Federal Regulatory Compliance

The National Highway Traffic Safety Administration (NHTSA) will play an active role in shaping the driverless future. Its first significant step, Federal Automated Vehicles Policy released in September 2016, sets a framework for regulatory review of highly automated vehicle technology. NHTSA has also shown it will apply current Federal Motor Vehicle Safety Standards (FMVSS) and other policy guidance to these new technologies, with its review of Tesla’s forward crash avoidance systems following the fatal crash in May 2016 and a special order directed to semi-autonomous aftermarket startup Comma.ai that forced it to pull out of the market. In the not-so-distant future, we anticipate mandatory safety standards specific to vehicle-to-vehicle (V2V) communications, self-driving technology, and human-machine interfaces.

Warner Norcross has a highly skilled team of lawyers specializing in representing automotive suppliers in safety-related regulatory compliance matters, from conducting internal defect investigations and responding to NHTSA actions, to handling warranty and recall issues and complying with TREAD Act reporting.

State Regulation

The hesitance of federal regulators to impose innovation-deterring mandatory safety rules for driverless technology creates a vacuum that state lawmakers are anxious to fill. Eight states (and the District of Columbia) have already enacted laws regulating the testing and/or operation of autonomous vehicles on public roads. Companies doing business in this space thus face the possibility of a patchwork of legislative frameworks, making for a complex compliance challenge. Our attorneys monitor policymaking developments in all 51 jurisdictions to make sure our clients are always up to date.

Product Liability

The biggest hurdle to the deployment of self-driving cars and trucks is the vast uncertainty surrounding the liability risks faced by product developers. Automotive suppliers and software providers alike must apply traditional principles—negligence, strict liability manufacturing and design defects, failure to warn and misrepresentation—to increasingly complex arrangements involving jointly developed software dependent on external data sources. Companies will also continue to allocate some of the product liability risk through contractual provisions of warranty and indemnification. Our attorneys have a wealth of experience in successfully defending automotive suppliers in complex product liability litigation and dispute resolution. They understand the issues implicated by the new technology and counsel clients on how to avoid or mitigate product liability risk.

Supply Chain Risk Management

The introduction of autonomous car and truck tech is a significant part of an ongoing sea change in the automotive supply chain. Along with a consolidating supply base, the entry of non-traditional component suppliers, and the use advanced data recorders that can better isolate safety defects, this “disruptive innovation” will change the landscape of supply chain risk management. One possible development related to the new technology is a departure from PPAP and the adoption of a different testing and approval paradigm.

However the specific changes work themselves out, our attorneys recognize an opportunity for suppliers to leverage the shakeup to better manage risk. With decades of experience navigating the trucking and automotive supply chain on behalf of our clients, our attorneys appreciate the nuances of the industry’s notoriously arcane purchasing and business practices. They confidently tackle issues related to terms and conditions, supply agreements, software licenses, and the “battle of the forms” that can ensue between a customer and vendor.

Collaborative Innovation

Some pundits and prognosticators believe the changes in the auto and tech industries are pitting Detroit and Silicon Valley against each other in a zero-sum battle for supremacy. We see instead an opportunity for creative partnerships to bring together two cultures that have a great deal to learn from one another. Joint ventures, joint development agreements, standard-setting organizations, and public-private partnerships all provide avenues for stakeholders to collaborate in new ways, but not without risks of their own. Our attorneys assist established suppliers and new entrants alike in navigating the unique aspects of contracting in these cooperative settings without running afoul of antitrust laws.

Intellectual Property and Technology Licensing

In the modern automotive industry, vehicles are advanced computers, driven by complex technology and proprietary software.  But, this age of vehicle as technology hub and operating system raises intellectual property and technology licensing issues for both automotive manufacturers and suppliers alike.  The automotive industry must be more aware of technology and intellectual property licensing issues now than ever before.  Whether incorporating a highly technical piece of software into a vehicle, ensuring that your products interface with modern automobiles, or determining the best method for licensing your products for use in today’s computers on wheels, our team includes attorneys with in-depth experience in information technology transactions ready to advise clients on the intellectual property and licensing issues that frequently occur in today’s automotive industry.

Autonomous Vehicle Data: Ownership, Profit, Privacy

The age of “Big Data” is dawning for every type of business, driven by the proliferation of mobile devices and networked sensors, shrinking costs of data storage, and growing market incentives to keep and analyze data to inform economic activity. In the automotive world, weather and road conditions, traffic congestion, parking availability, payment of tolls, and notification of maintenance and repair needs are just a few of the many nodes in the budding automotive data value chain. Newer models, moreover, whether driven by human or machine, connect with their environment using vehicle-to-vehicle (V2V), vehicle-to-infrastructure (V2I) and vehicle-to-devices or other points of inflection (V2X) communications. For the connected vehicle network to function properly and safely, data from individual cars must be collected, deciphered, stored, possibly anonymized and ultimately transmitted to other vehicles or roadside implements.

Companies in the automotive supply chain can profit from advances in data analytics in a number of ways: to facilitate maintenance and minimize warranty and recall costs; to improve logistics and production processes; and to make more informed product development and marketing decisions. Consumers, meanwhile, often resist the sharing of personal information, but at the same time recognize its value.  This means automotive industry participants must strike a balance between collecting and maintaining necessary and valuable information and respecting consumer concerns about privacy all while remaining compliant with relevant data privacy and security requirements.  We’re dedicated to helping our clients make informed decisions about big data collection, and the ownership, use, privacy, and security concerns that it inevitably implies.

Cybersecurity

Organizations encounter privacy and data security law issues in most aspects of their operations, from human resources to marketing and customer service.  Every day, organizations collect information about employees, customers, potential customers and business partners, which data is subject to increasingly more stringent privacy requirements by federal and state law, as well as by contract.  As automobiles begin to literally interact with the environment around them, and collect more data than ever before, issues of privacy and cybersecurity will become paramount.

With a myriad of reasons to maintain data about the “users” of their products, participants in the automotive industry bear the responsibility of remaining up to date on the most recent privacy and cybersecurity requirements.  This challenge should be top of mind given the potentially significant liability in the event of a data breach.  Whether looking to keep up to speed on the most recent developments in cybersecurity and privacy requirements or considering how to respond in the event of a data breach, our attorneys are prepared to provide practical business advice on ways to manage cybersecurity risk and maintain compliance with current industry requirements.

Augmented Reality & Virtual Reality

Digital data is being liberated from the two-dimensional screen. The displays that aid drivers in navigation, manufacturers in design, and servicers in performing repairs can now be superimposed on the physical world by means of mobile devices and smart eyewear. This revolutionary new method of interacting with digital displays empowers workers and holds the potential to make driving safer. Self-contained virtual reality displays are also being used both in the design lab and the dealer showroom to build, test, and sell vehicles. As with any new technology, however, the emerging media of AR/VR carry with them new risks and challenges, including driver distraction, product liability, invasion of privacy, deceptive advertising, and more. Our team includes world-renowned experts on AR/VR technologies and the legal issues they raise.

Ethics

Isaac Asimov’s three rules of robotics fail to capture the complexity of ethical issues that arise with autonomous vehicles.  At a minimum, collision avoidance systems need to take into account some sort of ethical framework.  An autonomous vehicle that is totally unbiased in the lives that it saves ends by forcing a manufacturer to take a position by default.  But, the ethical considerations extend even further.  Because of the vast amounts of data an autonomous vehicle collects on its own drivers, a company needs to consider what ethical obligations it has toward that driver.  Under what set of circumstances can a company share driver data with third parties, including insurance companies or law enforcement?  This problem multiplies considerably when autonomous vehicles begin collecting and using data on other cars and their drivers.  The trolley car problems are legion in the autonomous vehicle domain.  Our attorneys can assist you in thinking through these issues, establishing an ethical framework, and ensuring that your ethical obligations do not run afoul of your legal obligations.