Federal Register / Vol. 86, No. 27 / Thursday, February 11, 2021 / Rules and Regulations 9003 

1Public Law 115–264, 132 Stat. 3676 (2018). 

2 84 FR 32274 (July 8, 2019). 

3 17 U.S.C. 115(d)(3)(C)(i)(V). 

4 Id. at 115(d)(3)(C)(i)(IV). 

5 Id. at 115(d)(5)(B); 84 FR 32274 (July 8, 2019); 

see also 17 U.S.C. 115(d)(3)(D)(i)(IV), (d)(5)(C). 

6 17 U.S.C. 115(d)(12)(C). 

7 Id. at 115(d)(3)(M)(i) (‘‘The mechanical licensing 

collective shall ensure that all material records . . . 

are preserved and maintained in a secure and 

reliable manner, with appropriate commercially 

reasonable safeguards against unauthorized access, 

copying, and disclosure, and subject to the 

confidentiality requirements prescribed by the 

Register of Copyrights under paragraph (12)(C) for 

a period of not less than 7 years after the date of 

creation or receipt, whichever occurs later.’’). 

8 Id. at 115(d)(3)(J)(i)(II)(bb). 

9 Id. at 115(d)(6)(B)(ii). 

10 Id. at 115(d)(11)(C)(iii). 

11 Id. at 115(d)(3)(L)(i)(II). 

12 Id. at 115(d)(4)(D)(i)(II). 

13H.R. Rep. No. 115–651, at 5–6 (2018); S. Rep. 

No. 115–339, at 5 (2018); Report and Section-bySection Analysis of H.R. 1551 by the Chairmen and 

Ranking Members of Senate and House Judiciary 

Committees, at 4 (2018), https://www.copyright.gov/ 

legislation/mma_conference_report.pdf (‘‘Conf. 

Rep.’’). 

14 17 U.S.C. 115(d)(12)(A). 

15H.R. Rep. No. 115–651, at 5–6, 14; S. Rep. No. 

115–339, at 5, 15; Conf. Rep. at 4, 12. The 

Conference Report further contemplates that the 

Office’s review will be important because the MLC 

must operate in a manner that can gain the trust of 

the entire music community, but can only be held 

liable under a standard of gross negligence when 

carrying out certain of the policies and procedures 

adopted by its board. Conf. Rep. at 4. 

16 17 U.S.C. 115(d)(3)(D)(ix)(I)(aa). 

17H.R. Rep. No. 115–651, at 5–6, 14; S. Rep. No. 

115–339, at 5, 15; Conf. Rep. at 4, 12. 

may be appropriate to make other 

incremental changes going forward, it is 

important that we affirm the established 

regulatory program for SEFs to maintain 

these benefits and facilitate further expansion 

of this framework. 

I thank the staff of the Division of Market 

Oversight for their work on these two rules 

and their helpful engagement with my office. 

[FR Doc. 2020–28943 Filed 2–10–21; 8:45 am] 

BILLING CODE 6351–01–P 

LIBRARY OF CONGRESS 

Copyright Office 

37 CFR Part 210 

[Docket No. 2020–7] 

Treatment of Confidential Information 

by the Mechanical Licensing Collective 

and the Digital Licensee Coordinator 

AGENCY: U.S. Copyright Office, Library 

of Congress. 

ACTION: Interim rule. 

SUMMARY: The U.S. Copyright Office is 

issuing an interim rule regarding the 

protection of confidential information 

by the mechanical licensing collective 

and the digital licensee coordinator 

under title I of the Orrin G. Hatch-Bob 

Goodlatte Music Modernization Act. 

After soliciting public comments 

through a notification of inquiry and a 

notice of proposed rulemaking, the 

Office is now issuing interim 

regulations identifying appropriate 

procedures to ensure that confidential, 

private, proprietary, or privileged 

information contained in the records of 

the mechanical licensing collective and 

the digital licensee coordinator is not 

improperly disclosed or used. 

DATES: Effective March 15, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Regan A. Smith, General Counsel and 

Associate Register of Copyrights, by 

email at regans@copyright.gov or Anna 

B. Chauvet, Associate General Counsel, 

by email at achau@copyright.gov. Each 

can be contacted by telephone at (202) 

707–8350. 

SUPPLEMENTARY INFORMATION: 

I. Background 

On October 11, 2018, the president 

signed into law the Orrin G. Hatch–Bob 

Goodlatte Music Modernization Act 

(‘‘MMA’’) which, among other things, 

substantially modifies the compulsory 

‘‘mechanical’’ license for making and 

distributing phonorecords of 

nondramatic musical works under 17 

U.S.C. 115.1 It does so by switching 

from a song-by-song licensing system to 

a blanket licensing regime administered 

by a mechanical licensing collective 

(‘‘MLC’’), which became available on 

January 1, 2021 (the ‘‘license availability 

date’’). In July 2019, the Copyright 

Office (the ‘‘Office’’) designated an 

entity to serve as the MLC, as required 

by the MMA.2 Among other things, the 

MLC is responsible for collecting and 

distributing royalties under the blanket 

license, engaging in efforts to identify 

musical works embodied in particular 

sound recordings and to identify and 

locate the copyright owners of such 

musical works, and administering a 

process by which copyright owners can 

claim ownership of musical works (or 

shares of such works).3 It also must 

‘‘maintain the musical works database 

and other information relevant to the 

administration of licensing activities 

under [section 115].’’ 4 The Office has 

also designated a digital licensee 

coordinator (‘‘DLC’’) to represent 

licensees in proceedings before the 

Copyright Royalty Judges (‘‘CRJs’’) and 

the Office, to serve as a non-voting 

member of the MLC, and to carry out 

other functions.5

A. Regulatory Authority Granted to the 

Office 

The MMA specifically directs the 

Office to ‘‘adopt regulations to provide 

for the appropriate procedures to ensure 

that confidential, private, proprietary, or 

privileged information contained in the 

records of the mechanical licensing 

collective and digital licensee 

coordinator is not improperly disclosed 

or used, including through any 

disclosure or use by the board of 

directors or personnel of either entity, 

and specifically including the 

unclaimed royalties oversight 

committee and the dispute resolution 

committee of the mechanical licensing 

collective.’’ 6 The MMA additionally 

makes several explicit references to the 

Office’s regulations governing the 

treatment of confidential and other 

sensitive information, including with 

respect to: (1) ‘‘all material records of 

the operations of the [MLC]’’; 7 (2) steps 

the MLC must take to ‘‘safeguard the 

confidentiality and security of usage, 

financial, and other sensitive data used 

to compute market shares’’ when 

distributing unclaimed accrued 

royalties; 8 (3) steps the MLC and DLC 

must take to ‘‘safeguard the 

confidentiality and security of financial 

and other sensitive data shared’’ by the 

MLC with the DLC about significant 

nonblanket licensees; 9 (4) voluntary 

licenses administered by the MLC; 10 (5) 

examination of the MLC’s ‘‘books, 

records, and data’’ pursuant to audits by 

copyright owners; 11 and (6) 

examination of digital music providers’ 

‘‘books, records, and data’’ pursuant to 

audits by the MLC.12

Beyond these specific directives, 

Congress invested the Office with 

‘‘broad regulatory authority’’ 13 to 

‘‘conduct such proceedings and adopt 

such regulations as may be necessary or 

appropriate to effectuate the provisions 

of [the MMA pertaining to the blanket 

license].’’ 14 The legislative history 

contemplates that the Office will 

‘‘thoroughly review[ ]’’ 15 policies and 

procedures established by the MLC and 

its three committees, which the MLC is 

statutorily bound to ensure are 

‘‘transparent and accountable,’’ 16 and 

promulgate regulations that ‘‘balance[ ] 

the need to protect the public’s interest 

with the need to let the new collective 

operate without over-regulation.’’ 17

Congress acknowledged that 

‘‘[a]lthough the legislation provides 

specific criteria for the collective to 

operate, it is to be expected that 

situations will arise that were not 

contemplated by the legislation,’’ and 

that ‘‘[t]he Office is expected to use its 

best judgement in determining the 


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18H.R. Rep. No. 115–651, at 14; S. Rep. No. 115– 

339, at 15; Conf. Rep. at 12. 

19H.R. Rep. No. 115–651, at 14; S. Rep. No. 115– 

339, at 15; Conf. Rep. at 12. 

20 84 FR at 32280. 

21 84 FR 49966, 49973 (Sept. 24, 2019). All 

rulemaking activity, including public comments, as 

well as educational material regarding the Music 

Modernization Act, can currently be accessed via 

navigation from https://www.copyright.gov/musicmodernization/. Specifically, comments received in 

response to the NOI are available at https://

beta.regulations.gov/document/COLC-2019-0002- 

0001 and comments received in response to the 

notice of proposed rulemaking are available at 

https://beta.regulations.gov/document/COLC-2020- 

0004-0001. Guidelines for ex parte 

communications, along with records of such 

communications, are available at https://

www.copyright.gov/rulemaking/mmaimplementation/ex-parte-communications.html. 

References to these comments are by party name 

(abbreviated where appropriate), followed by 

‘‘Initial NOI Comment,’’ ‘‘Reply NOI Comment,’’ 

‘‘NPRM Comment,’’ ‘‘Letter,’’ or ‘‘Ex Parte Letter,’’ 

as appropriate. 

22See MLC Initial NOI Comment at 29–30, App. 

H. 

23 DLC Reply NOI Comment at 27. 24See id. at 28. 25 85 FR 22559 (Apr. 22, 2020). 26 Id. at 22561 (quoting DLC Initial NOI Comment 

at 3). 27 DLC NPRM Comment at 1. 28MLC NPRM Comment at 2. 29Castle NPRM Comment at 1. 

30See, e.g., 17 U.S.C. 115(d)(3)(E), (e)(20); id. at 

115(d)(3)(E)(v) (stating the database must ‘‘be made 

available to members of the public in a searchable, 

online format, free of charge’’); 164 Cong. Rec. S501, 

504 (daily ed. Jan. 24, 2018) (statement of Sen. Chris 

Coons) (‘‘This important piece of legislation will 

bring much-needed transparency and efficiency to 

the music marketplace.’’). 

31See 37 CFR 210.31, 210.32, 210.33; DLC Ex 

Parte Letter Feb. 24, 2020 (‘‘DLC Ex Parte Letter 

#2’’) at 5 (acknowledging that the ‘‘MLC will be 

under certain legal transparency requirements,’’ and 

that confidentiality regulations should ‘‘not stand in 

the way of that transparency’’); The International 

Confederation of Societies of Authors and 

Composers (‘‘CISAC’’) & The International 

Organisation representing Mechanical Rights 

Societies (‘‘BIEM’’) Reply NOI Comment at 2 

(stating that ‘‘musical works information populated 

in the database can include confidential, personal 

and/or sensitive data, and as such, the Regulations 

should ensure the required balance between the 

public interest in having transparent access to such 

information and the protection of commercially 

sensitive information and personal data’’). 

appropriate steps in those situations.’’ 18

Legislative history further states that 

‘‘[t]he Copyright Office has the 

knowledge and expertise regarding 

music licensing through its past 

rulemakings and recent assistance to the 

Committee[s] during the drafting of this 

legislation.’’ 19 Accordingly, in 

designating the MLC as the entity to 

administer the section 115 license, the 

Office stated that it ‘‘expects ongoing 

regulatory and other implementation 

efforts to . . . extenuate the risk of selfinterest,’’ and that ‘‘the Register intends 

to exercise her oversight role as it 

pertains to matters of governance.’’ 20

B. Rulemaking Background 

On September 24, 2019, the Office 

issued a notification of inquiry (‘‘NOI’’) 

seeking, among other things, public 

input on any issues that should be 

considered regarding the treatment of 

confidential and other sensitive 

information under the blanket license 

regime.21 In response, the Office 

received suggested regulatory language 

from both the DLC and the MLC, and a 

few comments about confidentiality 

more generally from other stakeholders. 

The MLC’s approach generally proposed 

requiring the MLC and the DLC to 

implement confidentiality policies to 

prevent improper or unauthorized use 

of various categories of confidential 

information, but lacked specific 

requirements for those policies or a 

proposed definition of ‘‘confidential 

information.’’ 22 By contrast, the DLC 

contended that the MLC’s proposal, by 

investing the MLC and DLC with broad 

discretion to implement policies 

regarding confidentiality, ‘‘would 

inappropriately redelegate that authority 

[granted to the Register] to itself and 

DLC.’’ 23 The DLC maintained that the 

Office’s regulations should provide 

necessary guidance, not merely give the 

MLC and DLC discretion to create their 

own policies.24

On April 22, 2020, the Office issued 

a notice of proposed rulemaking 

(‘‘NPRM’’) regarding the treatment of 

confidential and other sensitive 

information under the blanket license 

regime, and solicited public comments 

on the proposed rule, including 

comments about the use of 

confidentiality designations and 

nondisclosure agreements.25 Overall, 

the Office proposed to adopt specific 

confidentiality regulations in order to 

assure those providing confidential and 

commercially sensitive information to 

the MLC that this information will be 

protected, as well as ‘‘provide the 

ground rules for the relationship 

between DLC, the MLC, and its 

respective members.’’ 26 In response to 

the proposed rule, the DLC found its 

‘‘basic framework’’ to be ‘‘sound.’’ 27

The MLC noted that ‘‘it is critical that 

confidential information be maintained 

with appropriate safeguards,’’ and 

offered proposed adjustments to certain 

provisions.28 Another commenter 

expressed appreciation for the Office’s 

approach ‘‘in distinguishing what is 

commonly thought of as generic 

‘confidential information’ and what 

ought to be confidential information for 

the DLC, [t]he MLC, their respective 

vendors and in particular the MLC’s 

three Statutory Committees.’’ 29

Having carefully considered the 

comments and other record materials in 

this proceeding, the Office is now 

issuing an interim rule. The Office has 

determined that it is prudent to 

promulgate this rule on an interim basis 

in order to retain added flexibility for 

responding to unforeseen 

circumstances. In some cases, the Office 

has adopted certain provisions in light 

of conflicting approaches suggested by 

various stakeholders. At times, the 

Office has opted for the more 

conservative approach to new issues 

presented in this rulemaking to ward 

against inappropriate disclosure or use 

of sensitive business information in the 

first instance, concluding that 

subsequent adjustment of an overly 

cautious rule is preferable to later 

addressing types of information that 

have already been shared. The Office 

will consider modifications as needed 

in response to new evidence, unforeseen 

issues, or where something is otherwise 

not functioning as intended as the MLC 

starts receiving confidential information 

from digital music providers and 

copyright owners for purposes of 

administering the section 115 license. 

