Robotics

Robotics Challenges

Robot manufacturers, distributors, resellers, and purchasers/operators face a number of legal challenges. First, safety and liability are top concerns. Because robots operate and many move through the physical world, they may cause accidents. Accidents may cause property damage, or even worse, injuries, some of them catastrophic, and possibly even deaths. Sellers (manufacturers, distributors, and resellers) may be liable to their customers and others that may be injured as a result of accidents. If there are enough accidents, claimants may band together to file class-action product liability suits. If there are enough of these suits, and if insurance coverage is inadequate, product liability suits may even put sellers out of business.

Buyer Concerns

Buyers, customers that buy robots and operate them, are also concerned about safety and liability. Robot owners do not want unsafe products that could injure themselves, their workers, or members of the public. Risks of property damage, injuries, and even death are concerns for buyers as well as sellers. Injured workers may file workers’ compensation claims or even lawsuits against their employers, depending on the state and the degree of their employers’ wrongdoing. Robot owners/operators whose robots injure or kill members of the public may also face lawsuits. Again, if there are enough claims and if insurance coverage is inadequate, the losses may drive an owner/operator out of business.

Contracts

Second, businesses selling or buying robots need contracts to protect their interests. Sellers need to sell their robots and, as a practical matter, can’t sell any robots unless they have a written contract with the buyer. Many buyers won’t do business with them without a written contract. Also, wise sellers’ executives know they need a written contract to protect their legal interests. The need to create a form robot sales agreement is an obstacle to closing the sale and collecting revenue. They also know it’s not a good idea to just copy an agreement from the Internet or try to write something without professional help.

Robotics companies that already have a form agreement still need legal assistance to help them protect their interests when the other side proposes changes to agreements. In addition, they may have revenue targets to meet at the end of each month, quarter, or year. Effective legal assistance can help negotiate deals to bring in needed revenue while protecting their legal interests.

Compliance

Third, compliance is a key issue for robotics companies. They may face robot-specific compliance obligations, such as those for installing and operating robots in the workplace. Also, companies developing robotics technologies may face export control requirements prohibiting the transfer of technology and technical information outside the United States, or even to foreign nationals within the United States. The operation of drones (unmanned aerial vehicles) is regulated by the Federal Aviation Administration. There are also state laws that restrict how drones can be operated. Also, manufacturers and operators of robots may need to comply with general industry requirements for safety in operations. Finally, there are general international, federal, and state laws on data privacy and security that apply to manufacturers and operators of robots. Examples include the California Consumer Privacy Act (CCPA), the European Union’s General Data Protection Regulation (GDPR), federal data protection laws in healthcare (HIPAA) and financial services (GLBA). State laws on privacy, breach notification, and data security may apply as well. A failure to comply with these laws may lead to governmental investigations, civil or even criminal penalties, and the possibility of lawsuits against the company. 

Proper Incident Response

Fourth, when accidents, data breaches, and other incidents do occur, a company should investigate what happened and what factors caused the event. Failing to obtain legal assistance after the event could open a business to greater liabilities than in situations where the business obtained prompt legal assistance. For instance, failing to preserve evidence of an event in the proper way may prevent the business from asserting legal defenses to claims against it, or prevent it from seeking remedies from other businesses or individuals that may have been responsible for the event.

Documentation

Finally, the lack of policies, procedures, and plans can lead to legal risk for a manufacturer or operator of robots. Good documentation would show a judge or jury that the business has thought about risks that arise, has planned in a systematic way to handle risks, and has an organized way to address the risk. Lawyers opposing your business would jump at the opportunity to show an absence of documentation to manage your operations, or if your business has ignored documentation that it wrote at an earlier time but left on the shelf.

These legal challenges exist for both those on the sell side of robotics – manufacturers, distributors, resellers, and retailers – as well as those on the buy side – businesses that purchase robots or fleets of robots and put them into operation. Sellers face liability from contracts they agree to; they must deliver what they promised in their agreements. Moreover, if their products injure purchasers, co-workers, or members of the public they may have liability for product liability or related claims. Buyers who operate robots may have claims to workers and members of the public when the robots they buy injure individuals. They may face workers’ compensation claims, or worse, depending on the law in a given state, they may face worker lawsuits for intentional or reckless disregard of worker safety.

