Using Your Drone for Your Business – The Sky is NOT the Limit

An short article first published on my firm’s website:

Anyone watching or reading the news over the last few months will have noticed an increase in stories concerning drones. These stories reach from the mundane (drones being used to inspect pipelines and powerlines) to the ridiculous (a man shooting down his neighbor’s drone with a shotgun). Drones are a fairly new technical innovation and, unfortunately, the laws concerning safe drone operations, both for pleasure and profit, have not caught up. Nevertheless, there are some rules and regulations in place and the U.S. government agency responsible for the safety of U.S. airspace, the Federal Aviation Administration (“FAA”) has not been idle. This article shall provide a very general overview of what rules and regulations must be observed when operating a drone for commercial purposes.

By some estimates, one million drones or more may be sold this holiday season. When operated for pleasure by hobbyists, there are very few pitfalls for drone operators, as long as common sense prevails. Drones cannot be operated near airports and no higher than 400 feet above ground level, to assure that the drone does not enter the national airspace. Other restrictions also apply, such as operating a drone over a sports event or other large gathering of people, which is generally prohibited.

Drones can have many uses in the business environment. From taking aerial shots of homes for real estate companies, pipeline and power line inspections, replacing security foot patrols in large industrial establishments, for television and movie productions, and for landscape and cityscape photography, the advantages of using a drone are clear. Technology has advanced to the point where certain drones can operate entirely autonomously, following a pre-programmed flight path before returning to the point of origin, taking video or still pictures along the way. For some tasks, the cost savings are potentially significant. It is, therefore, not surprising that many companies are hoping to use drones in one way or another.

However, when a drone is used for a commercial purpose, the operator can easily find him or herself in hot water.

Recently, in a much publicized case, the FAA proposed to fine SkyPan International, a Chicago-based drone operator, $1.9 million for repeatedly violating FAA regulations and flying drones in restricted airspace. The FAA contends that SkyPan conducted 65 flights over Chicago and New York, all without clearance from air traffic controllers. While the fine will probably be appealed and may be reduced, this case highlights why the issue of commercial drone operations is one that must be taken seriously.

The FAA is currently working on new rules specifically for the commercial operation of small (less than 55lb total weight) drones. Pending promulgation of such rules, which may include a requirement that all drones – private and commercial – must be registered with the FAA, certain existing laws are being used by the FAA to impose rules and limitations on how, when and by whom drones can be flown commercially. In order to avoid being fined, every commercial drone operator must be aware of these rules and follow them to the letter.

There are presently three methods of gaining FAA approval for flying civil (non-governmental) drones for commercial purposes:

  1. Special Airworthiness Certificates – Experimental Category (SAC-EC) for civil aircraft to perform research and development, crew training, and market surveys;
  2. obtaining a type and airworthiness certificate for a drone in the Restricted Category (14 CFR § 21.25(a)(2) and § 21.185) for a special purpose or a type certificate for production of the drone under 14 CFR § 21.25(a)(1) or § 21.17; and
  3. filing a Petition for Exemption with a civil Certificate of Waiver or Authorization (COA) for civil aircraft to perform commercial operations in low-risk, controlled environments. This is commonly referred to as the “Section 333 Exemption” and will, for most operators, be the easiest to comply with.

Section 333 of the FAA Modernization and Reform Act of 2012 grants the Secretary of Transportation the authority to determine whether an airworthiness certificate is required for a drone to operate safely. It authorizes the FAA to grant exemptions from FAA rules limiting commercial operation of Unmanned Aerial Systems (drones) pending the adoption of permanent rules. To obtain a Section 333 Exemption, a petition is filed with the FAA. The information submitted with the petition must include, among other items, information about the drone itself, the operator of the drone, the pilot in command and the nature of the operations to be conducted with the drone. The petitioner must also state with specificity with regard to which rules and regulations the exemption is sought. Petitioners should allow at least 120 days for processing and review of any exemption requests.

Once granted, the exemption will be specific to the drone or drones named (usually by the manufacturer’s name/type) in the petition and will spell out all restrictions regarding use of the drone(s) for the purposes specified in the petition. Most exemptions will include the following pre-defined restrictions:

  • Drones may not be operated in excess of 400 feet above ground level.
  • Drones may not exceed a ground speed of 100 mph.
  • Operations authorized by the grant of exemption are limited to the drone or drones named in the petition, which must weigh less than 55 pounds including payload.
  • All operations must be “line-of-sight” from the Pilot in Command (PIC).
  • In addition to the PIC, there must be a second person, who acts as an observer.
  • The PIC (but not the observer) must hold any one of the following certifications (licenses): airline transport pilot, commercial pilot, private pilot, recreational pilot, or sport pilot. This means that when a drone is operated for a commercial or business purpose, the PIC must in all cases be a licensed pilot.
  • The PIC must hold a current FAA airman medical certificate or a valid U.S. driver’s license issued by a state, the District of Columbia, Puerto Rico, a territory, a possession, or the Federal government (note that Sport Pilot licenses do not require that the pilot obtain an FAA airman medical certificate).
  • The PIC must meet the flight review requirements specified in 14 CFR §61.56 in an aircraft in which the PIC is rated on his or her pilot certificate.
  • The drone must be registered with the FAA and the registration number (commonly referred to as an “N-number”) must be affixed to the drone. The numbers on the drone must be as large as practicable.
  • Night flight will generally be prohibited, though it may be possible to obtain an exemption specifically for night operations, in which case the FAA will likely require that the drone be equipped with a rotating beacon and other position and navigation lights.

Depending on the purpose of and the manner in which the drone is to be operated, more specific restrictions and may also be included.

Of these restrictions, the most difficult to comply with would appear to be that the PIC must hold at least a sport pilot license. It means that where commercial drone operations are concerned, the drone cannot be flown by just anyone. A company wishing to employ drones must, as a logical consequence, also employ a licensed pilot.

One might be tempted to argue that this requirement is unnecessary, considering that these are “toys” that can be flown by anyone, requiring very little skill to operate. However, since drones have been observed flying as high as 2000 feet above ground and can weigh 50 pounds or more, the potential consequences of a collision with an aircraft are apparent and there have been reports of near misses. The ingestion of a 50 pound machine into a jet engine could have fatal consequences. It should not surprise anyone that the FAA, having as one of its primary tasks the safeguarding of the national airspace, would seek to minimize the risk by regulating drone use.

The FAA is keenly aware that not only commercial drones can present risks to airspace users, but privately used drones as well. It is for these reasons that new rules are currently being written that will in all likelihood require the registration of every drone that is privately owned and operated, even if for pleasure only. The FAA has assembled a task force of government and industry stakeholders to work out the details of these new requirements. It is likely that registration will take place at the time of sale. Retroactive application of the registration requirement to drones sold prior to December 2015 should be expected, though that is among the details to be decided. The task force is to propose specifics by November 20, 2015, with the registration requirement to be in place by mid-December. Whether this timeline is realistic remains to be seen.

Considering all of the foregoing, it becomes obvious that anyone wishing to use their drone in a commercial enterprise of any kind will have to comply with some more or less burdensome regulations or run a substantial risk of being fined or otherwise punished by the FAA. We urge all parties considering the commercial use of drones to obtain legal guidance before doing so.

For more information please contact Thilo C. Agthe at 212-509-4714 or via email at