In issuing this interim rule, the Office 

is mindful of Congress’s overall goals for 

the MMA to enhance transparency, 

accountability, and public access to 

musical work ownership information.30

The Office thus intends for its interim 

confidentiality rule to complement 

separate regulations regarding 

transparency, accountability, and public 

accessibility, which were adopted to 

prescribe the categories of information 

to be included in the public musical 

works database and rules related to the 

usability, interoperability, and usage 

restrictions of the database, as well as 

require the MLC to disclose certain 

categories of information in its 

statutorily-required annual reports and 

one-time written public update in 

December 2021 regarding its 

operations.31

II. Interim Rule 

The interim rule adopts certain 

provisions of the proposed rule and 

makes a number of adjustments in 

response to public comments regarding 

the definition of ‘‘confidential 

information’’ and the use and disclosure 

of such information. 

Because the MMA does not define the 

term ‘‘confidential,’’ the interim rule 

defines ‘‘confidential information’’— 

both by what it is and what it is not. The 

definition of ‘‘confidential information’’ 

is adjusted to mean sensitive financial 

or business information disclosed by 

DMPs, significant non-blanket licensees, 

or copyright owners (or any of their 

authorized agents or vendors) to the 


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32 In a parallel rulemaking regarding notices of 

license, notices of nonblanket activity, and reports 

of usage and payment, the Office expressed an 

intention to adjust those regulations to directly 

reference the Office’s confidentiality regulations 

once they had taken effect. 85 FR 58114, 58140 

n.365 (Sept. 17, 2020). The Office has now 

determined that such adjustment is not necessary. 

33See 17 U.S.C. 115(d)(12)(C), (e). 

34 85 FR at 22562. 

35 17 U.S.C. 115(d)(3)(J)(i)(II)(bb); see H.R. Rep. 

No. 115–651, at 27 (‘‘Unclaimed royalties are to be 

distributed based upon market share data that is 

confidentially provided to the collective by 

copyright owners.’’); S. Rep. No. 115–339, at 24 

(same); Conf. Rep. at 20 (same). CISAC & BIEM 

contend that creators’ percentage share should not 

be made publicly accessible in the database. CISAC 

& BIEM NPRM Comment at 2. The statute, however, 

contemplates such information being made publicly 

available in the database. 17 U.S.C. 115(d)(3)(E)(ii)– 

(iii). 

36 17 U.S.C. 115(d)(6)(B)(ii). 

37 Id. at 115(d)(11)(C)(iii). Music Artists Coalition 

(‘‘MAC’’) contends that ‘‘data relating to market 

share determinations and voluntary licenses’’ 

should be publicly shared. MAC Reply NOI 

Comment at 2–3. The statute, however, specifically 

contemplates such information being treated as 

confidential information. Id. at 115(d)(3)(J)(i)(II)(bb), 

(d)(11)(C)(iii). 

38 85 FR at 22562. 

MLC or DLC, as opposed to information 

provided to the MLC and DLC more 

generally (e.g., supply contracts). The 

definition is also adjusted to generally 

refer to ‘‘information’’ (as opposed to 

‘‘documents and information’’) to clarify 

that a document containing both 

confidential and non-confidential 

information should be extended 

protection, though the rule retains 

provisions identifying specific 

documents that the Office’s regulations 

require to be disclosed (e.g., notices of 

license) to clarify that they are not 

subject to the interim rule’s restrictions 

on disclosure and use. As proposed by 

the MLC, ‘‘confidential information’’ 

does not include any top-level 

compilation data presented in 

anonymized format that does not allow 

identification of such data as belonging 

to any particular digital music provider, 

significant nonblanket licensee, or 

copyright owner. At the DLC’s 

suggestion, the rule creates categories of 

‘‘MLC Internal Information’’ and ‘‘DLC 

Internal Information,’’ to separately 

address the use and disclosure of 

sensitive financial or business 

information about the MLC’s and DLC’s 

internal operations (as opposed to 

confidential information disclosed to 

the MLC and DLC by third parties). 

The interim rule creates various 

restrictions on the disclosure and use of 

confidential information by the MLC 

and DLC, as well as their employees, 

agents, consultants, vendors, and 

independent contractors, and members 

of their boards of directors and 

committees. In response to concerns 

about competitive harm that could 

result from the improper disclosure of 

confidential information from DMPs 

and copyright owners, the interim rule 

states that the MLC and DLC must limit 

disclosure of confidential information to 

their employees, agents, consultants, 

vendors, and independent contractors 

who are engaged in the entities’ 

respective authorized functions and 

who require access to confidential 

information for the purpose of 

performing their duties during the 

ordinary course of their work. The MLC 

and DLC are prohibited from disclosing 

confidential information to members of 

their boards of directors and 

committees, and from using confidential 

information for any purpose other than 

their authorized functions under section 

115. Consistent with the proposed rule, 

the MLC and DLC may disclose 

confidential information to qualified 

auditors or outside counsel under the 

statutorily-permitted audits, and to the 

Office, Copyright Royalty Board, and 

federal courts, or when such disclosure 

is required by court order or subpoena, 

subject to an appropriate protective 

order. Notwithstanding any restrictions, 

the rule states that the MLC may fulfill 

its disclosure obligations under section 

115 (e.g., delivering royalty statements 

to copyright owners or communicating 

with the DLC). In keeping with the 

Office’s preexisting rule governing 

comparable royalty statement reporting 

requirements under the song-by-song 

section 115 license, the interim rule 

does not place any confidentiality 

restrictions on copyright owners once 

they receive royalty statements from the 

MLC. The rule clarifies, however, that 

royalty statements to copyright owners 

should not include confidential 

information that does not relate to the 

recipient copyright owner or relevant 

songwriter in addition to the minimum 

information required by the Office’s 

regulations. 

Because ‘‘MLC Internal Information’’ 

and ‘‘DLC Internal Information’’ do not 

relate to sensitive business information 

disclosed by DMPs, significant 

nonblanket licensees, or copyright 

owners, the rule does not impose strict 

disclosure requirements as it does with 

‘‘confidential information.’’ Instead, it 

creates categories of individuals to 

whom the MLC and DLC may disclose 

‘‘MLC Internal Information’’ and/or 

‘‘DLC Internal Information’’ (subject to a 

confidentiality agreement), giving the 

MLC and DLC some flexibility if they 

decide additional disclosure is 

necessary. For example, the interim rule 

states that the MLC may disclose MLC 

Internal Information to members of the 

MLC’s board of directors and 

committees, including representatives of 

the DLC who serve on the board or 

committees. Should the MLC decide to 

disclose MLC Internal Information to a 

contractor, the rule does not prohibit the 

MLC from doing so; it states that the 

MLC may disclose MLC Internal 

Information to other individuals in its 

discretion, subject to the adoption of 

reasonable confidentiality policies. The 

rule contains a parallel provision for the 

DLC and DLC Internal Information. It 

also permits representatives of the DLC 

who serve on the MLC’s board of 

directors or committees and who receive 

MLC Internal Information to share such 

information (subject to a confidentiality 

agreement) with employees, agents, 

consultants, vendors, and independent 

contractors of the DLC who require 

access to MLC Internal Information for 

the purpose of performing their duties.32

These issues are discussed in turn 

below. 

A. Defining ‘‘Confidential Information’’ 

1. ‘‘Confidential Information’’ as 

Defined Under the Proposed Rule 

The MMA does not define the term 

‘‘confidential.’’ 33 The proposed rule 

defined ‘‘confidential information’’ as 

including ‘‘sensitive financial or 

business information, including 

information relating to financial or 

business terms that could be used for 

commercial advantage’’ and ‘‘trade 

secrets,’’ and enumerated categories of 

information and documents expressly 

intended by the statute to be covered by 

the Office’s regulations governing the 

treatment of confidential and other 

sensitive information,34 including with 

respect to‘‘the confidentiality and 

security of usage, financial, and other 

sensitive data used to compute market 

shares,’’ 35 ‘‘financial and other sensitive 

data shared’’ by the MLC to the DLC 

about significant nonblanket 

licensees,36 and voluntary licenses.37

The proposed rule also defined 

‘‘confidential information’’ as including 

‘‘sensitive personal information, 

including but not limited to, an 

individual’s Social Security number, 

taxpayer identification number, 

financial account number(s), or date of 

birth (other than year).’’ 38

As these are potentially broad 

categories, the proposed rule also 

refined the definition of ‘‘confidential 

information’’ by excluding information 

that is not confidential. Borrowing from 

current regulations governing 

SoundExchange in connection with the 

section 114 license, and as 

recommended by the DLC, the proposed 


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39 Id.; DLC Reply Add. at A–20. 

40 85 FR at 22562. 

41Consistent with the Office’s then-proposed rule 

regarding notices of license, the definition of 

confidentiality excluded any addendum to general 

notices of license that provides a description of any 

applicable voluntary license or individual 

download license the digital music provider is, or 

expects to be, operating under concurrently with 

the blanket license that is sufficient for the 

mechanical licensing collective to fulfill its 

obligations under 17 U.S.C. 115(d)(3)(G)(i)(I)(bb). 85 

FR at 22567; see 85 FR 22518 (Apr. 22, 2020). 

42 85 FR at 22562. 

43 Id.; see MLC Initial NOI Comment at 30 

(proposing that ‘‘the MLC, when providing 

necessary data to its board or committee Members, 

will only share proprietary or confidential data as 

necessary, and in a format that is anonymized and 

cannot be identified as belonging to any particular 

copyright owner, in order to prevent any disclosure 

to potential competitors’’); MLC Reply NOI 

Comment App. at 27. 

44 85 FR at 22562. 

45 DLC NPRM Comment at 5, Add. A–1. 

46 Id. at 4. 

47 Id. 

48 Id. 

49 Id. at 5. 

50 Id. 

51SONA NPRM Comment at 4 (‘‘[R]oyalty 

recipients need to be able to use and share royalty 

information with attorneys, financial advisors, and 

others in order to carry on their business affairs.’’); 

see MLC NPRM Comment at 3 (‘‘[T]he Proposed 

Regulation on confidentiality should be modified to 

expressly state that information required to be 

reported by the MLC to copyright owners in . . . 

statements [of account] is not confidential 

information.’’); NMPA NPRM Comment at 5 (‘‘[T]he 

Office should revise the proposed rule to make clear 

that royalty pool information reported by DMPs to 

the MLC shall not be subject to confidentiality 

restrictions so that the MLC may report that 

information to copyright owners, and so that the 

copyright owners themselves shall not be burdened 

by restrictions on their use of such information, as 

is the current practice.’’). See also FMC NPRM 

Comment at 1; Alliance for Recorded Music 

(‘‘ARM’’) NPRM Comment at 2 n.1 (both in general 

accord). One commenter suggests that the MLC 

should publicly post ‘‘the basic elements of these 

rate sheets.’’ Castle NPRM Comment at 12. In a 

parallel rulemaking, the Office issued interim 

regulations setting forth the information that the 

MLC is required to report in statements to copyright 

owners. See 37 CFR 210.29. 

52MLC NPRM Comment at 8; see MLC NPRM 

Comment at 7, U.S. Copyright Office Dkt. No. 2020– 

6, available at https://beta.regulations.gov/docket/ 

COLC-2020-0003 (‘‘[T]he proposed regulation being 

addressed in the Confidentiality Proceeding should 

be revised to provide that information required to 

be included in royalty statements does not fall 

under the definition of Confidential Information.’’). 

53MLC NPRM Comment App. at ii. 

54 Id. at iv. 

rule stated that ‘‘confidential 

information’’ excludes ‘‘documents or 

information that may be made public by 

law’’ or ‘‘that at the time of delivery to 

the [MLC] or [DLC] is public 

knowledge,’’ and that ‘‘[t]he party 

seeking information from the [MLC] or 

[DLC] based on a claim that the 

information sought is a matter of public 

knowledge shall have the burden of 

proving that fact.’’ 39 Because 

documents and information may be 

subsequently disclosed by the party to 

whom the information would otherwise 

be considered confidential, or by the 

MLC or DLC pursuant to participation 

in proceedings before the Office or 

Copyright Royalty Judges (including 

proceedings to redesignate the MLC or 

DLC), the proposed rule also excluded 

such information and documents from 

the definition of ‘‘confidential 

information.’’ 40

Recognizing that important 

restrictions on the disclosure of 

information are cabined by equally 

significant countervailing 

considerations of transparency in 

reporting certain types of information, 

the proposed rule also excluded the 

following from the definition of 

‘‘confidential information’’: Information 

made publicly available through notices 

of license,41 notices of nonblanket 

activity, the MLC’s online database, and 

information disclosable through the 

MLC bylaws, annual report, audit 

report, or the MLC’s adherence to 

transparency and accountability with 

respect to the collective’s policies or 

practices, including its anticommingling policy, pursuant to 17 

U.S.C. 115(d)(3)(D)(ii), (vii), and (ix).42

In addition, adopting a suggestion from 

the MLC, the proposed rule excluded 

from the meaning of ‘‘confidential 

information’’ any top-level compilation 

data presented in anonymized format 

that does not allow identification of 

such data as belonging to any digital 

music provider, significant nonblanket 

licensee, or copyright owner.43 Finally, 

the proposed rule clarified that 

documents or information created by a 

party will not be considered 

confidential with respect to usage of 

that information by the same party (e.g., 

documents created by the DLC should 

not be considered confidential with 

respect to the DLC).44

As discussed below, the interim rule 

adjusts the definition of ‘‘confidential 

information’’ based on public 

comments. 

2. Royalty Statements Provided to 

Musical Work Copyright Owners by the 

MLC 

The DLC contends that the definition 

of ‘‘confidential information’’ should 

expressly include ‘‘any sensitive data 

provided by digital music providers 

related to royalty calculations 

(including, but not limited to, service 

revenues, subscriber counts, and 

performing rights organization fee 

information).’’ 45 The DLC states that 

‘‘statements of account delivered to 

copyright owners contain highly 

sensitive information’’ such as ‘‘service 

revenues, subscriber counts, and 

amounts paid to performing rights 

organizations,’’ and ‘‘this information is 

competitively sensitive between digital 

music providers, in that it provides 

extremely granular detail about each 

digital music provider’s operations and 

performance.’’ 46 The DLC asserts that 

‘‘[i]f the Office places no restrictions on 

copyright owners’ use of the sensitive 

digital music provider information they 

receive from the MLC on statements of 

account, the Office will have failed to 

comply with [the] unambiguous 

congressional direction’’ to ensure that 

confidential, private, proprietary, or 

privileged information contained in the 

records of the mechanical licensing 

collective is not improperly disclosed or 

used.47 While recognizing that 

‘‘[c]opyright owners are entitled to 

know how their royalties have been 

calculated,’’ 48 the DLC proposes 

regulatory language that would require 

copyright owners’ access to be 

contingent upon ‘‘a written 

confidentiality agreement with the MLC 

that is enforceable by the licensee,’’ 49 as 

‘‘this sensitive data [should] be used 

only to provide transparency into how 

mechanical royalties have been 

calculated and paid,’’ and not ‘‘for 

other, unrelated purposes.’’ 50

By contrast, the MLC, the National 

Music Publishers’ Association 

(‘‘NMPA’’), the Songwriters of North 

America (‘‘SONA’’), and the Future of 

Music Coalition (‘‘FMC’’) maintain that 

receipt of statements of account should 

not impose confidentiality restrictions 

on copyright owners, with SONA 

‘‘seek[ing] to ensure that the final 

confidentiality rule . . . does not 

become a basis to withhold records from 

copyright owners, self-published 

songwriters, and their authorized 

representatives.’’ 51 Likewise, the MLC 

expressed concern that the proposed 

rule ‘‘leaves unclear the right of 

copyright owners to receive the royalty 

pool calculation information that they 

have always received in royalty 

statements.’’ 52 The MLC would exclude 

from the definition of ‘‘confidential 

information,’’ ‘‘[i]nformation concerning 

the calculation of the payable royalty 

pool and the per-work royalty allocation 

under part 385 to be reported in royalty 

statements to copyright owners under 

37 CFR 210.29(c)(1)(vi).’’ 53 The MLC 

also proposes that the ‘‘MLC and the 

DLC may disclose Confidential 

Information to’’ ‘‘[c]opyright owners, 

including their agents, whose works 

were used in covered activities, in 

connection with royalty payments and 

statements.’’ 54


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55 DLC NPRM at 4. 

