www.roboticslawjournal.com H&S: Criminal liability BY 2025 UP TO A QUARTER OF JOBS COULD BE REPLACED BY EITHER ‘SMART SOFTWARE’ OR ROBOTS, ACCORDING TO BOSTON CONSULTING GROUP encapsulate the key issue for courts that the robot was acting on its own dealing with workplace accidents where if there are other identifiable breaches robots have been involved. If a robot is (such as a failure properly to train capable of functioning entirely without employees) that were a cause of the human operators, does this insulate accident. Some of the duties prescribed companies from liability for robots that by European regulations are set out cause accidents? And where is liability below, but it is not difficult to imagine likely to go if companies can rely on a cases where employers have breached new defence based on a robot’s ability to any number of duties in relation to function on its own. This article looks employee safety in interacting with at two areas of English law where these robots, even if the robot is capable questions about robot liability may be of making decisions independently. posed, and resolved, in the near future: can establish limbs one and two, the Moreover, as the number of accidents corporate manslaughter and health and ‘substantial element’ caveat will cause involving autonomous machines safety regulations surrounding the use further problems. If it is difficult increases (as it no doubt will), so too of machinery. to establish causation at all where will the foreseeability of risk, and In England and Wales, fatal a machine is autonomous, it will be in time, the number of regulations workplace accidents are dealt with in even more difficult to establish that governing health and safety when the criminal courts under the Corporate mismanagement at a senior level was using robots. Manslaughter and Corporate Homicide a ‘substantial element’ in causing the Health and safety regulations Act 2007. Section 1 reads as follows: breach. currently in force would similarly Fears about a robot lacuna are, prevent companies from avoiding (1) An organisation to which this however, probably misplaced. All of liability where an accident has section applies is guilty of an the above, of course, assumes that the been caused by a robot’s ‘decision’. offence if the way in which robot in question is capable of entirely The Provision and Use of Work its activities are managed or autonomous behaviour, or capable Equipment Regulations 1998 (“the organised – of making decisions, moving and PUWER regulations”) provide best (a) causes a person’s death, and performing its functions without any practice regulations for the use of (b) amounts to a gross breach of a input, at any stage, from machinery in workplace relevant duty of care owed by the human controllers. It environments. The organisation to the deceased. is likely that the robotic It seems highly Health and Safety arm in the German Executive also publishes Section 1(3) restricts the liability of factory, or its equivalent unlikely that an an Approved Code of corporations by prescribing that only in an English factory, employee will be Practice to comply if the way in which the organisation’s does not quite reach this caused injury by a with the regulations activities are ’managed or organised by level of sophistication: which, whilst not given its senior management is a substantial it was capable of robot without some statutory authority, element in the breach referred to in independent operation, failure to abide by can be persuasive to subsection (1)’. In order, therefore, for a but in a way that was regulations concerning courts in establishing company to be criminally liable for fatal uniform and predictable. whether duties have accidents, the courts must find first that Plainly, where the use their safe use been breached. Under an accident was caused by the way in of the robotic arm gives these regulations, it which the company has been, managed rise to foreseeable risks will be very difficult and organised; second that the accident of injury to employers, the courts will for companies to hide behind a robot’s resulted from a ‘gross breach’ of a be quicker to accept that fatal accidents ‘decision’ as the sole substantial relevant duty of care; and third that have been caused by mismanagement, cause of an accident. The PUWER organisation or management by senior and that corporations owed a relevant regulations prescribe best practice in management is a ‘substantial element’ duty of care. preventing employees having access to in the breach arising. Even if a company can establish dangerous parts of machines, training Had the German worker been killed that a robot acted entirely of its own in their use and in risk management, in an English factory, problems may volition, and in an unpredictable way, and proper maintenance. It seems have arisen in relation to all three that does not mean that there will highly unlikely that an employee will limbs of s.1. First, proving causation be no causative link between injury be caused injury by a robot without where a robot is capable of functioning and a breach of health and safety some failure to abide by regulations