In a ruling issued last week, the U.S. Court of Appeals for the District of Columbia Circuit vacated the FAA’s Registration Rule for small unmanned aircraft systems (UAS or drones) that are operated for recreational purposes, otherwise known as “model aircraft.” If the ruling stands, hobbyist and recreational drone enthusiasts will no longer be required to register their drones with the FAA. The ruling does not affect existing requirements for commercial operators to register their UAS with the FAA.
In response to news events involving careless operators misusing drones, including crashes at stadium sporting events and hundreds of alleged incidents involving close-encounters between UAS and manned aircraft, shortly before Christmas 2015, the FAA rushed to promulgate a new registration rule that required model aircraft to be registered with the FAA. Since the rule went into effect, more than 800,000 operators have registered their drones with the FAA. To put that in perspective, there are only around 320,000 manned aircraft registered with the FAA.
The Court sided with Plaintiff hobbyist John Taylor who argued that the FAA’s Registration Rule, as it applies to model aircraft, directly violates Section 336(a) of the FAA Modernization and Reform Act of 2012, which states that the FAA “may not promulgate any rule or regulation regarding a model aircraft.”
We are delighted to welcome market-leading M&A partners Richard Climan, Keith Flaum, and Jane Ross, and IP and Technology Transactions partner John Brockland, who have joined Hogan Lovells.
John Brockland focuses on strategic and commercial transactions involving the development, transfer, and licensing of technology and intellectual property assets. He has represented companies in a variety of industries, such as software, semiconductor, internet, renewable energy, and healthcare.
Brockland has been ranked as a leading lawyer for IT & Outsourcing by Chambers USA and Chambers Global. He is ranked Band 1 in California — IT & Outsourcing: Transactions. He earned his B.A. from Trinity University and his J.D. from the University of Chicago Law School.
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The final report on the European Commission’s e-commerce sector inquiry was published last week and contains some important observations about how online channels of distribution are transforming consumer goods and digital content markets.
Margrethe Vestager, the European Commissioner in charge of competition policy, launched the Commission’s e-commerce sector inquiry in May 2015, announcing that “European citizens face too many barriers to accessing goods and services online across borders”. The final report largely confirms the Commission’s preliminary findings published in September 2016, but also reflects comments received in relation to those findings.
The inquiry was intended to identify possible competition concerns in European e-commerce markets, drawing on information collected from 1,900 stakeholders across all 28 EU Member States and an analysis of around 8,000 distribution and licence agreements.
The Commission has stated that the report will inform antitrust enforcement in European e-commerce markets, with the Commission suggesting that it will open further investigations in this area (in February 2017 it opened three separate investigations into suspected anti-competitive practices in e-commerce).
On Thursday 4 May 2017, Hogan Lovells’ Tech Hub hosted Azeem Azhar, renowned strategist, product entrepreneur and writer, who spoke about the current status and implications of Artificial Intelligence (“AI”).
Science fiction or science fact: the current AI boom
Far from being a futuristic ambition, we are living in a world where countless daily activities are powered by AI. Whilst Artificial General Intelligence may yet be a few years away, we are seeing applications of Artificial Narrow Intelligence across a range of use cases from virtual personal assistants to news generation, personalised content and movie recommendations. As Azeem outlined, this penetration of AI over the past few years has been growing exponentially. This has been enabled by the combination of progress in three critical areas, each of which supports and feeds into the other – processing power, availability of data and innovations in machine learning.
Our ability to exploit these technological developments as consumers and businesses has been dramatically enhanced by the availability and accessibility of a range of devices on different platforms (iOS, Android, enterprise IT, etc.) which have themselves been further enabled by the advanced integration of software with real world. The result is continued improvements in the practical usefulness of AI in the real world, leading to greater take up of the technology, rapid ROI and corresponding growth in investment.
The Hong Kong Securities and Futures Commission (“SFC”) has issued a paper containing proposals to introduce cyber security guidelines under the Securities and Futures Ordinance (the “SFO”) applicable to internet brokers (the “Cyber Security Consultation Paper”). Comments are open through 7 July 2017.
The Cyber Security Consultation Paper reflects a sharpening of focus by the SFC on cyber security issues. The SFC notes that in the 18 months up to 31 March 2017, 12 licenced corporations reported 27 cyber incidents – the majority involving access to clients’ trading accounts. These incidents resulted in unauthorised trades to the value of HK$110 million. The Hong Kong Computer Emergency Response Team Coordination Centre is reported to have handled 6,058 cyber security incidents in 2016, an increase of 23% from 2015.
The Cyber Security Consultation Paper highlights the prevalence of a particular form of “pump and dump” scheme in which hackers gain unauthorised access to internet trading accounts and use the cash and securities in these accounts to fund the purchase of penny stocks targeted by the hackers. The hacked accounts are used to pump up the prices of these penny stocks, following which the hackers dump the stock, causing significant losses to the hacked accounts.
On 12 May 2017 the European Aviation Safety Agency (“EASA“) opened a consultation into sweeping new regulations on the operation of unmanned aircraft systems (“UAS” or drones) in European airspace. Individuals and companies that are interested in the future of UAS operations in the European Union (“EU”) should carefully review the Notice of Proposed Amendment and consider participating in the review process by submitting comments and letting EASA know their views on all aspects of the proposed regulations.