56See, e.g., Press Release, Spotify Technology 

S.A., Shareholder Letter Q4 2020 (Feb. 3, 2021), 

https://s22.q4cdn.com/540910603/files/doc_

financials/2020/q4/Shareholder-Letter-Q4-2020_

FINAL.pdf; Spotify Technology S.A, Form 6–K 

Report of Foreign Private Issuer (2020) https://

s22.q4cdn.com/540910603/files/doc_financials/ 

2020/q3/69e72911-517a-47bb-ab3e1b1248654d1a.pdf. 

57 85 FR at 22561. 

58 Id.; 79 FR 56190, 56206 (Sept. 18, 2014); see 

SONA NPRM Comment at 3 (‘‘[S]trongly 

endors[ing] the Copyright Office’s rejection of any 

confidentiality restrictions on the use of royalty 

statements issued to copyright owners by the 

MLC.’’). The Office similarly declined to adopt the 

DLC’s proposal that copyright owners (and their 

designated agents) could receive confidential 

information, ‘‘so long as they sign an appropriate 

confidentiality agreement with the MLC.’’ 85 FR at 

22561; see DLC Ex Parte Letter #2 at 5; see DLC 

Reply NOI Comment at 28; 37 CFR 380.5(c)(3). 

59Similarly, the administrative record contains 

no indicia that direct, voluntary licensing typically 

include restrictions on the uses of information in 

royalty statements by copyright owners. 

60See 85 FR at 22561. 

61See 85 FR at 22529; 85 FR 58160, 58162 (Sept. 

17, 2020) (‘‘This information is provided to 

copyright owners under the song-by-song license. It 

will continue to be reported by DMPs to the MLC 

as part of their monthly reports of usage, and the 

MLC intends to pass along this information to 

copyright owner.’’). 

62 DLC NPRM at 4 (citing 17 U.S.C. 115(d)(12)(C)). 

63 37 CFR 210.29(c)(4)(v). 

64MLC NPRM Comment at 2; FMC NPRM 

Comment at 1. 

65MLC NPRM Comment at 2. 

While the Office appreciates that 

DMPs understandably want to ensure 

that sensitive business information 

provided to the MLC is not unlawfully 

or inappropriately disclosed or used, the 

definition of ‘‘confidential information’’ 

is already inclusive of information that 

is competitively sensitive as between 

digital music providers. Indeed, the DLC 

itself states that this information 

‘‘plainly falls within the definition of 

Confidential Information in the 

Proposed Rule.’’ 55 The Office believes 

that amending the language to define 

‘‘confidential information’’ as including 

‘‘any sensitive data provided by digital 

music providers related to royalty 

calculations’’ could be overly broad in 

light of various statutory transparency 

and disclosure obligations; the 

suggestion to include ‘‘subscriber 

counts’’ and ‘‘service revenues’’ may 

also overreach as some DMPs are public 

companies who already disclose this 

information in financial statements.56

The Office previously declined to adopt 

the DLC’s proposed definition that 

included ‘‘all the usage and royalty 

information’’ reported by DMPs for this 

reason.57 Nonetheless, for clarity, the 

interim rule includes ‘‘sensitive data 

provided by digital music providers 

related to royalty calculations’’ in the 

enumeration of types of confidential 

information. As explained further 

below, however, the interim rule also 

separately addresses the DLC’s concerns 

by imposing restrictions on disclosure 

of these types of information to MLC 

board members and others involved 

with the operation of the mechanical 

license. 

With respect to disclosure of 

information provided in royalty 

statements to copyright owners 

specifically, prior to the MMA, the 

Office previously considered and 

rejected the suggestion to place 

confidentiality requirements on 

copyright owners receiving statements 

of account under the section 115 

statutory license due to the inclusion of 

‘‘competitively sensitive’’ information, 

determining instead that ‘‘once the 

statements of account have been 

delivered to the copyright owners, there 

should be no restrictions on the 

copyright owners’ ability to use the 

statements or disclose their contents.’’ 58

Royalty statements for the section 115 

license have been provided to copyright 

owners for years without the 

confidentiality restrictions now 

requested by the DLC. No commenters 

provided examples of past harm caused 

by the existing regulations failing to 

impose such restrictions.59 Given that 

an animating goal of the MMA is to 

facilitate increased transparency and 

accuracy in reporting payments to 

copyright owners, the Office reiterates 

that it sees no compelling reason to 

deviate from this established policy.60

Further supporting the Office’s 

conclusion that it should not depart 

from the status quo, the Office’s adopted 

royalty payment and accounting 

information reporting requirements 

similarly ‘‘essentially retain the current 

rule governing non-blanket section 115 

licenses.’’ 61 The Office is not persuaded 

by the DLC’s suggestion that the 

statutory directive to promulgate 

regulations to avoid information ‘‘in the 

records of the mechanical licensing 

collective’’ being ‘‘improperly disclosed 

or used’’ counsels differently.62 Royalty 

statements are records of, and designed 

to be provided to, recipient copyright 

owners, and the statute and legislative 

history do not suggest that maintaining 

status quo expectations with respect to 

copyright owners’ receipt of royalty 

information would fall under the 

category of improper use. 

Accordingly, the interim rule states 

that once a royalty statement has been 

delivered to a copyright owner, there are 

no restrictions on that copyright owner’s 

ability to use the statement or disclose 

its contents. The Office declines the 

MLC’s proposal to exclude from the 

definition of ‘‘confidential information,’’ 

‘‘[i]nformation concerning the 

calculation of the payable royalty pool 

and the per-work royalty allocation 

under part 385 to be reported in royalty 

statements to copyright owners under 

37 CFR 210.29(c)(1)(vi).’’ Instead, as 

discussed below, the rule states that the 

mechanical licensing collective shall be 

permitted to prepare and deliver royalty 

statements to musical work copyright 

owners (and the contents therein) in 

accordance with the Office’s regulations 

governing royalty statements, which 

require ‘‘[a] detailed and step-by-step 

accounting of the calculation of 

royalties under applicable provisions of 

part 385 of this title, sufficient to allow 

the copyright owner to assess the 

manner in which the royalty owed was 

determined and the accuracy of the 

royalty calculations, which shall 

include details on each of the 

components used in the calculation of 

the payable royalty pool.’’ 63 This 

language is meant to clarify that despite 

the rule’s general restrictions on 

disclosing confidential information, the 

MLC is not prevented from preparing 

and delivering royalty statements to 

copyright owners. The rule clarifies, 

however, that royalty statements to 

copyright owners should not include 

confidential information that does not 

relate to the recipient copyright owner 

or relevant songwriter in addition to the 

minimum information required by the 

Office’s regulations. As discussed more 

below, the Office believes the MLC’s 

proposed language that the MLC and 

DLC may disclose confidential 

information to ‘‘[c]opyright owners, 

including their agents, whose works 

were used in covered activities, in 

connection with royalty payments and 

statements’’ becomes unnecessary. 

3. Information Disclosed by Digital 

Music Providers, Copyright Owners, 

and Third Parties 

The MLC and FMC suggest that the 

proposed rule’s definition of 

‘‘confidential information’’ is too 

broad.64 Specifically, the MLC contends 

the definition ‘‘is not limited to 

information exchanged in connection 

with the MLC’s royalty processing 

functions, and thus on its face could be 

read to regulate every aspect of the 

MLC’s and DLC’s businesses.’’ 65 The 

MLC maintains that instead, the 

‘‘definition should be limited to 

information disclosed by DMPs, 

copyright owners, the MLC, or the DLC, 

and that relate to the MLC’s statutory 

functions, so that it does not 

inadvertently sweep into its ambit 


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66 Id. 67FMC NPRM Comment at 1. 68ARM NPRM Comment at 4; see id. at 12–14. 69MLC NPRM Comment at 20 (‘‘[C]onfidential 

information for particular sound recording licensors 

shall not be disclosed to copyright owners, 

songwriters or digital music providers.’’). 

70 85 FR at 22562; MLC Initial NOI Comment at 

30; MLC Reply NOI Comment App. at 27. 

71MLC NPRM Comment App. at ii; DLC NPRM 

Comment Add. at A–2. 

72 85 FR at 22567; see MLC NPRM Comment at 

8 (stating that the phrase ‘‘information submitted by 

a third party that is reasonably designated as 

confidential by the party submitting the 

information’’ ‘‘can largely be integrated into this 

definition of Confidential Information’’); DLC 

NPRM Comment Add. at A–1; ARM NPRM 

Comment at 11. 

73MLC NPRM Comment App. at i–ii; DLC NPRM 

Comment Add. at A–1. 

74ARM NPRM Comment at 5. 

75 Id. at 4–5. 

76 Id. at 5. 

information that the MLC or DLC 

receives in connection with leasing 

office space or equipment, 

requisitioning supplies, or making other 

contractual arrangements.’’ 66 FMC 

asserts that ‘‘ ‘[f]inancial or business 

terms that could be used for commercial 

advantage’ is an inherently problematic 

category definition when some DSPs 

and some copyright owners have 

seemed eager to use every piece of 

available data for their commercial 

advantage, if they can think of a 

possible way to do so.’’ 67

The Office agrees that cabining 

‘‘confidential information’’ to include 

‘‘sensitive financial or business 

information’’ disclosed by digital music 

providers, significant non-blanket 

licensees, or copyright owners (or any of 

their authorized agents or vendors) to 

the mechanical licensing collective or 

digital licensee coordinator would help 

reasonably ensure that the Office’s 

regulations apply in relation to the 

administration of the section 115 

statutory license, as opposed to 

information provided to the MLC and 

DLC more generally (e.g., supply 

contracts). The interim rule accordingly 

adjusts the definition of ‘‘confidential 

information’’ to mean sensitive financial 

or business information disclosed by 

digital music providers, significant nonblanket licensees, and copyright owners 

(or any of their authorized agents or 

vendors) to the mechanical licensing 

collective or digital licensee 

coordinator. With respect to FMC’s 

position that the phrase ‘‘financial or 

business terms that could be used for 

competitive disadvantage or be used for 

commercial advantage’’ could apply to 

data generally—to even nonconfidential information—the Office 

notes that the phrase already modifies 

‘‘sensitive financial or business 

information’’ to exclude broader types 

of information, and is also limited by 

the enumeration of non-confidential 

information articulated above. 

ARM, while asserting that the 

proposed ‘‘general definition is 

appropriate,’’ asks that the definition 

specifically include ‘‘information such 

as royalty rates and other provisions of 

agreements between recorded music 

companies and digital service 

providers.’’ 68 The MLC supports ARM’s 

position.69 In recognition of the need to 

protect sensitive data in agreements 

between recorded music companies and 

DMPs, the interim rule amends the 

definition of ‘‘confidential information’’ 

to also mean sensitive data concerning 

agreements between sound recording 

companies and digital music providers. 

At the MLC’s suggestion, the 

proposed rule excluded from the 

definition of ‘‘confidential information,’’ 

top-level compilation data presented in 

anonymized format that does not allow 

identification of such data as belonging 

to any digital music provider, 

significant nonblanket licensee, or 

copyright owner.70 Both the MLC and 

DLC incorporated this language into 

their respective proposed regulatory 

language,71 and no commenters 

objected. Accordingly, the interim rule 

adopts this aspect of the proposed rule 

without modification. 

Commenters supported the definition 

of ‘‘confidential information’’ including 

‘‘information submitted by a third party 

that is reasonably designated as 

confidential by the party submitting the 

information,’’ as well as ‘‘usage data and 

other sensitive data used to compute 

market shares when distributing 

unclaimed accrued royalties, sensitive 

data shared between the MLC and DLC 

regarding any significant nonblanket 

licensee, and sensitive data concerning 

voluntary licenses or individual 

download licenses administered by and/ 

or disclosed to the MLC.’’ 72 In their 

respective proposals, the MLC and DLC 

retained the Office’s proposed 

provisions stating that ‘‘confidential 

information’’ does not include 

‘‘documents or information that are 

public or may be made public by law or 

regulation,’’ or ‘‘documents or 

information that may be made public by 

law or that at the time of delivery to the 

MLC or DLC is public knowledge.’’ 73 By 

contrast, ARM expresses concern with 

the phrase ‘‘information that may be 

made public by law,’’ saying it is 

‘‘unclear,’’ and that ‘‘[w]hen inserted in 

an exception to the general definition of 

Confidential Information, that phrase 

could be read to say that any 

information the disclosure of which is 

not otherwise prohibited by law is 

excluded from the definition of 

Confidential Information, meaning that 

information only qualifies as 

Confidential Information when its 

disclosure is otherwise prohibited by 

law.’’ 74 The Office believes the language 

is reasonably clear, and notes that the 

phrase ‘‘information that may be made 

public by law’’ is meant to cover 

information for which the Office’s own 

regulations require certain disclosures 

from DMPs and significant nonblanket 

licensees that would not be considered 

confidential. This intention is made 

clear by subsequent subparagraphs 

enumerating these categories. After 

carefully considering these comments, 

the interim rule retains these aspects of 

the proposed definition. 

Finally, ARM contends that because 

this rule focuses on the protection of 

information, ‘‘referring to documents 

uniquely in the exclusions from the 

definition of Confidential Information 

creates interpretive issues,’’ as 

documents ‘‘embody information’’ and 

‘‘a document that contains some 

Confidential Information should not be 

excluded from protection simply 

because it also includes some other 

information that is excluded from the 

definition of Confidential 

Information.’’ 75 ARM maintains that 

‘‘the exceptions should apply only to 

information, and not to some potentially 

broader category of documents.’’ 76 The 

Office agrees that the regulation intends 

to prevent the improper use or 

disclosure of confidential information. 

The Office also agrees that a document 

containing both confidential and nonconfidential information should be 

extended protection, and did not 

suggest otherwise when issuing the 

proposed rule. Rather, the proposed rule 

identified specific documents (e.g., 

notices of nonblanket activity) and 

sources of information (e.g., the public 

musical works database) for which the 

Office’s regulations require disclosure 

and to which confidentiality restrictions 

would not apply. 

Accordingly, the Office has adjusted 

the phrase ‘‘documents or information 

that are public or may be made public 

by law or regulation’’ to refer solely to 

‘‘information.’’ By focusing on 

‘‘information’’ as opposed to 

‘‘documents,’’ the rule clarifies that the 

MLC and DLC would be prohibited from 

disclosing documents containing 

‘‘confidential information’’ disclosed by 

digital music providers, significant nonblanket licensees, and copyright owners 

(or any of their authorized agents or 

vendors) or third parties that reasonably 

designate information as confidential— 


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77See ARM NPRM Comment at 6 n.7 (stating that 

restrictions on ‘‘confidential information of a third 

party (such as a recorded music company)’’ should 

not be lifted ‘‘merely because the MLC or DLC 

wrote down the third-party confidential 

information in a new document’’). 

78CISAC & BIEM Reply NOI Comment at 8 

(encouraging ‘‘the Office to adopt suitable 

regulations that aim to protect sensitive and/or 

private information from public disclosure’’); MAC 

Reply NOI Comment at 2–3 (noting that ‘‘certain 

information such as . . . personal addresses should 

obviously be kept out of public documents’’). 

79 85 FR at 22562. 

80SONA NPRM Comment at 3. 

81CISAC & BIEM NPRM Comment at 1. CISAC & 

BIEM also maintain that ‘‘[e]xisting regulations, 

such as the GDPR, can be used as a reference for 

the protection of personal data.’’ CISAC & BIEM 

NPRM Comment at 3. While the Office does not 

disagree that the MLC may used GDPR as a 

reference, the interim rule does not incorporate 

GDPR. As noted previously by the Office, the MLC 

has committed to establishing an information 

security management system that is certified with 

ISO/IEC 27001 and meets the EU General Data 

Protection Regulation requirements, and other 

applicable laws. 84 FR at 32290 (citing Proposal of 

Mechanical Licensing Collective, Inc. Submitted in 

Response to U.S. Copyright Office’s December 21, 

2018, Notice of Inquiry, at 50 (Mar. 21, 2019). The 

MLC has also expressed its ‘‘commit[ment] to 

maintaining robust security to protect confidential 

user data, and that it contractually requires vendors 

to maintain robust security to protect confidential 

information handled for the MLC.’’ MLC Ex Parte 

Letter Jan. 29, 2020 (‘‘MLC Ex Parte Letter #1’’) at 

4. 

82The MLC does not intend to include date of 

birth in the public musical works database. MLC 

NOI Comment at 16, U.S. Copyright Office Dkt. No. 

2020–8, available at https://beta.regulations.gov/ 

docket/COLC-2020-0006. In a parallel rulemaking, 

the Office issued regulations prohibiting the MLC 

from including data of birth in the database. See 37 

CFR 210.31(g). 

83 17 U.S.C. 115(d)(3)(E)(ii)(III). 

84 In a parallel rulemaking, the Office issued a 

proposed rule prohibiting the mechanical licensing 

collective from ‘‘includ[ing] in the public musical 

works database any individual’s Social Security 

Number (SSN), taxpayer identification number, 

financial account number(s), date of birth (DOB), or 

home address or personal email to the extent it is 

not musical work copyright owner contact 

information required under 17 U.S.C. 

115(d)(3)(E)(ii)(III).’’ 85 FR at 58189. 

85 85 FR at 22562. 

86 DLC NPRM Comment at 7. 

87 Id. 

88ARM NPRM Comment at 6; see 85 FR at 22568. 

89See MLC NPRM Comment App. at ii. 

90 85 FR at 22562. 

91ARM NPRM Comment at 6. 

even in cases where the MLC or DLC 

may have created the underlying 

documents.77 The Office is retaining, 

however, the provisions identifying 

specific documents that the Office’s 

regulations require to be disclosed (e.g., 

notices of license, the MLC’s annual 

report) to clarify that they do not 

embody confidential information, 

subject to any exceptions included in 

the relevant regulatory section (e.g., 

addendums to notices of license, to the 

extent they provide a description of any 

applicable voluntary license or 

individual download license the digital 

music provider is, or expects to be, 

operating under concurrently with the 

blanket license). 

4. Personal Information 

In response to stakeholder concern 

about the disclosure of sensitive 

personal information, particularly 

relating to copyright owner 

information,78 the proposed rule 

included in the definition of 

‘‘confidential information’’ ‘‘sensitive 

personal information, including but not 

limited to, an individual’s Social 

Security number, taxpayer identification 

number, financial account number(s), or 

date of birth (other than year).’’ 79 In 

response, SONA generally agrees with 

the proposed definition, but believes it 

‘‘should explicitly include other 

instances of ‘personal information,’ 

including home address and home 

phone number.’’ 80 CISAC & BIEM 

maintain that date of birth should be 

confidential, noting that ‘‘creators often 

wish to keep [it] confidential in order to 

protect their image.’’ 81

Having carefully considered these 

issues, the Office has adjusted the 

interim rule to include birth year in the 

definition of confidential information.82

Because the statute requires the musical 

works database to make contact 

information for musical work copyright 

owners for matched works publicly 

available,83 the interim rule includes 

‘‘home address or personal email’’ in the 

definition of ‘‘confidential information’’ 

to the extent they are ‘‘not musical work 

copyright owner contact information as 

required under 17 U.S.C. 

115(d)(3)(E)(ii)(III).’’ 84

5. Information Made Publicly Available 

to the Office or Copyright Royalty 

Judges 

Under the proposed rule, 

‘‘confidential information’’ excluded 

information made publicly available by 

the MLC or DLC pursuant to 

participation in proceedings before the 

Office or Copyright Royalty Judges 

(including proceedings to redesignate 

the MLC or DLC).85 In response, the 

DLC states that ‘‘if this provision is 

meant to only cover material that the 

DLC and MLC have voluntarily (and 

with appropriate authority) filed in a 

CRB or Copyright Office docket publicly 

and without any restrictions, the 

provision is unnecessary, because by 

definition such material is not 

confidential.’’ 86 The DLC also contends 

that the reference ‘‘will lead to 

considerable confusion,’’ as ‘‘[f]ilings in 

CRB proceedings are governed by 

comprehensive protective orders, and 

those orders should determine whether 

material is or is not confidential.’’ 87

ARM similarly asserts that this specific 

reference to Office and Copyright 

Royalty Board proceedings should be 

removed in the definition of 

‘‘confidential information,’’ as ‘‘[t]he 

MLC and DLC should not have the 

power to make other entities’ 

confidential information nonconfidential by disclosing it publicly in 

a proceeding,’’ and that rather that an 

exception to the definition of 

‘‘confidential information,’’ ‘‘it would 

be more consistent with protection of 

third-party confidential information 

. . . to treat disclosure in proceedings’’ 

through the proposed rule’s provision 

stating that the MLC and DLC may 

disclose confidential information to 

‘‘[a]ttorneys and other authorized agents 

of parties to proceedings before federal 

courts, the Copyright Office, or the 

Copyright Royalty Judges, or when such 

disclosure is required by court order or 

subpoena, subject to an appropriate 

protective order or agreement.’’ 88 For its 

part, the MLC does not object to 

including this provision.89

After consideration, the Office has 

adjusted this aspect of the proposed rule 

by eliminating the reference to 

‘‘information made publicly available by 

the mechanical licensing collective or 

digital licensee coordinator pursuant to 

participation in proceedings before the 

Office or Copyright Royalty Judges.’’ 

The Office agrees that this specific 

reference is not necessary because 

information is no longer confidential 

once it has been publicly disclosed 

voluntarily and without any restrictions 

(and with appropriate authority). The 

Office retains the provision that 

excludes ‘‘information that is public’’ 

from the definition of ‘‘confidential 

information’’ so as to cover authorized 

public filings by the MLC or DLC with 

the Office or Copyright Royalty Board. 

6. Confidentiality as to a Party’s Own 

Information 

In the definition of ‘‘confidential 

information,’’ the proposed rule stated 

that documents or information created 

by a party will not be considered 

confidential with respect to usage of 

those documents or information by the 

same party (e.g., documents created by 

the DLC should not be considered 

confidential with respect to the DLC).90

ARM agrees that it ‘‘makes sense’’ to 

‘‘avoid imposing on the MLC or DLC a 

duty to protect its own information,’’ 

but advises against implementing this 

principle as part of the definition of 

‘‘confidential information.’’ 91 ARM 


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92 Id. 

93 Id. 

94 DLC NPRM Comment Add. at A–2. 

95MLC NPRM Comment App. at ii. 

96See 85 FR at 22564. 

97 85 FR at 22567. 

98The MMA expressly permits audits by 

copyright owners of the MLC’s ‘‘books, records, and 

data,’’ 17 U.S.C. 115(d)(3)(L)(i)(II), and by the MLC 

of digital music providers’ ‘‘books, records, and 

data,’’ id. at 115(d)(4)(D)(i)(II). 

99 85 FR at 22567. 

100The specific provision stated that they ‘‘shall 

not use any Confidential Information for any 

purpose other than determining compliance with 

statutory license requirements, royalty calculation, 

collection, matching, and distribution, and 

activities related directly thereto, in performing 

their duties during the ordinary course of their 

work for the MLC.’’ Id. 

101The specific provision stated that they ‘‘shall 

not use any Confidential Information for any 

purpose other than determining compliance with 

statutory license requirements, royalty calculation, 

collection, matching, and distribution, and 

activities related directly thereto, in performing 

their duties during the ordinary course of their 

work for the DLC.’’ Id. 

maintains that, for example, the 

provision of the proposed rule intending 

to prevent the MLC and DLC from 

imposing use and disclosure restrictions 

on their board members in addition to 

those contemplated by the regulations 

‘‘may not achieve its intended effect’’ if 

the MLC’s own confidential information 

‘‘is not included in the defined term 

Confidential Information as to the 

MLC.’’ 92 ARM contends that ‘‘[t]he 

principle of not restricting an entity’s 

use or disclosure of its own confidential 

information is typically accomplished 

in nondisclosure agreements by 

carefully drafting the substantive 

provisions so as to limit disclosure and 

use of other entities’ confidential 

information, rather than one’s own,’’ 

and ‘‘[t]hat seems like a preferable 

approach here.’’ 93 Though not expressly 

commenting on this issue, in its 

proposed regulatory language the DLC 

excludes the paragraph referencing use 

of a party’s own documents or 

information.94 For its part, the MLC 

suggests revising the paragraph to 

‘‘documents or information concerning 

a party, to the extent such party 

authorizes the usage of such documents 

or information.’’ 95

The Office has adjusted the interim 

rule to remove the paragraph 

referencing ‘‘documents or information 

created by a party’’ from the definition 

of ‘‘confidential information.’’ Because 

the definition of ‘‘confidential 

information’’ has been revised to mean 

sensitive financial or business 

information disclosed by digital music 

providers, significant non-blanket 

licensees, or copyright owners (or any of 

their authorized agents or vendors) to 

the MLC or DLC, and because the rule 

clearly restricts use and disclosure of 

such information by the MLC and DLC 

(as discussed below), this paragraph is 

no longer necessary. As described 

below, the Office has also adopted 

provisions relating to the confidentiality 

of MLC and DLC internal information. 

Should the Office learn of instances 

where a party is prevented from using 

or disclosing its own confidential 

information under the regulations, the 

Office will consider any necessary 

adjustments. 

B. Disclosure and Use of Confidential 

Information 

1. Proposed Rule’s Approach to 

Disclosure and Use of Confidential 

Information 

The proposed rule included various 

categories of permitted disclosure and 

use by MLC and DLC employees, board 

and committee members of the MLC and 

DLC (and their respective employers), 

and vendors and agents of the MLC and 

DLC. Given the somewhat divergent 

views from the MLC and DLC in 

response to the NOI, and the need for 

regulatory language to accommodate 

unforeseen issues, the proposed rule 

was intended to provide parity in access 

to confidential information, rather than 

hard and fast categories prohibiting 

disclosure of information relevant to, or 

accessed by, digital music providers or 

music publishers.96 The proposed rule 

permitted the following disclosures, 

while requiring all individuals receiving 

confidential information to execute a 

written confidentiality agreement: 97

• Employees of the MLC or DLC may 

receive confidential information. 

• Agents, consultants, vendors, and 

independent contractors of the MLC or 

DLC may receive confidential 

information, only when necessary to 

carry out their duties. 

• Other individuals authorized by the 

MLC may receive confidential 

information, but only to the extent 

necessary for such persons to know 

such information and only when 

necessary for the MLC to perform its 

duties. 

• Non-DLC members of the MLC’s 

board or statutory committees as well as 

DLC representatives on the MLC’s board 

or statutory committees may receive 

confidential information only on a needto-know basis and to the extent 

necessary to carry out their duties. 

• The MLC and DLC may disclose 

confidential information to qualified 

auditors or outside counsel under the 

statutorily-permitted audits.98

• The MLC and DLC may disclose 

confidential information to the Office, 

Copyright Royalty Board, and federal 

courts by parties to their proceedings, or 

when such disclosure is required by 

court order or subpoena, subject to an 

appropriate protective order. 

• DLC representatives who serve on 

the board of directors or committees of 

the MLC may share confidential 

information with individuals: 

Æ Serving on the board of directors 

and committees of the DLC, but only to 

the extent necessary for such persons to 

know such information and only when 

necessary to carry out their duties for 

the DLC. 

Æ Employed by DLC members, only to 

the extent necessary for such persons to 

know such information and for the DLC 

to perform its duties. 

The proposed rule included the 

following use restrictions for 

confidential information: 99

• The MLC, including its employees, 

agents, consultants, vendors, 

independent contractors, and non-DLC 

members of the MLC board of directors 

or committees, shall not use any 

confidential information for any 

purpose under than for section 115 

activities for the MLC.100

• The DLC, including its employees, 

agents, consultants, vendors, 

independent contractors, members of 

the DLC board of directors or 

committees, and DLC representatives 

serving on the board of directors or 

committees of the MLC, shall not use 

any confidential information for any 

purpose other than section 115 activities 

for the DLC.101

• Individuals employed by DLC 

members who receive confidential 

information from DLC representatives 

would be prohibited from using 

confidential information for any 

purpose other than for work performed 

during the ordinary course of business 

for the DLC or MLC. 

2. Interim Rule—Disclosure of 

Confidential Information 

Comments in response to disclosure 

requirements under the proposed rule 

were mixed. As discussed below, the 

DLC objected to this aspect of the 

proposed rule, maintaining that 

members of the MLC’s board of directors 

and committees should not have access 

to DMP-specific information relating to 

sensitive financial or business 

information. By contrast, the MLC 


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102 DLC Ex Parte Letter Oct. 14, 2020 (‘‘DLC Ex 

Parte Letter #6’’) at 5; see id. (‘‘This is particularly 

so because, in addition to the regular usage and 

royalty reporting that digital music providers will 

provide to the MLC the Office’s interim rule gives 

the MLC access to a broad range of additional 

information through the records of use provision.’’). 