entirely without human operators duties. Section 2 of the Health and concerning their safe use. will be difficult. If, in essence, a robot Safety at Work Act 1974 places a Companies which use robots cannot has ‘decided’ to behave in a manner duty on employers not just to provide hope to rely, therefore, on an infallible that causes an accident, it may not safe equipment (or non-lethal robots), new robot defence in the very near be possible to establish that senior but also to provide appropriate future. It is still possible to imagine management practices have been a training and supervision with that a scenario in which an entirely cause of the breach, as opposed to the machinery. Employers must ensure autonomous robot makes an entirely ‘decision’ made. Second, the courts may so far as is reasonably practicable - unforeseeable decision which causes be reluctant to find a duty of care to ‘the provision of such information, an accident; and where no breaches of prevent autonomous machines, which instruction, training and supervision health and safety regulations can be operate entirely independently of their as is necessary to ensure, so far as is identified. But that lacuna is very small human controllers, from behaving in a reasonably practicable, the health and indeed: at least for now, that legal and way that is (by its nature) unexpected. safety at work of his employees’. philosophical problem remains in the Third, even if the prosecution courts It will not be enough to demonstrate realms of science fiction. www.roboticslawjournal.com 11 Intellectual property: Patents

participants in the robotics industry? Although only a fraction of the above IP developments in Europe – mentioned patent applications have been issued to date, this will change in the foreseeable future and some the next challenges for the technologies will be monopolised by single players. Wireless communication technology robotics industry will play a prominent role in robotics, regardless of the specific functions How Industry 4.0 will affect the sector of each product, as robots depend on wireless communication to operate, by Dr Jan Phillip Rektorschek in a 50% growth rate over 2013. South be it in industrial production, medical Artificial Korea, Japan, USA and Germany again technology or logistics contexts. The intelligence and were the biggest sales markets besides essential wireless technologies must be robotics are China in 2014. China in particular standardised to link robots to different two of the most is more than keen to outrun the devices, for example to control or innovative fields of established manufacturing powers in service them remotely. Communication technology, with the robotics segment, not only as one among robots, for example at complex many companies of the largest buyers of robots but also assembly lines, requires standardisation investing as one of the biggest manufacturers. of network components across tremendous That last aspect will of course increase different manufacturers and users. sums in researching and developing Chinese exports and give another boost This field will be particularly prone new products. Therefore, three of to the already very strong worldwide to patent litigation, in the way Germany’s largest industry associations competition. mobile communication technology in have launched the “Industry 4.0 The German industry and politicians smartphones is already today. Platform”, a joint project with the have recognised this trend and chose To implement these goals on the German Ministry for Economic Affairs the Hannover trade fair in April 2015 technical level, standards must be and Education and Research Ministry as venue to present their “Industry 4.0 introduced for the technologies: cementing Germany’s position as a hub Platform”, a project dealing with the Specific industry standards will for sustainable production technologies. development and implementation of become established that have to be To protect their investments, the future information, communication, used by everyone seeking to operate businesses have to remain alert not automation and production in a particular market in order to only to data protection and (product) technologies. The project involves make a marketable product. By way liability issues but particularly also the German Ministry for Economic of example, technical standards in to intellectual property developments. Affairs and Ministry of Education and wireless communication usually Innovative companies depend on Research as well as the three industry comprise several thousand patents, using technical IP rights to survive associations as initiators, plus several which are essential because it is not in the market. Germany and Europe research institutes, universities and possible for technical reasons to make are currently experiencing a number virtually all major German industrial standard compliant products without of different developments in patent enterprises. infringing these rights. legislation that innovative companies The project’s list of high-profile Disputes about standard should urgently consider at this participants shows how important essential patents (SEPs) involve early stage. In particular, the recent this topic has become and that even “South Korea, Japan, not only the “ordinary” questions developments in handling standard now, the development of robotics, USA and Germany of patent litigation (is the protected technology actually being used?) essential patents and the planned smart factories and advanced again were the biggest introduction of a Unitary European manufacturing is exposed to but also an entirely different, vital Patent Court System will become very significant market pressure and sales markets besides question: Is the proprietor required important. In the following, these issues lively competition. China in 2014” by antitrust law to issue a license will be discussed due to provide an As the pressure of competition on FRAND (fair, reasonable and overview on the commercial and legal is likely to increase further, IP non-discriminatory) terms? For developments arising for companies rights and most notably patents are patentees, this means they can which are active in the robotics a means to distinguish oneself from participate in their competitors’ sales industry on the European, in particular competitors in technical areas such to some extent (of a fair, reasonable German, markets. as robotics. The industry has spotted and non-discriminatory royalty) but this potential: Studies conducted by have no right anymore to forbid others Industry 4.0 Fraunhofer IAO and IAT Stuttgart to use their patent, at least as long Germany remains a pioneering force in University have shown that over the as the users comply with the legal automation technology and networked recent years, companies especially requirements imposed on them. industries. Several of the major from China, the USA and Germany Over the past years, there have been manufacturers of industrial robots are filed considerably more patent many lawsuits, especially between the from Germany or the European Union. applications in technologies relating major smartphone companies, on how According to a press release of the to robotics and Industry 4.0, such as the duties should be distributed among International Federation of Robotics artificial intelligence, network wireless the patentee and the user of the (IRF Statistical Department, 23 March communication or power supply. patent. Many of these cases revolved 2015), of the 225,000 industrial robots around SEPs, arguing who has to meet sold worldwide in 2014 (+ 27% over Standard essential patents which requirements to ensure that the 2013), 56,000 went to China, resulting What are the implications for the patentee can still enforce his patent

12 www.roboticslawjournal.com Intellectual property: Patents CHINA, THE USA AND GERMANY ARE HEAVY FILERS OF PATENT APPLICATIONS IN TECHNOLOGIES RELATING TO ROBOTICS

EPs and EP applications, which will be transferred automatically into the new system, in other words converted to unitary patents, unless their proprietors have opted out from the unitary system (there will be a “sunrise-period”). The opt-out has to be exercised for every single EP and EP application and incurs an opt-out fee of EUR 80 in each case. A patentee who has opted out and later wishes to re-join the new system, for example for Europe-wide enforcement purposes, can do so by “opting in” for a fee of EUR 80 as well. What does all this mean for innovative companies? Well, these companies have to develop a strategy deciding what they will do with their existing patents once the new system has come into force, either dealing with the new system or even return to national patent applications to avoid the risk of Europe-wide revocation. Since there are not yet any experiences how the new Unitary Patent System will work in practice and because the written law, consisting of the EU rights by way of an injunction or Unified Patent Court System Regulations (EU) No 1257/2012, (EU) that the patent user can plead royalty Also the already enacted introduction No 1260/2012, the Agreement on a payments on FRAND terms. of the new pan-European patent Unified Patent Court and the Rules Recently, the Court of Justice of the system will be of extraordinary of Procedures, contains numerous European Union (CJEU) defined EU- strategic importance inter alia for ambiguities and contradictions, wide rules on how this has to be done robotics companies: Until now, one companies already owning European (ruling of 16 July 2015, case C-170/13). could only file a collective application patents or patent applications or are In particular, the patentee is subject to (EP application) to obtain a bundle of planning to enter into the European significant duties in relation to the user different national patents. Once the market should be aware of the chances of his SEP, which the patentee has to new system comes into force (currently and risks of the new European patent fulfil before he can enforce any claim envisaged for the end of 2016 / early system and start to define their for injunctive relief in court. The ruling 2017) applicants only need one single patenting strategies for Europe right impacts licensing practices throughout application to get one