Under the current regulations, EASA only regulates large UAS with a maximum take-off weight of 150kg or more and the regulation of UAS with a maximum take-off weight of less than 150 kg is reserved to Member States. The European Commission and European Parliament are currently trying to extend the EU’s regulatory competences (jurisdiction) to include authority over all UAS weighing more than 250g. EASA’s new proposal will likely spur debate among industry stakeholders over whether this new and innovative technology should be regulated more broadly by EASA or by the individual Member States.
Who is in charge?
EASA, the European Parliament, and the European Commission argue that Member States’ regulation of UAS use is inconsistent and does not provide for adequate rules for cross-border UAS operations.
According to EASA, operators and manufacturers of UAS have “pleaded for a harmonisation” of the rules to allow for the creation of a European “market for UAS“. EASA argues that the current regulatory framework: (i) often creates barriers to entry for businesses in markets that could be made significantly more efficient by the use of UAS; and (ii) requires businesses to comply with a patchwork of different technical requirements in different Member States. Recognizing that a fragmented UAS regulatory system is hampering the development of a single EU market for UAS and cross-border UAS operations, the Notice of Proposed Amendment seeks to harmonise the regulation of UAS with a maximum take-off weight of 25kg throughout the European Economic Area (“EEA”).
Major companies, health care organizations and government agencies are facing a wave of cyberattacks involving ransomware that takes control of computers and denies access until a ransom is paid. These attacks are occurring on a global scale and in some cases are having a significant impact on business and healthcare operations. The cyberattack has disrupted targets throughout the world from Britain’s National Health Service to US Fortune 500 companies, the Russian Foreign Ministry, and universities in China.
Protecting Against the Threat
Security measures that can be taken to help protect against the threat are evolving as more information becomes available. Key measures that we advise counsel to confirm are in place include:
- Anti-virus signatures. Anti-virus signatures that will protect against known variants of the ransomware are available for most products. Your IT department should confirm availability and deployment of those signatures.
- Monitoring. Your information security team should monitor for new variants of the ransomware and take action to maintain protection against those new variants through deployment of updated malware signatures as available.
- Containment Plan. In the event that systems are compromised, as a priority action contain the affected system as quickly as possible to stop the spread of the ransomware within the network while otherwise activating your organization’s incident response plan.
- Response Plan. Consider now how your organization would likely address key issues raised by ransomware attacks, such as whether and how to pay ransom; how to interact with law enforcement; and the process by which to restore operations
With decision of 8 May 2017, the regional Court of Berlin referred to questions for preliminary ruling to the Court of Justice of the European Union (CJEU). The court is concerned whether the rules on the press publishers’ neighbouring right – as implemented into German copyright law in 2013 – were properly enacted back then. Specifically, the judges wish to receive some indication and guidance on whether the German legislator should have notified the European Commission in accordance with the Directive 98/34/EC laying down a procedure for the provision of information in the field of technical standards and regulations and of rules on Information Society services when enacting Secs. 87f to 87h of the German Copyright Act. This did not happen. Accordingly, the question now raised by the court is truly crucial as failure to notify the German bill leads to the domestic statute being deemed inapplicable.
The original case was brought before court by the collecting society VG Media and the defendant is Google. As part of Google’s services, short text passages, so-called “snippets“, are displayed as part of the individual search result. Those snippets sometimes happen to be taken from digital press publications. Usually, there is no explicit authorisation being obtained from the respective press publisher. Rather, Google acts on the assumption that such snippets may be displayed without any particular license. VG Media takes a different position in this respect and thus took Google to court.
The European Commission is taking stock of what has been accomplished regarding its Strategy for a Digital Single Market. Two years ago, on 6 May 2015, Commissioners Oettinger and Ansip announced their strategy to create a single European market in the online world. Such market should rest on three pillars: (1) better access for consumers and businesses to digital goods and services across Europe; (2) creating the right conditions and a level playing field for digital networks and innovative services to flourish; (3) maximising the growth potential of the digital economy.
Back in 2015, President Jean-Claude Juncker said:
“Today, we lay the groundwork for Europe’s digital future. I want to see pan-continental telecoms networks, digital services that cross borders and a wave of innovative European start-ups. I want to see every consumer getting the best deals and every business accessing the widest market – wherever they are in Europe. Exactly a year ago, I promised to make a fully Digital Single Market one of my top priorities. Today, we are making good on that promise. The 16 steps of our Digital Single Market Strategy will help make the Single Market fit for a digital age.”
On 20 April, Hogan Lovells hosted the second instalment of the 2017 webinar series on emerging issues with the Internet of Things (IoT). This instalment focussed on the potential patent law issues presented by IoT technology.
Dr. Chris Mammen, a partner in Hogan Lovells San Francisco office, considered how these issues can impact companies in the IoT space, and discussed what companies should do now to prepare for the inevitable disputes that will arise.
The IoT creates many opportunities for patent protection: from sensors and processors, to transmitters, hubs and servers, and even the processing algorithms themselves. Companies in this space must think about which areas are or will be of most value (and how these can be protected) and which areas have the potential to cause problems now or in the near future.
The range of potentially patentable areas gives rise to a number of issues which were considered on the webinar. These include: