If you sell UAVs, quad-copters, multirotors or fixed wing unmanned aircraft, you likely import, sell and ship drone batteries. In this episode of Drone Law Pro Radio, drone attorneys Enrico Schaefer and Casey Butler discuss a number of important regulatory, shipping and import/export issues surrounding UAV battery technology. If you are involved in the manufacturing, shipping or import/export of drones using batteries to power your drone, you need to listen to this show.
- Regulations that apply to battery technology.
- Import and Export considerations if you are selling or shipping drones across territorial boundaries.
- Intellectual property issues around battery technology including trade secrets and patents.
- You cannot have loose batteries in your kept luggage. You can bring batteries on your carry-on.
- You start running export compliance issues where you cannot export those to certain areas or certain countries without a license.
Listen to the show at the bottom of this transcript
Enrico: My name is Enrico Schaefer at DroneLaw.Pro, UAV attorney. We are here today with James Casey Butler who is an attorney, and of counsel to Traverse Legal and DroneLaw.Pro. Casey has a lot of experience in a variety of different practice areas that are somewhat unique to UAV and Drones. He was formally the General Counsel to the Battery Innovation Center. That was a Center that was focused on developing the next generation of innovative energy storage technologies and battery components. Today, Casey, I want to talk a little bit about drone batteries. We know that this is a big part the UAV and drone technology space. So, let’s just assume that you are partnering with a lithium-ion battery maker. What kind of regulations do you need to be thinking about in that situation.
Casey: In the maze of regulations on this is called UNDOT. They are globally accepted and approved. They come out of the U.N. and every country that is subject to the U.N. or underneath their jurisdiction actually approves these. UNDOT is all of the testing required for batteries. So what we run into is drone manufacturers that use new kinds of batteries or new battery packs. You have to be sure that you are battery provider has already done UNDOT. If they haven’t done the UNDOT testing or submit for Waivers, which you can get, then it will stop shipment on any shipment of drones that involve these batteries.
Enrico: So if you are manufacturing drones and you are incorporating either your own battery technology or a third party battery technology, you need to be aware of these regulations. I take it that this is something that you have seen actually in the market in that has posed a problem.
Casey: Yes, I have definitely seen manufacturers be late on deliveries because that they didn’t anticipate the requirements associated with the testing of batteries. Or another thing that they have run into is called the Pipeline Hazardous Material Safety Administration. This is all required regulations for packaging and shipping lithium-ion batteries which are considered to be hazard materials. They do not anticipate that and so that when they go to UPS or FedEx, all of the sudden they have to get all of this extra packaging that they didn’t anticipate or even build the cost into for that.
Enrico: So let’s say that I am a Drone manufacturer and I incorporate a third party battery into my drone, what kinds of things do I need to be thinking about in terms of shipping of that drone with the battery to customers?
Casey: There is restrictions on the amount and size you can actually do. You actually have to get special requirements; you have to get special requirements as far as anything over five kilograms of lithium-ion batteries in your drone. You have to get special approval associated with that. So any lithium-ion batteries, the battery itself, is greater than one hundred watt hours or the individual lithium-ion cells are greater than twenty watt hours or the combined weight of all of your lithium-ion Batteries is greater than five kilograms. At that point, you have to look at dangerous goods contracts with your freight forwarder or freight provider and some additional regulations.
Enrico: Even if I am just a drone pilot and I am traveling to another state to do a drone shoot, I have battery issues right? We all know that traveling with batteries through airports and on airlines is sometimes a challenge. Can I have loose batteries in my luggage? What are some of the requirements there?
Casey: You cannot have loose batteries in your kept luggage. You can bring batteries on your carry-on only. Those are limited to one hundred watt hours per battery. If anything above 100 to 160 watt hours, you need to get airline approval and you can only have two of those. Anything about 160 watt hours, you cannot put on a passenger airplane.
Enrico: What about shipping those? Is that an alternative for someone who doing a drone shoot and needs to get 10-12 batteries to a location?
Casey: Yes, that is an alternative. You can ship them on cargo as long as you meet the packaging requirements and the labeling requirements. You cannot ship anything on a passenger. If they find out, you will get in big trouble.
Enrico: Right. I always know that when I go to check, one of the questions, when I am at the Kiosk, checking in for my flight is “Do I have any lithium polymer batteries? I really never know how to answer that question. I know that I do have them, but you know, I always worry whether that is going to affect my flight and what happens next when I say yes.
So, do you have any advice? Another issue that we see a lot with batteries, is intellectual property, right? There is a lot of intellectual property wrapped around battery technology. Tell us a little bit about that.
Casey: I think we are going to find out that as drones get more and more advanced and sophisticated with their battery systems, you are finding that the battery is not be utilized to its fullest capacity, because the BMS, which is called the Battery Management System, and the software that’s running your vehicle are not talking as well. When you start working with these battery manufacturers you are going to find out that the BMS and your CPU need to talk more and more. So you need to have a clear line in the sand of where their IP is and where your IP begins when it comes to sensors of who sends what back and forth. If they suggest that you are going to have to have an extra sensor over here to test wind speed, is at their IP or your IP? You really have to be cognizant of that because you are integrating some really complex systems.
Enrico: We are already working on a number of tech patents for different software and hardware manufacturers in the drone space. Of course, the licensing of that IP upstream and downstream can be really complex. You need to define both what your intellectual property is, whether it is trade secret or patent, before you enter into those relationships, right? Because sometimes disclosing your IP can waive your ability to get a patent in the first instance. So, you need to be ahead of the curve and you need to do what we call an IP or patent audit to find out what in your product might be patentable or protectable as a trade secret. Once you have identified that then you can work on your licensing agreements and non-competes and the rest. The other thing, Casey that you have a lot of expertise in is import/export. So let’s talk a little about import/export restrictions when it comes to batteries.
Casey: For your standard lithium-ion batteries, there are very few import/export restrictions on batteries. There is maybe four or five countries that you cannot export these batteries to. Like your bad players, Sudan, you’re North Korea, and what not. But what happens when you get to higher energy densities that aren’t commercially available, they are mostly developed for military uses or in labs, around the 300 watt hours for kilograms. You start running export compliance issues where you cannot export those to certain areas or certain countries without a license.
So as you are getting your higher and higher power energy densities, it is definitely worth looking to see if that battery runs up against the export compliance. You should be asking your manufacturer or your battery provider, no matter what, you should always ask them if this is export controlled battery and to where?
Enrico: That is something that we can do for clients. Casey has got a lot of expertise in this area. If you need to have an audit done of your technology done to find out if whether or not there are export restrictions, Casey is the attorney for you. Casey it has been great to have you on the show today. We will certainly be digging more into these issues in future shows and we will see you next time. Thanks Casey.