Europe-wide now. the EU. According to the CJEU, as a first patent with unitary effect (one-stop step, the patentee must approach the shopping). According to the European Conclusion patent user with details of the alleged Patent Office, the fees for the complete For companies active in the robotics infringement and offer him a license term of the unitary patent (20 years) sector, IP rights are extremely specifying the amount of the royalty will be reduced by more than 70% over important and will become more so for and its calculation corresponding to the comparable fees for a European reason of their increased use to meet FRAND terms. The CJEU does not patent (EP) for the contracting Member networking requirements. IP rights can describe, however, the exact way in States. be an enormous competitive advantage which this is to be done. On receiving the Thus, on one hand, patentees will for innovators with wide IP portfolios. information the patent user must inform have a cost-efficient alternative of When enforcing patents that qualify the patentee without delay whether obtaining comprehensive patent as standard essential, however, they he accepts the offer. If the patent user protection within the EU and enforcing have to be sure to satisfy the criteria refuses the offer he has to promptly the patent Europe-wide in a single that the CJEU has defined for the EU. submit a counteroffer that corresponds procedure before the new Unified Companies have to become aware of to FRAND terms likewise. In addition, Patent Court, to be established over the the implications of the ongoing reform the patent user has to provide a security next one to two years. of the European patent system and (such as a bank guarantee) to secure the On the other hand, the new system the introduction of the UPC and devise patentee’s claims. of course also involves the risk of the appropriate filing strategies now. Once The specific elaborations of this patent being revoked with Europe- the new system has been introduced, it procedure are highly complicated but wide effect, in one single pan-European may be too late. will directly concern a major part action for revocation, whereas the Dr Jan Phillip Rektorschek is a German qualified of companies engaged in robotics, current system requires a separate lawyer in TaylorWessing’s Munich office and not least because many of the action for revocation for each Member specialises in patent litigation. His work for relevant technologies covering the State once the deadline for filing notice Taylor Wessing is concentrated on advising and representing international and German clients in communication of the interacting of opposition to the European Patent court and out-of-court disputes. He is member devices involve standard essential Office has expired. of UNION-IP and gives lectures for Intellectual patents in some form or other. This applies also for all existing Property Law at the Munich Business School. www.roboticslawjournal.com 13 Global: Regulation THE ADOPTION OF ROBOTICS TECHNOLOGIES COULD IMPROVE PRODUCTIVITY BY 30% IN SOME INDUSTRIES, ACCORDING TO BANK OF AMERICA MERRILL LYNCH Are the regulators ready to deal with the robotics world? Regulators are set to play a crucial role in curbing the potential dangers of robotics – but how confident can we be that these wise people are ready to hold the reins in this complex area?

by Neasa MacErlean Speed of learning and response will be necessary to control the high-speed The aviation and development of AI and robotics. Many wider transport countries will need to rethink their sector are our leading (time-consuming) reliance on parliament experts on safety and to bring in new rules. Spain, for they tend to err on instance, has bodies of experts which the side of caution. study certain areas of law and can But are these regulators ready for the fairly quickly draft amendments which abundance of issues that will affect are then presented to the Congress drones and self-driving to be passed. Franco cars? Cyber security, for thinks that AI/robotics instance, will become Many countries will would need to call a crucial issue on our need to rethink their upon a similar panel regulations of more technical-related road and air highways. (time-consuming) in order for the sector matters to be governed by means of VIPs in particular to work effectively. He lower rank legal instruments’. could become targets reliance on parliament would also like to see Looking at the issue more broadly, in self-driving cars. If to bring in new rules. the creation of ‘core countries which rely on a civil code may they have given away regulations establishing also want to rethink their approach in too much information the guiding principles this area if they do not want to be left about themselves in public, they could (not subject to too many amendments)’ behind by those that can use case law to put themselves at risk of having their which would ‘clearly establish and give quicker responses through the law. car controls taken over on the road by authorise the amendment and detailed More resources and, perhaps, greater hackers. And will regulators keep up with the more subtle