Robotics Solutions

Silicon Valley Law Group attorney Stephen Wu can help your business mitigate the risks involved with selling and operating robots or fleets of robots. First, he can assist in the design phase or procurement process. While any business wants to produce and purchase products that solve a business need, the design or procurement process must include an examination of what features in a robot are important and risks associated with compliance, safety, privacy, and security. Steve has worked hands-on in design meetings with teams focused on product development, sorting through important features that are important for a product, and weighing in on legal risks. The best advice he can provide to a business in robots is pointing out different options. He can advise a company to pick one of the options based on which one will minimize legal risk or maximize the legal strengths of the business.

Interdisciplinary Teams

In any design or procurement planning process for robots, the business should manage legal and other risks associated with making or buying the robots. The business should have an interdisciplinary team to consider risks as part of the development and procurement process. Team members should identify a universe of possible threats, whether they are in the areas of safety, data protection, legal, or others. They should consider how likely and frequently these threats will occur and the magnitude of their impact should they occur. Team members can then assess what requirements, controls, and safeguards they can implement to prevent risk and implement those that make sense from an effectiveness and cost perspective. Steve has helped many companies with risk assessments of various kinds over the years. His knowledge and experience can help reduce potential liability for the company and put it in the best position to exercise its legal rights against other parties. 

Compliance Obligation Assurance

Second, Steve can help robotics business comply with applicable laws. He has helped many clients identify the laws that apply to them, tackle burning issues regarding emerging new laws, and implement compliance programs to satisfy legal requirements. An effective compliance program can minimize the risk of paying civil penalties to governments or facing costly plaintiff suits. The best time to consider compliance obligation is now. Too often, in the development or procurement process, legal compliance is an afterthought. If compliance turns out to prevent a company from selling or buying a product, costly delays and changes of plans may result. Steve has helped businesses handle compliance obligations early in the process through actual sales to head off costly delays before they occur. 

Agreements

Third, Steve and his colleagues at Silicon Valley Law Group negotiate technology sales, purchase, and license agreements. SVLG also drafts and negotiates consulting, joint marketing, and service agreements to support businesses in the robotics field. Our firm brings the perspective of decades of technology transactions experience together with experience in resolving disputes about technology agreements. Steve in particular started his legal career as a litigation lawyer and continues working together with his litigation colleagues in the firm on litigation matters. His experience with lawsuits shows how language can be interpreted (and misinterpreted). He feeds this experience into his agreement drafting and negotiation of robotics agreements to prevent misunderstandings, properly set expectations, and maximize the legal results his clients obtain from their agreements.

Incident Response

Fourth, when accidents and data breaches do occur, Steve can lead a team of lawyers in SVLG and experts to investigate what went wrong and what caused the event. His colleagues are able to collect and preserve evidence so that it is available for legal proceedings when needed, and to avoid a client’s loss of legal claims because of the loss or corruption of evidence. He can then lead a response with legally-required notifications, preparation for lawsuits against the business, or other legal actions in response to an event. In cases where a client may be the victim of espionage or trade secret theft, Steve and his colleagues can file suit against those responsible and help report the event to law enforcement agencies for possible government actions against the wrongdoers. 

Litigation Support

Disputes, lawsuits, and governmental investigations are almost inevitable with any robotics business. For instance, Steve sees a steady stream of cases filed against surgical robot manufacturer Intuitive Surgical. Other cases involve robots not working as claimed or disputes about intellectual property rights. With Steve’s experience in both the technology of robotics and intellectual property law, he is uniquely positioned to assist clients with litigation involving robots. He brings to bear 30 plus years of experience with technology and intellectual property law and resolving disputes in federal and state court.

Data Security and Privacy Programs

Finally, Steve works with clients to create policies, procedures, plans, and other documentation to govern the manufacture, sale, purchase, or operations of robots or fleets of robots. The key to effective management, especially in the data protection area, is advance planning and preparation. For over 20 years, Steve has been helping clients with creating data security and privacy programs, writing sophisticated security policies, privacy policies, and subordinate documentation to avoid data breaches. He is now helping clients create privacy and security programs to address the California Consumer Privacy Act (CCPA), the European Union’s General Data Protection Regulation (GDPR), state privacy laws, and state data security and breach notification laws.