103 Id. at 6. 

104 Id. (citation omitted). 

105 Id. (quoting 17 U.S.C. 115(d)(3)(D)(viii)). 

106 Id. 

107 DLC NPRM Comment at 6. 

108 Id. at 5. 

109 Id. at 6–7 (quoting 85 FR at 22564). The DLC 

proposes defining ‘‘MLC Internal Information’’ as 

‘‘sensitive financial or business information created 

or collected by the mechanical licensing collective 

for purposes of its internal operations, such as 

personnel, procurement, or technology 

information.’’ DLC Ex Parte Letter Dec. 11, 2020 

(‘‘DLC Ex Parte Letter #8’’) at 5. The DLC also 

proposes that ‘‘MLC Internal Information’’ would be 

subject to certain exclusion provisions in the 

proposed rule so as not to include documents or 

information that are public or may be made public 

as well as top-level compilation data presented in 

anonymized format. DLC Ex Parte Letter #8 at 5. 

The DLC similarly proposes a category of 

information called ‘‘DLC Internal Information’’ to 

cover sensitive financial or business information 

created or collected by the digital licensee 

coordinator for purposes of its internal operations. 

DLC NPRM Comment at 6–7, Add. A–2–A–3; DLC 

Ex Parte Letter #8 at 5. 

110 DLC NPRM Comment at 5. 

111 Id. at Add. A–3. As discussed more below, the 

DLC proposes that confidentiality agreements 

covering MLC Internal Information may be executed 

by the employers of the DLC representatives serving 

on the MLC board of directors or committees. DLC 

NPRM Comment at 3, Add. A–3. 

112 DLC NPRM Comment Add. at A–3. 

113 Id. In response to the NOI, the DLC initially 

proposed making a category of information called 

‘‘MLC Confidential Information’’ available to DLC 

representatives serving on the boards or committees 

of the MLC, which the DLC defined as ‘‘any nonpublic financial or business information created by 

the mechanical licensing collective.’’ DLC Reply 

NOI Comment Add. at A–22 (emphasis added). In 

the NPRM, the Office noted that ‘‘without more 

background, the Office [was] not sure this approach 

[was] advisable. It was not immediately clear to the 

Office whether the MLC would be able to recreate 

information that would otherwise not be accessible 

to board and committee members, and so the Office 

tentatively conclude[d] that the proposed rule 

offer[ed] a reasonable alternative.’’ 85 FR at 22564 

n.55. 

114MLC Ex Parte Letter Oct. 15, 2020 (‘‘MLC Ex 

Parte Letter #9’’) at 2. 

asserted that MLC governance requires 

seeing DMP-specific information, 

subject to appropriate written 

confidentiality agreements and the 

restriction that they not see information 

relating to specific, identified copyright 

owners. Other commenters supported 

either a more limited or a broader 

approach. These comments are 

discussed in turn below. 

The DLC contends that ‘‘it is 

absolutely critical that the Office 

maintain a strict firewall between the 

MLC Board and the sensitive 

information provided by digital music 

providers to the MLC,’’ 102 and that ‘‘[i]t 

would likewise be inappropriate for the 

MLC Board to gain information about 

the identity of digital music providers’ 

voluntary license partners, or the terms 

of those licenses.’’ 103 The DLC suggests 

that the MLC’s forty employees ‘‘are the 

ones who should be running the day-today operations of the MLC, and 

reporting high-level, anonymized, 

aggregate information to the Board, 

sufficient for the Board to engage in 

oversight.’’ 104 The DLC states that ‘‘the 

MMA requires the MLC’s officers to be 

independent of the Board, prohibiting 

anyone serving as an officer of the MLC 

to simultaneously ‘also be an employee 

or agent of any member of the board of 

directors of the collective or any entity 

represented by a member of the board of 

directors,’ ’’ and that ‘‘[i]t would be 

improper for MLC Board members to 

circumvent this restriction by becoming 

directly involved in the day-to-day 

operations of the MLC, especially if it 

means demanding special access to 

commercially sensitive information 

from digital music providers as a 

result.’’ 105 The DLC expresses concern 

about music publishers serving on the 

MLC Board and having access to 

sensitive financial and business 

information about DMPs, as they would 

‘‘gain a special advantage in any 

commercial negotiations with [a] digital 

music provider,’’ which ‘‘harms both 

the digital music providers, and 

(crucially) publishers that do not serve 

on the Board, who will be at a 

competitive disadvantage.’’ 106

The DLC proposes that ‘‘[a]t most, 

members of MLC and DLC boards and 

committees should be given access only 

to aggregated and anonymized data—a 

category of information that the 

Proposed Rule already excludes from 

the definition of Confidential 

Information.’’ 107 The DLC also argues 

that ‘‘the final rule needs to address in 

some manner the confidentiality of 

information that the MLC and DLC 

themselves generate as part of their own 

operations, while maintaining the 

ability for DLC members to get and 

share information related to MLC 

operations.’’ 108 To achieve this, the DLC 

proposes creating categories of ‘‘MLC 

Internal Information’’ and ‘‘DLC Internal 

Information’’ that may be more widely 

shared amongst the MLC and DLC 

because these categories would 

encompass information that ‘‘may be 

confidential from the perspective of the 

MLC and DLC,’’ but do not include 

‘‘information specific to a particular 

digital music provider or licensee,’’ and 

so are ‘‘less likely to create a risk that 

the Office expressed concern about—of 

‘confidential information from being 

misused by competitors for commercial 

advantage.’ ’’ 109

The DLC’s proposal would also 

specify conditions under which DLC 

members of the MLC board and 

committees could ‘‘share information 

about MLC operations with its 

membership, and with appropriate 

personnel within DLC member 

companies,’’ as well as DLC 

activities.110 Under the DLC’s approach, 

the MLC could share MLC Internal 

Information with representatives of the 

DLC who serve on the board of directors 

or committees of the MLC, only to the 

extent necessary for such persons to 

know such information, only when 

necessary to carry out their duties for 

the DLC, and subject to an appropriate 

written confidentiality agreement.111

The DLC proposes that DLC recipients 

of this information may further share 

such MLC Internal Information with (1) 

employees, agents, consultants, vendors, 

and independent contractors of the DLC, 

only to the extent necessary for the 

purpose of performing their duties 

during the ordinary course of their work 

for the DLC, only to the extent necessary 

for such persons to know such 

information, subject to an appropriate 

written confidentiality agreement; (2) 

individuals serving on the board of 

directors and committees of the DLC, 

only to the extent necessary for such 

persons to know such information and 

only when necessary to carry out their 

duties for the DLC, subject to an 

appropriate written confidentiality 

agreement; and (3) individuals 

otherwise employed by members of the 

DLC, only to the extent necessary for 

such persons to know such information 

and only when necessary for the DLC to 

perform its duties, subject to an 

appropriate written confidentiality 

agreement.112 DLC Internal Information 

could be shared with members of the 

DLC board of directors and committees, 

subject to an appropriate written 

confidentiality agreement.113

By contrast, the MLC contends that it 

would not ‘‘be appropriate to 

promulgate a regulation that prevents 

the MLC’s governance from seeing DMPspecific information, subject to 

appropriate written confidentiality 

agreements and the restriction that they 

not see information relating to specific, 

identified copyright owners.’’ 114 The 

MLC asserts that ‘‘because the MLC 

board oversees the blanket license 

administration and administrative 

assessment collection processes, [it] 

must be able to be informed as to 

compliance with these processes,’’ and 

that because ‘‘compliance is an 

individual DMP issue, not an industry 


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115 Id.; see also id. at 3 (stating that ‘‘it is 

appropriate and necessary for the MLC to be 

permitted to share’’ information about specific DMP 

interactions with the MLC regarding ‘‘certifications, 

efforts obligations, or other reporting or royalty 

payment obligations,’’ and that such information 

‘‘can be essential context for substantial decisions 

as to compliance that the board is tasked in the 

MMA with overseeing, such as whether to audit, 

notice a default or take other action against a 

DMP’’). 

116 Id. at 2. The MLC does not anticipate its 

Dispute Resolution Committee or the Operations 

Advisory Committee needing to view DMP-specific 

data. Id. at 3. 

117 Id. at 4. 

118MLC NPRM Comment at 19; see id. at 16 

(‘‘[J]ust as music publisher employees who sit on 

the MLC board or committees should not be 

permitted to share with their publisher employers 

confidential information provided to the MLC by 

competitors of such employer (which the Proposed 

Regulation does not allow), a DLC appointee 

employed by a DMP should not be permitted to 

share with their DMP employer confidential 

information provided to the MLC by a competitor 

of such DMP employer.’’). 

119 Id. at 5. 

120 Id. at 15; see also id. at 16–17 (‘‘Each DLC 

appointee was specifically chosen for his or her 

knowledge and expertise in the relevant subject 

matter (e.g., individuals chosen to serve on the 

operations advisory committee have technological 

and operational expertise),’’ and ‘‘[i]t would be 

wholly inappropriate to grant these individuals 

discretion to share the confidential information of 

copyright owners and other DMPs with any of more 

than a million people.’’). 

121 Id. at 19. 122 Id. at 12. 123 Id. 124CISAC & BIEM NPRM Comment at 2; see also 

id. (‘‘[A]ny disclosure of Confidential Information 

should at all times (i) be justified by a ‘need-toknow’ basis, and (ii) be very strictly interpreted in 

connection to the performance of the relevant 

duties. Furthermore, (iii) any individual receiving 

the Confidential Information should always be 

obliged to execute a Non-Disclosure Agreement 

(‘NDA’).’’). 

125ARM NPRM Comment at 7–8; see also ARM 

NPRM Comment at 7 (‘‘[T]he MLC simply should 

not have information about sound recording 

royalties to share with board and committee 

members and the like.’’); id. (‘‘If the MLC were to 

have access to such information, that kind of 

information should be protected either through an 

additional category of Highly Confidential 

Information that would include recorded music 

company deal terms and other third-party 

competitively sensitive information and could not 

be shared with such persons or through an 

equivalent mechanism (such as simply prohibiting 

disclosure of that type of Confidential Information 

to such persons).’’). 

126 Id. at 7; see id. (noting that MLC committee 

members’ roles ‘‘seem directed to setting policy, 

rather than digging into the details of particular 

companies’ activities’’). 

127NMPA NPRM Comment at 3. 

128 Id. at 2 (providing music publisher market 

share data as an example). 

129 Id. at 3. 

issue, it is critical that the MLC 

governance be informed at the DMP 

level, not just the industry-aggregate 

level.’’ 115 Regarding the MLC’s 

committees, the MLC ‘‘envisions that 

the Unclaimed Royalties Oversight 

Committee would review DMP-specific 

data’’ to ‘‘create policies and procedures 

to minimize the incidence of unclaimed 

accrued royalties,’’ such as ‘‘specific 

examples of potential matches to get a 

concrete understanding of what types of 

results fall into different confidence 

levels’’ when analyzing matching 

performance and confidence levels.116

Finally, regarding the DLC’s proposed 

categories of ‘‘MLC Internal 

Information’’ and ‘‘DLC Internal 

Information,’’ the MLC maintains they 

are ‘‘unnecessary’’ because the ‘‘MLC 

and DLC can control disclosures of their 

internal information through 

appropriate written confidentiality 

agreements.’’ 117

Instead, to ‘‘ensure that the MLC 

board and committee members shall not 

receive inappropriate confidential 

information,’’ the MLC proposes 

language to ‘‘clarif[y] . . . that no 

copyright owners or songwriters (which 

captures all of the MLC’s directors and 

committee members, except for those 

representing DMPs) will be shown 

confidential information of other 

copyright owners,’’ and that digital 

music providers should ‘‘not receiv[e] 

information concerning 

competitors.’’ 118 The MLC maintains 

that ‘‘neither DLC appointees, nor 

publisher or songwriter representatives 

should be permitted to share 

confidential information received in 

their roles as MLC board or committee 

members with their employers,’’ 119 and 

that allowing ‘‘disclosure[s] to 

employers by any board or committee 

member, including DLC appointees, 

would raise significant competitive 

concerns and jeopardize the MLC’s 

ability to control, and ensure against, 

unfettered dissemination of confidential 

or competitively sensitive 

information.’’ 120 The MLC also 

contends that ‘‘MLC board and 

committee members, regardless of the 

identity of their employer (i.e., whether 

a DMP, a publisher, a songwriter or a 

trade organization) should be subject to 

the same, strict provisions concerning 

the confidential information received in 

connection with their board or 

committee engagement.’’ 121 The MLC 

contends that the proposed conditions 

limiting access to information only 

‘‘where necessary to carry out their 

duties’’ and ‘‘during the ordinary course 

of their work’’ is ‘‘confusing and 

unnecessary,’’ and suggests that ‘‘[i]f use 

of the information is limited to the 

performance of the MLC’s statutory 

functions, that should be sufficient.’’ 122

The MLC says these phrases also 

‘‘create[ ] the argument that MLC 

vendors or contractors would have to 

use an alternate procedure to perform 

work without using Confidential 

Information if such was possible, even 

where it would be highly inefficient and 

costly.’’ 123

Other comments regarding access of 

MLC and DLC board and committee 

members, and DLC member employers, 

to confidential information generally 

supported a more limited approach. 

CISAC & BIEM assert that ‘‘[w]hile there 

is certainly a need for the DLC to access 

certain Confidential Information to 

perform its duties, disclosure to 

individual employees of DLC members 

is not justified.’’ 124 Similarly, ARM 

argues that ‘‘it is not apparent that there 

is any need for board and committee 

members to share confidential 

information with their employers, 

except . . . to give them access to MLC 

confidential information to obtain 

feedback concerning operational 

policies.’’ 125 To ARM, ‘‘[i]t is not 

apparent that the MLC board would ever 

need to discuss confidential information 

of particular third-party companies,’’ 

and ‘‘even in the context of considering 

whether to authorize an enforcement 

action by the MLC against a particular 

DMP, it would seem sufficient for the 

MLC board to understand that MLC 

management believes the DMP 

underpaid royalties by a certain 

aggregate amount.’’ 126 NMPA 

recommended that the Office’s 

regulations adopt the same standard for 

all board and committee members,127

and stated that ‘‘DLC representatives on 

the MLC board and [committees] may 

have access to a host of sensitive 

confidential information that, if 

provided to their employers, could put 

music publishers and DMPs that are not 

members of the DLC at a competitive 

disadvantage.’’ 128 Noting that the MLC’s 

statutorily-created Operations Advisory 

Committee ‘‘is made up of various 

operations technology experts at the 

DMPs and music publishers’’ who were 

‘‘presumably selected for their roles 

precisely because they have the relevant 

subject matter expertise,’’ NMPA further 

stated that because ‘‘DLC 

representatives work for technology 

companies,’’ they ‘‘are far less likely to 

need to ‘solicit additional subject matter 

expertise’ on ‘technical considerations’ 

from another individual employed by 

his or her DMP employer than might a 

music publisher representative on the 

MLC board or a committee.’’ 129

In contrast, the Songwriters Guild of 

America, Inc. (‘‘SGA’’) and the Society 

of Composers & Lyricists (‘‘SCL’’) 

proposed a broader approach whereby 

‘‘[n]on-DLC members on the MLC board 

of directors or committees may receive 

Confidential Information from the MLC 

subject to an appropriate written 


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130SGA & SCL NPRM Comment at 2. 

131See DLC Ex Parte Letter #6 at 6; MLC NPRM 

Comment at 5, 15. 

132See The MLC, The MLC Bylaws, https://

themlc.com/sites/default/files/2020-05/ 

Bylaws%20of%20The%20MLC.pdf (last visited 

Feb. 6, 2021). 

133MLC NPRM Comment at 15. 

134See 17 U.S.C. 115(d)(3)(D)(viii); Conf. Rep. at 

4 (‘‘To ensure that the [MLC’s] officers are 

independent, individuals serving as officers of the 

collective may not, at the same time, also be an 

employee or agent of any member of the collective’s 

Board of Directors or any entity represented by a 

member of the collective’s Board of Directors.’’). 

135See MLC Initial NOI Comment at 30. 

136See MLC Ex Parte Letter #9 at 5 (proposing 

general approach). The Office also adjusted some 

provisions of the interim rule to focus on disclosure 

rather than receipt of information, as the MLC 

requested. See MLC NPRM Comment at 3 (‘‘A 

regulation governing the treatment of confidential 

information, like a confidentiality or nondisclosure 

agreement, should regulate disclosure, not receipt, 

of such information, as the party disclosing the 

information is in the best position to control 

dissemination of, and to protect, confidential 

information . . . .’’). 

137See 37 CFR 380.5(c)(1) (requiring 

SoundExchange to limit access to confidential 

information to ‘‘employees, agents, consultants, and 

independent contractors of the Collective, subject to 

an appropriate written confidentiality agreement, 

who are engaged in the collection and distribution 

of royalty payments hereunder and activities related 

directly thereto who require access to the 

Confidential Information for the purpose of 

performing their duties during the ordinary course 

of their work’’); id. at 380.24(d)(1) (similar); id. at 

380.34(d)(1) (similar). 

138As discussed below, regarding disclosure of 

MLC Internal Information, the Office made similar 

adjustments with respect to receipt of such 

information by parties performing work for the 

DLC. 

confidentiality agreement,’’ and 

‘‘Confidential Information may be 

withheld from such members only in 

those instances in which it is 

demonstrably unnecessary for such 

persons to know such information in the 

course of carrying out their duties for 

the MLC.’’ 130

i. Disclosure of Confidential Information 

to Mechanical Licensing Collective and 

Digital Licensee Coordinator Persons 

and Entities 

After carefully considering these 

comments, the Office concludes that 

taking a more conservative approach to 

new issues presented in this rulemaking 

regarding the protection of sensitive 

financial or business information 

disclosed by digital music providers, 

significant non-blanket licensees, and 

copyright owners (or any of their 

authorized agents or vendors) to the 

mechanical licensing collective or 

digital licensee coordinator is 

appropriate. Although the MLC 

advocates for a generally more open 

approach than the DLC, both entities 

acknowledge that improper disclosure 

of confidential information could be 

harmful.131 It is not apparent that the 

MLC’s board of directors must access 

DMP-specific confidential information 

in order to generally supervise and 

‘‘manage the business and affairs of the 

Collective;’’ 132 as also raised by the 

MLC, the Office is mindful of the need 

to ‘‘control, and ensure against, 

unfettered dissemination of confidential 

or competitively sensitive 

information.’’ 133 The Office is inclined 

to agree with the DLC that although the 

MLC’s officers should be overseen by 

the MLC’s board of directors, the 

officers should be able to operate 

generally independently on a day-to-day 

basis, including when considering 

information that would be competitively 

sensitive if disclosed to MLC 

directors.134 As noted above, the interim 

rule adopts the MLC’s proposal of 

excluding from the meaning of 

‘‘confidential information’’ any top-level 

compilation data presented in 

anonymized format that does not allow 

identification of such data as belonging 

to any digital music provider, 

significant nonblanket licensee, or 

copyright owner.135 Accordingly, 

members of the MLC’s board of directors 

(and committees) will still receive 

aggregated data to know how the 

blanket license is functioning and 

whether remedial actions may be 

necessary (e.g., the collective’s matching 

rates and distribution times, royalty 

collection and distribution, budgeting 

and expenditures, aggregated royalty 

receipts and payments). As to the MLC’s 

examples for which it proposes that 

access to DMP-specific confidential 

information would be necessary (i.e., 

whether to audit, notice a default, or 

take other action against a DMP), the 

Office expects that the collective would 

be able to notify the MLC’s board of 

directors of such situations without 

needing to disclose granular details 

regarding the DMP’s sensitive financial 

or business information. To the extent 

future developments challenge this 

assumption, the Office believes the 

more prudent approach is to consider 

whether easing of restrictions is 

appropriate, as opposed to tightening up 

disclosure rules after the fact. Once the 

MLC has progressed in its 

administration of the blanket license, if 

there are concrete, specific examples of 

situations where members of the MLC or 

DLC boards or committees find 

themselves requiring access to certain 

information to fulfill their duties but are 

prohibited such access under the 

interim rule, the Office will consider 

adjustment of its regulations. 

Against this backdrop, the interim 

rule takes the following approach. The 

mechanical licensing collective shall 

limit disclosure of confidential 

information to its employees, agents, 

consultants, vendors, and independent 

contractors who are engaged in the 

collective’s authorized functions under 

17 U.S.C. 115(d) and activities related 

directly thereto and who require access 

to confidential information for the 

purpose of performing their duties 

during the ordinary course of their work 

for the mechanical licensing collective, 

subject to an appropriate written 

confidentiality agreement.136 In 

response to the MLC’s concern 

regarding the phrase ‘‘only when 

necessary to carry out their duties’’ 

being interpreted to require vendors or 

contractors to use an alternate 

procedure to perform work without 

using confidential information if 

possible (even where it would be highly 

inefficient and costly), the Office 

changed the language to read ‘‘require 

access to Confidential Information for 

the purpose of performing their 

duties.’’ 137 The interim rule includes 

this language because not all employees, 

agents, consultants, vendors, and 

independent contractors of the MLC and 

DLC will need access to confidential 

information (or the same types of 

confidential information) to perform 

their jobs (e.g., receptionists answering 

telephones for the MLC’s office).138

For the reasons discussed, the interim 

rule precludes the mechanical licensing 

collective from disclosing confidential 

information to members of its board of 

directors or committees, including the 

collective’s Unclaimed Royalties 

Oversight Committee, or the DLC’s 

board of directors or committees. 

Recipients of confidential information 

from the MLC shall not disclose such 

confidential information to anyone else 

except as expressly permitted in the 

Office’s regulations, with an exception 

for qualified auditors or outside counsel 

conducting statutorily-permitted audits, 

or attorneys and other authorized agents 

of parties to proceedings before federal 

courts, the Copyright Office, or the 

Copyright Royalty Judges, or when such 

disclosure is required by court order or 

subpoena (discussed below). 

For parity, the interim rule states that 

the digital licensee coordinator shall 

limit disclosure of confidential 

information to its employees, agents, 

consultants, vendors, and independent 

contractors who are engaged in the 

digital licensee coordinator’s authorized 

functions under 17 U.S.C. 115(d)(5)(C) 

and activities related directly thereto, 

and require access to confidential 

information for the purpose of 

performing their duties during the 


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139See id. at 210.29(c). 

140See 17 U.S.C. 115(d)(6)(A); 37 CFR 210.25; id. 

at 210.28. 

141MLC NPRM Comment at 19. 

142See id., App. at iii (proposing that no 

copyright owners or songwriters should have access 

to confidential information of other copyright 

owners). 

143See DLC NOI Initial Comment at 23 (‘‘DLC 

representatives are thus meant to represent the 

entire digital licensee community, and should be 

able to share information among DLC 

membership.’’); see also id. at 28. 

144See DLC Ex Parte Letter #6 at 7 (including 

‘‘disciplinary files for personnel, or competing 

vendor bids’’ as examples of ‘‘MLC Internal 

Information’’). 

145The definition of ‘‘MLC Internal Information’’ 

does not, as proposed by the DLC, exclude ‘‘top 

level, compilation data presented in anonymized 

format that does not allow identification of such 

data as belonging to any specific digital music 

provider, significant nonblanket licensee, or 

copyright owner.’’ See DLC Ex Parte Letter #8 at 5. 

By definition, ‘‘MLC Internal Information’’ is 

restricted to information regarding the MLC’s 

internal operations. 146 85 FR at 22568. 

ordinary course of their work for the 

digital licensee coordinator, subject to 

an appropriate written confidentiality 

agreement. The interim rule also states 

that the digital licensee coordinator 

shall not disclose confidential 

information to members of the digital 

licensee coordinator’s board of directors 

or committees, or the mechanical 

licensing collective’s board of directors 

or committees. Recipients of 

confidential information from the DLC 

shall not disclose such confidential 

information to anyone else except as 

expressly permitted in the Office’s 

regulations, with an exception for 

qualified auditors or outside counsel 

conducting statutorily-permitted audits, 

or attorneys and other authorized agents 

of parties to proceedings before federal 

courts, the Copyright Office, or the 

Copyright Royalty Judges, or when such 

disclosure is required by court order or 

subpoena (discussed below). 

Notwithstanding the above 

restrictions, the interim rule clarifies 

that the mechanical licensing collective 

shall continue to fulfill its disclosure 

obligations under section 115 including, 

but not limited to, delivering royalty 

statements to copyright owners 139 and 

providing monthly reports to the digital 

licensee coordinator identifying any 

significant nonblanket licensees that are 

not in compliance with the Office’s 

regulations regarding notices of 

nonblanket activity and reports of usage 

for the making and distribution of 

phonorecords of nondramatic musical 

works.140 Because royalty statements 

could be confidential to copyright 

owners themselves, and given the 

MLC’s suggestion that regulations 

should prohibit disclosure of 

confidential information regarding a 

‘‘particular, identified copyright owner 

to other copyright owners (including 

their agents or representatives) or 

songwriters,’’ 141 the interim rule states 

that members of the MLC’s board of 

directors or committees shall not have 

access to other musical work copyright 

owners’ royalty statements, except 

where a copyright owner discloses its 

own statement to such bodies.142 For 

parity, the digital licensee coordinator, 

including members of the digital 

licensee coordinator’s board of directors 

or committees, shall be similarly 

restricted. Under the rule, members of 

the mechanical licensing collective’s 

board and committees are not, however, 

restricted in accessing their own royalty 

statements from the mechanical 

licensing collective. 

Disclosure of MLC Internal Information 

and DLC Internal Information 

As proposed by the DLC, the interim 

rule also incorporates ‘‘MLC Internal 

Information’’ as a category of 

information that can be shared with the 

MLC board of directors and committees, 

including representatives of the DLC, 

subject to an appropriate written 

confidentiality agreement.143 To ensure 

that ‘‘MLC Internal Information’’ does 

not extend to sensitive business and 

financial information disclosed by 

DMPs, copyright owners, and significant 

nonblanket licensees to the MLC (i.e., 

‘‘confidential information’’), the interim 

rule defines ‘‘MLC Internal Information’’ 

as sensitive financial or business 

information created by or collected by 

the mechanical licensing collective for 

purposes of its internal operations, such 

as personnel, procurement, or 

technology information.144 Under the 

interim rule, ‘‘MLC Internal 

Information’’ excludes information that 

is public or may be made public by 

various avenues, similar to the 

regulatory definition of ‘‘Confidential 

Information.’’ 145 In addition, the 

interim rule creates a corresponding 

category of ‘‘DLC Internal Information.’’ 

Because ‘‘MLC Internal Information’’ 

and ‘‘DLC Internal Information’’ do not 

relate to sensitive business information 

disclosed by DMPs, significant 

nonblanket licensees, or copyright 

owners, the rule does not impose strict 

disclosure requirements as it does with 

‘‘confidential information’’ due to the 

less-sensitive nature of these 

information categories. Rather, the rule 

creates categories of individuals to 

whom the MLC and DLC may disclose 

‘‘MLC Internal Information’’ and/or 

‘‘DLC Internal Information’’ (subject to a 

confidentiality agreement), which gives 

the MLC and DLC some flexibility if 

they decide additional disclosure is 

necessary. The rule also states that the 

MLC may disclose MLC Internal 

Information to other individuals in its 

discretion, subject to the adoption of 

reasonable confidentiality policies. The 

rule contains a parallel provision for the 

DLC and DLC Internal Information. 

Specifically, the interim rule states that 

the MLC may disclose MLC Internal 

Information to members of the MLC’s 

board of directors and committees, 

including representatives of the DLC 

who serve on the MLC’s board of 

directors or committees. The interim 

rule also states that representatives of 

the DLC who serve on the board of 

directors or committees of the 

mechanical licensing collective and 

receive MLC Internal Information may 

share such MLC Internal Information 

with the following persons, who require 

access to such information for the 

purpose of performing their duties 

during the ordinary course of their work 

for the DLC, subject to an appropriate 

written confidentiality agreement: 

• Employees, agents, consultants, 

vendors, and independent contractors of 

the DLC; 

• Individuals serving on the board of 

directors or committees of the DLC or 

MLC; and 

• Individuals otherwise employed by 

members of the DLC. 

Under the interim rule, the DLC may 

disclose DLC Internal Information to the 

following persons, subject to an 

appropriate written confidentiality 

agreement: 

• Members of the DLC’s board of 

directors and committees; and 

• Members of the MLC’s board of 

directors and committees. 

ii. Disclosure of Confidential 

Information to Non-Mechanical 

Licensing Collective and Non-Digital 

Licensee Coordinator Persons and 

Entities 

The proposed rule allowed disclosure 

of confidential information to attorneys 

and other authorized agents of parties to 

proceedings before federal courts, the 

Office, or the Copyright Royalty Judges, 

or when such disclosure is required by 

court order or subpoena, subject to an 

appropriate protective order or 

agreement.146 The proposed rule also 

permitted disclosure to qualified 

auditors or outside counsel pursuant to 

the statutorily-permitted audits by the 

MLC of a digital music provider 

operating under the blanket license or 

audits by copyright owners of the MLC. 

No commenter objected to these 

provisions, and the MLC, DLC, and 


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147See MLC NPRM Comment App. at v; DLC 

NPRM Comment Add. at A–4; ARM NPRM 

Comment at 14. 

148See, e.g., National Association of Independent 

Songwriters (‘‘NOIS’’) et al. Initial NOI Comment at 

16 (‘‘The vendors for the MLC should not be . . . 

able to use information and data that the MLC will 

gather and control to their competitive advantage. 

If they are in competition with other entities 

considered to be similar in nature or can use the 

data to their own unique proprietary advantage, 

they should not be eligible to be selected as a 

vendor.’’); Lowery Reply NOI Comment at 12 (‘‘If 

the Copyright Office does not prohibit HFA from 

selling for other commercial purposes the data it 

acquires through its engagement by MLC to 

facilitate the compulsory blanket license, the 

Congress will have just handed HFA a near 

insurmountable advantage over its competitors.’’); 

see also DLC NPRM Comment at 2, U.S. Copyright 

Office Dkt. No. 2020–8, available at https://

beta.regulations.gov/docket/COLC-2020-0006. 

149 85 FR at 22565; see also 37 CFR 380.5(b) 

(prohibiting SoundExchange from using ‘‘any 

Confidential Information for any purpose other than 

royalty collection and distribution and activities 

related directly thereto’’). 

150 85 FR at 22565. 

151 Id. (quoting MLC Ex Parte Letter #1 at 4) 

(citation omitted). 

152FMC NPRM Comment at 1 (‘‘There should be 

no provision for HFA to use confidential data for 

‘general use’, even on an opt-in basis. The risk of 

anti-competitive harm is too great.’’); CISAC & 

BIEM NPRM Comment at 3 (‘‘Our organisations 

support this Proposed Rulemaking because some 

Vendors may obtain commercially valuable 

information, use it for their own activities and thus 

create conflicts of interest.’’). 

153FMC NRPM Comment at 1–2, U.S. Copyright 

Office Dkt. No. 2020–8, available at https://

beta.regulations.gov/docket/COLC-2020-0006; see 

also id. at 2 (‘‘The Office can require the MLC to 

disclose what it is doing to prevent any vendor from 

being too operationally enmeshed with the MLC 

that it either enjoys an unfair advantage through 

that relationship, or that it would be practically 

impossible for another vendor to step in.’’). 

154SoundExchange NRPM Comment at 8, U.S. 

Copyright Office Dkt. No. 2020–8, available at 

https://beta.regulations.gov/docket/COLC-2020- 

0006. 

155See DLC NPRM Comment Add. at A–2; DLC 

Ex Parte Letter #6 at 7. The DLC does propose an 

adjustment to the proposed rule to restrict its 

vendors from using confidential information to 

‘‘duties that are made the responsibility of the DLC, 

under 17 U.S.C. 115(d)(5)(C), including efforts to 

enforce notice and payment obligations with 

respect to the administrative assessment.’’ DLC Ex 

Parte Letter #6 at 7. 

156 DLC NPRM Comment at 1, U.S. Copyright 

Office Dkt. No. 2020–8, available at https://

beta.regulations.gov/docket/COLC-2020-0006. 

157MLC NPRM Comment at 13. 

158 Id. at 4. 

159 Id. 

160 Id. 

161 Id. 

162 17 U.S.C. 115(d)(12)(C). 

163 Id. at 115(d)(3)(C)(iii) (limiting administration 

of voluntary licenses to ‘‘only [the] reproduction or 

distribution rights in musical works for covered 

activities’’). 

ARM retained them in their respective 

proposed statutory text.147 In light of 

these comments, the interim rule adopts 

this aspect of the proposed rule. As 

noted above, while the rule generally 

states that recipients of confidential 

information from the MLC or DLC shall 

not disclose such confidential 

information to anyone else except as 

expressly permitted in the Office’s 

regulations, it creates an exception for 

qualified auditors or outside counsel 

conducting statutorily-permitted audits, 

or attorneys and other authorized agents 

of parties to proceedings before federal 

courts, the Copyright Office, or the 

Copyright Royalty Judges, or when such 

disclosure is required by court order or 

subpoena. 

3. Interim Rule—Restrictions on Use of 

Confidential Information 

In response to multiple commenters 

expressing concern about MLC vendors 

using the confidential information they 

acquire while conducting work for the 

MLC for other purposes,148 the 

proposed rule restricted MLC vendors 

from using confidential information for 

purposes other than for duties 

performed during the ordinary course of 

work for the MLC, including the 

administration of voluntary bundled 

licensing of performance and 

mechanical uses that the MLC itself is 

prohibited from administering.149 The 

proposed rule similarly restricted DLC 

vendors.150 In issuing the proposed rule, 

the Office tentatively declined to adopt 

the MLC’s proposal to preferentially 

allow ‘‘users who submit confidential 

data to the MLC an ability to voluntarily 

‘opt in’ to share that data for general use 

by its primary royalty processing 

vendor, the Harry Fox Agency’’ 

(‘‘HFA’’), as the MLC did not detail 

what it meant by ‘‘general use.’’ 151

FMC and CISAC & BIEM support this 

aspect of the proposed rule, noting that 

vendors’ use of confidential information 

other than for duties performed during 

the ordinary course of work for the MLC 

or DLC has the potential to increase the 

risk of anti-competitive harm and 

conflicts of interest.152 In a parallel 

rulemaking, the DLC, FMC, and 

SoundExchange emphasized the 

importance of MLC vendors not 

receiving preferential treatment or 

market advantage by virtue of their 

association with the MLC, with FMC 

stating that ‘‘Congress intended to 

encourage a healthy competitive 

marketplace for other kinds of licensing 

businesses and intermediaries,’’ and 

‘‘it’s important that MLC’s chosen 

vendors not be able to leverage their 

status with the MLC to advantage 

themselves in other business activities 

not covered under the MMA.’’ 153

SoundExchange asserted that Congress 

‘‘intended to preserve a vibrant and 

competitive marketplace for 

intermediaries [besides the MLC] who 

provide other license administration 

services,’’ and this intent would be 

frustrated ‘‘[i]f the MLC’s vendors were 

to receive an unfair advantage in the 

music licensing marketplace through 

means such as preferred access to digital 

music providers or referrals by the MLC 

for extrastatutory business opportunities 

in a manner not available to their 

competitors.’’ 154 The DLC did not 

oppose this aspect of the proposed 

rule,155 and in a parallel rulemaking, 

expressed concern as ‘‘to whether the 

MLC’s selected vendors will gain a 

special competitive advantage in related 

marketplaces—such as the 

administration of voluntary licenses— 

merely by dint of their association with 

the collective responsible for licensing 

all mechanical rights in the United 

States.’’ 156

For its part, the MLC contends that 

this aspect of the proposed rule ‘‘is 

overly prescriptive, imposes 

unnecessary burdens and costs on 

copyright owners, and is likely not 

within the scope of the Office’s 

authority.’’ 157 While the proposed rule 

would restrict only actions of the 

mechanical licensing collective, the 

MLC argues that the proposed rule 

‘‘prevent[s] the MLC’s copyright owner 

members from voluntarily electing to 

share their own information with the 

MLC’s vendors,’’ 158 and that 

‘‘[c]opyright owners that wish to use the 

MLC’s vendors for purposes other than 

the administration of the blanket license 

should not have to incur the time and 

expense to input duplicates of 

information that can be transferred 

voluntarily without any transaction 

costs.’’ 159 NMPA echoes the MLC’s 

position, maintaining that ‘‘[w]here a 

copyright owner provides to HFA its 

confidential information by virtue of 

HFA’s role as administrator of the 

blanket license, it may make the most 

business sense (and be most efficient) to 

authorize HFA to use that information 

for the copyright [owners’] other 

licenses.’’ 160 NMPA also asserts that 

‘‘HFA gains no special advantage by 

receiving the same information one time 

rather than multiple times,’’ but that 

‘‘copyright owners are decidedly 

disadvantaged in having to submit 

multiple but identical data sets.’’ 161

As noted above, the MMA expressly 

directs the Office to adopt regulations 

to, among other things, prevent the 

improper use of confidential 

information contained in the 

mechanical licensing collective’s 

records.162 The MMA also expressly 

restricts the mechanical licensing 

collective to administering the 

mechancial license,163 as the MLC 


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164See MLC NOI Comment at 10, U.S. Copyright 

Office Dkt. No. 2020–8, available at https://

www.regulations.gov/docketBrowser

?rpp=25&so=DESC&sb=comment

DueDate&po=0&dct=PS&D=COLC-2020-0006 

(‘‘[B]ecause the MLC is prohibited from licensing 

rights other than mechanical rights, . . . the MLC 

agrees with the Office that . . . it is ‘unlikely to be 

prudent or frugal to require the MLC to expend 

resources to maintain [in the public database] PRO 

affiliations for rights it is not permitted to 

license.’ ’’) (citing 85 FR at 22576). 

165See also Senate Judiciary Comm., Executive 

Business Meeting, C–SPAN, at 53:24–53:59 (June 

28. 2018), https://www.c-span.org/video/?447464-1/ 

judiciary (statement of Sen. Cruz) (‘‘The problem is 

that there is already right now a functioning 

marketplace that is doing that –there are many 

companies today that manage, collect, and 

distribute mechanical rights for digital music 

companies and this bill would put them all out of 

business. . . . The amendment that I filed, what it 

would do is open up blanket licenses to other 

entities—to promote competition at a lower 

price.’’); Id. at 50:41–50:55 (statement of Sen. 

Cornyn) (‘‘I did want to highlight one issue that’s 

been brought to my attention. The creation of this 

mechanical licensing collective in the Copyright 

Office—and precludes any private entity from 

perhaps providing that same service.’’); Shirley 

Halperin, Music Modernization Act Stares Down 

Potential Snag, Variety (July 23, 2018), https://

variety.com/2018/music/news/musicmodernization-act-blackstone-sesac-congresssenate-1202881536/ (describing issue as 

endangering prospects for MMA passage); Steve 

Brachmann, Compromise on Music Modernization 

Act Leads to Unconditional Support From Music 

Industry Organizations, IPWatchdog (Aug. 18, 

2018), https://www.ipwatchdog.com/2018/08/18/ 

compromise-music-modernization-act-musicindustry-support/id=100162/ (reporting resolution 

through amendment limiting the MLC’s ability to 

administer voluntary licenses). 166MLC Ex Parte Letter #1 at 4. 

167MLC NPRM Comment at 4. 

168NMPA NPRM Comment at 4. 

169 Id. 

170MLC NPRM Comment at 4. 

171MLC NPRM Comment App. at iii. 

172 85 FR at 22565. 

173 Id. 

174See MLC NPRM Comment at 10 (‘‘The MLC 

proposes, at a minimum, clarifying the Proposed 

Regulation to ensure that the MLC can conduct the 

statutory functions charged by Congress.’’). 

175The Office adjusted the interim rule to align 

with the DLC’s responsibilities under section 115. 

See DLC NPRM Comment at 7–8. 

176MLC Initial NOI Comment at 29 (stating 

‘‘protection of such confidential, private, 

proprietary or privileged information may be 

accomplished through a regulation that requires the 

MLC and the DLC to implement confidentiality 

policies that prevent improper or unauthorized use 

of such material by their directors, committee 

members, and personnel’’); DLC Reply NOI 

Comment Add. at A–21–22 (proposing that the MLC 

and DLC (and any person authorized to receive 

confidential information) ‘‘must implement 

procedures to safeguard against unauthorized 

access to or dissemination of Confidential 

Information using a reasonable standard of care, but 

no less than the same degree of security that the 

recipient uses to protect its own Confidential 

Information or similarly sensitive information’’). 

acknowledges,164 and the legislative 

history reflects Congress’s intention that 

this provision was critical to safeguard 

continued private competition outside 

of the MLC’s administration of the 

blanket mechanical license.165 Given 

Congress’s actions to preserve 

competition for music licensing vendors 

and the overwhelming concern from 

commenters that MLC vendors should 

not be able to gain commercial 

advantage due to its association with the 

MLC, the Office again declines to adopt 

the MLC’s proposal to allow ‘‘users who 

submit confidential data to the MLC an 

ability to voluntarily ‘opt in’ to share 

that data for general use by its primary 

royalty processing vendor, the Harry 

Fox Agency.’’ 166

If the Office were to adopt the MLC’s 

proposal, HFA would receive an 

advantage for non-mechanical business 

opportunities not granted to competitors 

(i.e., confidential information ‘‘for 

purposes other than the administration 

of the blanket license,’’ 167 such as the 

administration of copyright owners’ 

‘‘other licenses’’ 168) and preferential 

access and treatment (i.e., data ‘‘by 

virtue of HFA’s role as administrator of 

the blanket license,’’ 169 and ‘‘without 

any transaction costs’’ 170). Allowing 

HFA to benefit from its association with 

the MLC for business opportunities 

outside the administration of the 

blanket license is precisely the scenario 

multiple commenters have warned 

against, and is in tension with 

Congress’s deliberate decision to limit 

the scope of the mechanical licensing 

collective. Contrary to the MLC and 

NMPA’s position, the Office is not 

preventing copyright owners from 

sending their information to a particular 

vendor; rather, the Office is preventing 

the MLC from providing its vendor with 

confidential information in a manner 

that results in disparate and preferential 

treatment. 

The Office similarly rejects the MLC’s 

proposed language stating that 

‘‘[n]othing herein shall preclude the 

party or parties to whom information is 

confidential from voluntarily 

transmitting such Confidential 

Information to a third party with lesser 

restrictions on use, and nothing herein 

shall preclude the MLC from assisting in 

any such voluntary transfer.’’ 171 To the 

extent this language is suggested to 

clarify the ability of those outside the 

MLC to exchange information, the 

Office finds it unnecessary, and to the 

extent the language is intended to allow 

the MLC to facilitate exchange of 

otherwise confidential information to 

preferred entities for private use, it 

would seem to create an end-run around 

the limitations of the rule. 

In the NPRM, the Office noticed a 

potential alternative to the MLC’s 

proposal. The Office had considered 

whether to propose language requiring 

the MLC to offer such information 

equally to third parties, perhaps 

restricted to those offering or 

administering music licensing services, 

for a reasonable cost, i.e., both the 

MLC’s preferred vendors and others 

similarly situated in the marketplace.172

The Office noted that this approach 

would have the potential benefit of 

leveraging the unique nature of the MLC 

database in other aspects of the music 

ecosystem, without potentially affecting 

the competitive landscape in ways 

unrelated to the section 115 license.173

The MLC and NMPA, however, did not 

respond regarding this proposed 

alternative. 