developments of Low pay regulation robotics? For example, without clear rules, we could see the frail and elderly deprived of human contact as AI is One of the main areas where regulators and between rich and poor has accelerated in the last increasingly used to care for them. law-makers will find themselves looking at decade. For example, the Sunday Times Rich List Similarly, regulators struggle to contain issues around robotics is that of setting a of the wealthiest 1,000 people showed that they the development of surveillance at the minimum wage. ‘If you raise the minimum wage, were twice as well-off as they had been a decade moment – and could be taken unawares you’re going to make people more expensive before. But there are apparently irreconcilable by the use of nearly invisible mini- than a machine,’ said Marco Rubio, one of the disputes about how low pay should be handled. drones in sophisticated espionage. Republican candidates for the presidential Regulators are involved in more subtle Recent regulatory issues do not bode nomination in a debate in November with other ways than just setting the minimum rate. well. Emissions-cheating technology is candidates. ‘And that means all this automation Enforcement of the minimum wage is an area believed to have started to be used in that’s replacing jobs and people right now is only that can easily be neglected by governments auto manufacturer Volkswagen in 2008 going to be accelerated.’ Mr Rubio which allocate few resources to – but was not exposed, despite clear might not have taken the issue ‘If you raise the this cause. Enforcers in the UK, warning signs, until seven years later. through to its logical conclusion minimum wage, you’re for example, have been handing To create and maintain adequate in this debate but the fact that out penalties which average regulation, there are clear steps that he makes these comments in the going to make people just £685 to employers which need to be taken – investing in the hustings shows just what an more expensive than are caught paying under the system, for instance, developing important subject it is with the a machine,’ – Marco minimum wage. By contrast, the flexibility and speed and educating the public. financial services regulator, the regulators themselves. Luis Franco – a In the UK minimum wage Rubio Financial Conduct Authority, hits lawyer at Perez-Lorca in Madrid who rates have erupted as a major its targets much harder. Fines has a particular interest in robotics issue over the last year (albeit slightly disguised in the millions are common. The Bank of New – says: ‘It is going to be a matter in the form of a national debate on a subsidy, York Mellon was given a record penalty in 2015 of governments investing enough Tax Credit, which many of the low-paid receive). when it was fined £126m for not keeping client resources so that they can keep ahead Views have been polarised on the topic. There accounts fully separate from the bank’s own of people breaking the law.’ is little disagreement over the fact that the gap money.

14 www.roboticslawjournal.com Global: Regulation SMARTPHONES HAVE AN AVERAGE OF 14 SENSORS EACH

open-mindedness about the recruitment of regulators could bring more knowledge about the fields they oversee The Internet of Things – to regulatory panel. But the practical problems here can be immense, says Adam Samuel, a London-based expert revolution and destruction in financial services compliance. ‘One would always like this,’ he says when The Internet of Things has raised such complicated practical issues that, experts suggest, asked if regulators should be better it may have been delayed by a decade. But innovation is starting to solve some of these educated in their fields. He adds: problems – and there are now forecasts that over 30 billion devices will be connected in to ‘However, if regulators were that well Internet of Things (IoT) networks by 2020. resourced the cost would destroy the industry that they were regulating. Regulation is always a compromise in this respect.’ One of the complicating areas for regulators now is the range of aims being set for them. Some are under increasing pressure to take economic issues into account. Officials in Britain’s Office for Nuclear Regulation are said to be concerned at being told in 2014 to take into account a ‘duty to have regard to growth’ while regulating 37 nuclear sites, according to The Independent newspaper. Many regulators are very much aware that they can attract new business to their country by making their regulation attractive – and the To say that the potential for lawyers is be the basis of 5G. World Bank’s ‘Doing Business’ tables huge is almost to mis-understand what Standard-setting is the IT world’s (headed currently by Singapore) is happening. It is a bit like saying that practical version of laws. And lawyers highlight this. The possible dangers of the Bible’s Great Flood offered great who are involved in creating them making regulation over-friendly may opportunities for boat-builders when, in put themselves at the heart of the well increase on the back of growing fact, it destroyed all those who did not business community. ‘Standards are… globalisation. ‘There is always a risk realise what was happening. As with an extremely important part of market of regulator-capture by the big players the arrival of the internet itself, the IoT creation,’ said David Willetts, Visiting in any industry.’ says Adam Samuel. will be so revolutionary that lawyers Professor in Policy Institute at King’s ‘On top of that, the threat to move will find their work practices and work College London, in a discussion on IoT businesses to the least regulated venue agendas overhauled by the changes. this year. The former UK government has been with us for much of the last Not only will lawyers be giving advice minister went on to explain how hundred years. Revolving door set ups in different ways but they will also influential organisations can be if they create similar risks.’ be seeing a growth in demand in take a role in ‘shaping standards’. That In a complicated world, there are particular areas (such as patents advice can ‘help you maintain a key role,’ he some optimistic signs, however. and privacy). added. ‘Well, actually, you can argue Technology can provide answers to The examples which are normally one of the reasons for the success many questions that regulators will given about the IoT include the smart of Vodafone is that mobile phone ask. Anti-collision technology, for fridge which can stock take on your standards were written in a way that example, will make drones safer and behalf and place orders with your supported Vodafone.’ could do away with the need for pages local supermarket when you run low. The IoT is also bringing together in of rules. In an interview with Robotics Robotics will play a growing role – as the same supply chain two sectors – Law Journal (published in this issue), both AI and robots will be used electronics and software – which Lisa Ellman, co-chair of the Hogan to co-ordinate and deliver the have very different legal traditions. Lovells global UAS group, speaks services that the IoT will provide. ‘Standards are…an Electronics tends to use patent of ‘polivation’ as a way forward. One of the big technical issues law – hence the emergence of She says: ‘As we are now seeing the that has held back the IoT is extremely important monopolies for first-movers with potential policy implications for connectivity – linking up the part of market creation’ strong legal teams. Software relies drones, we have a lot of innovators sensors that will be built into far more on copyright – a set of who are developing solutions. I call fridges, parking spaces in Smart laws which does far less to protect what we are seeing “polivation”: Cities and other locations to a network innovators. policy-makers promote innovation and that is accessible to individuals through As for privacy, imagine a world in innovators work hand in hand with their smartphones. The arrival of 5G which each of us is typically carrying policymakers.’ And Luis Franco makes mobile phone technology is expected to over a dozen electronic tags. New a similar point, calling for regulators catapult us forward on that. We are now smartphones typically have 14 sensors who understand mass data processing in 4G – and the much-debated 5G is still – relating to location, touch, the angle and other IT issues. But he also wants in embryo. Telecommunications body at which they are being held and other the industry to play its part. He says: 3GPP held a workshop in Phoenix, variables. The debate about how we ‘You will need to have designers who Arizona in September to plan the new avoid moving into a Big Brother world have some knowledge of law.’ (mobile broadband) standard which will has barely begun. www.roboticslawjournal.com 15 NEXT Analysis and insight for the industry – lawyers, regulators, manufacturers and users ISSUE MARCH FEATURES INCLUDE: SUBSCRIPTION Employment: The British trade union movement reappraises INFORMATION robotics The Robotics Law Journal provides lawyers and others working in the The elderly: Care robots, industry with a clear understanding of the increasing opportunities that are driverless cars and now presenting themselves to manufacturers and users of robotics and AI – human rights and all the regulation that this needs and entails. Taxation: Why Central to the journal is the focus on the drone sector – predicted to become robotics could lead an industry which will be bigger than that of manned aviation. to a worldwide shift towards property taxes YOUR ANNUAL SUBSCRIPTION TO THE ROBOTICS LAW California: How drone JOURNAL WILL BRING YOU: laws are developing in The Robotics Law Journal delivered to you bi-monthly (6 per year) one of the heartlands in a digital pdf format via email. of technology - from Globalaw’s Hanson A paper (hardcopy) edition mailed to you (optional) Bridgett Full access to the Robotics Law Journal online service (launching January 2016) which will include: l Latest issues and archived issues l All premium editorial content l Regulation update l News alerts bringing you the latest breaking news l Timeline of key industry regulatory and other milestones l Drones Focus

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