After careful consideration, the 

interim rule adopts this aspect of the 

proposed rule, with the following slight 

modifications. The Office adjusted the 

interim rule so that instead of stating the 

MLC ‘‘shall not use any Confidential 

Information for any purpose other than 

determining compliance with statutory 

license requirements, royalty 

calculation, collection, matching, and 

distribution, and activities related 

directly thereto,’’ it states that the MLC 

‘‘shall not use any Confidential 

Information for any purpose other than 

the collective’s authorized functions 

under 17 U.S.C. 115(d) and activities 

related directly thereto.’’ 174 Anyone to 

whom the MLC discloses confidential 

information as permitted under the 

regulations shall not use any 

confidential information for any 

purpose other than in performing their 

duties during the ordinary course of 

their work for the mechanical licensing 

collective, with an exception for 

qualified auditors or outside counsel 

conducting statutorily-permitted audits, 

or attorneys and other authorized agents 

of parties to proceedings before federal 

courts, the Copyright Office, or the 

Copyright Royalty Judges, or when such 

disclosure is required by court order or 

subpoena. For parity, the interim rule 

adopts similar language with respect to 

the DLC and its authorized functions 

under 17 U.S.C. 115(d)(5)(C).175

C. Safeguarding Confidential 

Information 

Both the MLC and DLC proposed 

having the MLC and DLC implement 

policies and procedures to prevent 

unauthorized access and/or use of 

confidential information, an approach 

that seems necessary to effectuate the 

intent of the regulations.176

Accordingly, the proposed rule stated 

that the MLC, DLC, and recipients of 

confidential information from one of 

those entities must implement 

procedures to safeguard against 


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177 85 FR at 22565; see 37 CFR 380.5(d) 

(‘‘[SoundExchange] and any person authorized to 

receive Confidential Information from 

[SoundExchange] must implement procedures to 

safeguard against unauthorized access to or 

dissemination of Confidential Information using a 

reasonable standard of care, but no less than the 

same degree of security that the recipient uses to 

protect its own Confidential Information or 

similarly sensitive information.’’). 

178 85 FR at 22565. 

179See MLC NPRM Comment App. at v; DLC 

NPRM Comment Add. at A–4. 

180CISAC & BIEM NPRM Comment at 3. 

181See 37 CFR 380.5(d) (‘‘The Collective and any 

person authorized to receive Confidential 

Information from the Collective must implement 

procedures to safeguard against unauthorized 

access to or dissemination of Confidential 

Information using a reasonable standard of care, but 

no less than the same degree of security that the 

recipient uses to protect its own Confidential 

Information or similarly sensitive information.’’); 

id. at 380.24(e) (similar); id. at 380.34(e) (similar). 

182 85 FR at 22566. 

183MLC NPRM Comment at 21. 

184 DLC NPRM Comment at 8. 

185See 37 CFR 210.27(m) (generally requiring 

digital music providers to retain relevant records for 

seven years). 

186ARM NPRM Comment at 8–9, 14. 

187 Id. at 9. 

188 85 FR at 22565. 

189 Id. at 22566. 

190MLC NPRM Comment at 21 (‘‘[T]he MLC does 

not believe further heightened restrictions are 

necessary.’’); DLC NPRM Comment at 8 (‘‘DLC 

believes it unnecessary to create an additional 

category of ‘highly’ confidential . . .’’). 

191ARM NPRM Comment at 8. 

192 DLC Initial NOI Comment at 23. 

193 Id. 

194 DLC Ex Parte Letter #2 at 6. 

unauthorized access to or dissemination 

of confidential information using a 

reasonable standard of care, but no less 

than the same degree of security that the 

recipient uses to protect its own 

confidential information or similarly 

sensitive information.177 In addition, 

the proposed rule stated that the MLC 

and DLC shall each implement and 

enforce reasonable policies governing 

the confidentiality of its records.178

The MLC and DLC retained this 

aspect of the proposed rule in their 

suggested regulatory text.179 CISAC & 

BIEM maintain that the ‘‘reasonable 

standard of care’’ requirement is ‘‘vague 

and does not constitute a sufficient 

commitment.’’ 180 As the ‘‘reasonable 

standard of care’’ is commonly used in 

U.S. jurisprudence, and in light of a 

similar provision governing obligations 

of SoundExchange, the collective 

designated to administer the section 114 

license, this aspect of the proposed rule 

is retained without modification.181

The NPRM also sought public 

comment on whether the regulations 

should address instances of inadvertent 

unauthorized disclosure.182 The MLC 

contends that ‘‘the circumstances of 

such inadvertent disclosures, and the 

consequences of such disclosure are 

fact-specific’’ and that it should be 

afforded flexibility to establish its own 

policies to ‘‘permit the MLC to assess 

the facts and circumstances giving rise 

to the inadvertent disclosure and 

determine the most appropriate way to 

address and remedy such 

disclosure.’’ 183 Similarly, the DLC 

maintains that instances of inadvertent 

disclosure should ‘‘be addressed on a 

case-by-case basis.’’ 184 In light of these 

comments, the interim rule does not 

address inadvertent disclosures. 

D. Maintenance of Records 

The proposed rule also provided that 

any written confidentiality agreements 

relating to the use or disclosure of 

confidential information must be 

maintained and stored by the relevant 

parties for at least the same amount of 

time that certain digital music providers 

are required to maintain records of use 

pursuant to 17 U.S.C. 115(d)(4)(A)(iv). 

At the time of the NPRM, a separate 

rulemaking proposed a five-year 

retention period for such records; the 

Office subsequently adopted a sevenyear period in response to public 

comments in that proceeding.185

ARM generally supported this aspect 

of the proposed rule, but suggested an 

adjustment to require retention for a 

defined retention period of ‘‘five years 

after disclosures cease to be made 

pursuant to [the agreements].’’ 186 ARM 

suggests that any confidentiality 

agreements ‘‘should be retained until 

some years after disclosures cease to be 

made pursuant to it (such as when an 

employment relationship ends or the 

agreement is replaced by a new 

agreement).’’ 187 The Office has adopted 

ARM’s suggestion to tie retention 

requirements of confidentiality 

agreements to their dates of 

effectiveness in order to ensure they are 

retained for an appropriate period of 

time. The Office has also extended the 

retention period for two additional 

years, similar to records requirements 

imposed on digital music providers. 

Accordingly, the interim rule states that 

any written confidentiality agreements 

relating to the use or disclosure of 

confidential information must be 

maintained and stored by the relevant 

parties until at least seven years after 

disclosures cease to be made pursuant 

to them. 

E. Confidentiality Designations 

The proposed rule did not impose a 

requirement that confidential 

information must bear a designation of 

confidentiality, although the Office 

noted that the MLC or DLC could 

presumably impose such a requirement 

in their own policies.188 No commenters 

responded to this aspect of the proposed 

rule, and so the interim rule does not 

impose a designation of confidentiality 

requirement. 

Relatedly, the Office asked in the 

NPRM whether, in addition to a 

category of ‘‘Confidential Information,’’ 

the regulations should provide for a 

‘‘Highly Confidential Information’’ 

category to provide an additional layer 

of protection for certain documents and 

information.189 Neither the MLC nor 

DLC believe a heightened category of 

‘‘highly confidential’’ information is 

necessary,190 and ARM ‘‘does not have 

strong views’’ as long as the regulations 

prohibit MLC board and committee 

members and companies that employ 

MLC and DLC board members from 

accessing confidential information of 

third-party companies (including 

recorded music companies).191 Given 

these comments, and (as noted above) 

because the interim rule precludes the 

MLC from disclosing sensitive data 

concerning agreements between sound 

recording companies and digital music 

providers to members of the MLC’s 

board of directors or committees or the 

digital licensee coordinator’s board of 

directors or committees, the interim rule 

does not include a heightened category 

of ‘‘Highly Confidential Information.’’ 

F. Nondisclosure Agreements 

The MLC and DLC disagree as to 

whether DLC representatives on the 

MLC’s board of directors or committees 

should be required to sign 

nondisclosure agreements (‘‘NDAs’’) in 

their personal capacities. The DLC 

initially suggested that only the DLC as 

an organization should be bound, and 

not DLC representatives in their 

personal capacities or as representatives 

of their employers.192 Instead, the DLC 

maintained, confidentiality obligations 

for the MLC and DLC should operate at 

‘‘an organization-to-organization 

level,’’ 193 as ‘‘some companies prohibit 

[DLC representatives from] taking on 

such personal liability for actions taken 

in the scope of employment.’’ 194 The 

MLC disagreed, stating that if only the 

DLC, which lacks assets relatively, is 

bound by a confidentiality agreement, 

there would be no recourse against the 

DLC for breach, and that such a 

proposal ‘‘disincentiv[izes] individuals 

on the MLC Board and committees from 

protecting confidential information, as 


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195MLC Reply NOI Comment at 41. 

196MLC NPRM Comment at 22. 

197 Id. at 23. 

198 DLC NPRM Comment at 9. 

199 Id. 

200 85 FR at 22566. 

201See DLC NPRM Comment Ex. 1 (stating that 

information covered by the agreement ‘‘includes, 

but is not limited to personnel issues; information 

that is proprietary to, or the intellectual property of, 

the DLC or the other Member Companies; 

unpublished data and manuscripts; draft standards 

and policies; deliberations; and other information 

that has not been authorized for disclosure, has not 

become public and that is obtained through a 

Member Company’s or an individual’s relationship 

with the DLC’’). 

202One commenter suggests that the MLC make 

its form confidentiality agreement public. Castle 

NPRM Comment at 4. The MLC advised that it 

‘‘does not know whether its confidentiality 

expectations for board and committee members will 

all be captured in a template agreement,’’ but that 

‘‘as part of its ongoing and general informational 

activities, in addition to following the Office’s 

regulations as to confidential information, the MLC 

intends to provide information to the public as to 

any additional confidentiality expectations that it 

has for its board and advisory committee members, 

whether through posting template or exemplar 

agreements or otherwise identifying such 

confidentiality expectations.’’ MLC Ex Parte Letter 

#9 at 4. 

203The DLC maintained that Office’s regulations 

‘‘should be the ceiling on any confidentiality 

requirements’’ by the MLC. DLC Reply NOI 

Comment at 28. NOIS, joined by individual 

stakeholders, contended that there ‘‘must be a 

rejection of any incremental NDA put forth by the 

MLC to its board and/or committee members that 

requires anything not mandated by the MMA.’’ 

NOIS et al. Initial NOI Comment at 16. 

204 85 FR at 22566. 

205 Id. at 22568. 

206 Id. 

207MLC NPRM Comment at 17. 

208 Id. at 17–18. 

209FMC NPRM Comment at 2. 

there will be no penalty for unlawful 

disclosure.’’ 195

In the NPRM, the Office was 

disinclined to require that 

confidentiality obligations for the MLC 

and DLC operate at an organization-toorganization level. Instead, the proposed 

rule stated that the various categories of 

individuals to receive confidential 

information do so subject to an 

appropriate written confidentiality 

agreement. In response, the MLC 

‘‘believes that the current Proposed 

Regulation, which provides that any 

DLC appointee to the MLC board or 

committees must sign a confidentiality 

agreement is the appropriate 

solution.’’ 196 The MLC maintains that 

‘‘[i]f the DLC member company would 

like its employee to serve as an MLC 

board or committee member, then it can 

except the employee from such 

restriction and allow that individual to 

serve as a DLC appointee (and thus 

comply with the confidentiality 

obligations imposed on all board and 

committee members),’’ or else ‘‘identify 

an alternate appointee that can 

participate with full accountability to 

the MLC and its members.’’ 197 By 

contrast, the DLC asserts that because it 

proposes disclosing only MLC Internal 

Information to MLC and DLC board and 

committee members (as discussed 

above), the ‘‘[l]ess-sensitive nature of 

this internal MLC and DLC information 

diminishes to a substantial degree the 

rationale for imposing potential 

personal liability as a condition for 

board and committee membership.’’ 198

The DLC also notes that it has adopted 

a confidentiality policy that operates 

between itself and DLC member 

companies, which ‘‘allows the 

individual DLC representatives to share 

information and consult as needed 

within their companies, without the 

cumbersome process of requiring each 

person that is so consulted to first sign 

a confidentiality agreement with 

DLC.’’ 199

The Office recognizes that the DLC 

would prefer for DLC representatives to 

be able to easily share MLC Internal 

Information and consult as needed 

within their companies, but the Office is 

mindful that sensitive information 

regarding the MLC’s internal operations 

needs appropriate protections in place 

to prevent improper disclosure or use. 

As noted in the NPRM, binding 

individuals in their personal capacities 

provides an avenue of recourse and is a 

common practice in model protective 

orders used in the analogous context of 

preventing confidential information 

produced through litigation discovery 

from being improperly disclosed or 

misused.200 Also, the DLC’s existing 

confidentiality policy with its members 

relates to information that would likely 

fall under the definition of ‘‘DLC 

Internal Information,’’ not information 

relating to the MLC’s operations.201

Accordingly, the Office again declines 

the DLC’s proposal that confidentiality 

obligations for the MLC and DLC 

operate at an organization-toorganization level for both ‘‘confidential 

information’’ and ‘‘MLC Internal 

Information.’’ 202 The Office does not, 

however, intend to interfere with the 

DLC and its members having agreements 

at an organization-to-organization level 

to allow sharing of ‘‘DLC Internal 

Information’’ and consulting as needed 

regarding such information within their 

organization companies without having 

each individual signing an agreement in 

his or her personal capacity. 

In response to commenters’ concern 

about the MLC requiring additionally 

restrictive NDAs for its board and 

committee members,203 the proposed 

rule prevented the MLC and DLC from 

imposing additional restrictions relating 

to the use or disclosure of confidential 

information, beyond those imposed by 

the Office’s regulations, as a condition 

for participation on a board or 

committee.204 The proposed rule stated 

that ‘‘[t]he use of confidentiality 

agreements by the MLC and DLC shall 

be subject to the other provisions’’ of the 

Office’s confidentiality regulations, and 

‘‘shall not permit broader use or 

disclosure of Confidential Information 

than permitted under’’ the 

regulations.205 The proposed rule also 

stated that the MLC and DLC ‘‘may not 

impose additional restrictions relating 

to the use or disclosure of Confidential 

Information, beyond those imposed by 

this provision, as a condition for 

participation on a board or 

committee.’’206

The MLC objected to these provisions, 

contending that ‘‘[l]imiting the scope of 

the ‘appropriate written confidentiality 

agreements’ to agreements that provide 

for no more and no less than what is 

already specified in the regulation 

renders meaningless the added qualifier 

that the use or disclosure shall be made 

subject to an ‘appropriate written 

confidentiality agreement.’ ’’ 207 The 

MLC suggests that additional 

appropriate restrictions not addressed in 

the regulations—such as ‘‘provisions 

requiring that adequate notice be given 

prior to any disclosure in response to a 

subpoena or other legal process’’ or 

‘‘provid[ing] for the return or 

destruction of confidential materials on 

demand or at the end of a service 

period’’—would be ‘‘imprudent’’ not to 

include in confidentiality agreements, 

but ‘‘could be considered additional 

restrictions on use’’ beyond those in the 

Office’s regulations.208 By contrast, FMC 

supports the proposed rule, expressing 

its ‘‘appreciat[ion] that the Office has 

made it clear that the MLC cannot create 

additional restrictions on the use and 

disclosure of confidential information 

beyond the Office’s regulations,’’ which 

‘‘will help writers and composers have 

an extra degree of confidence about the 

healthy internal functioning of the MLC 

and know that board and committee 

members who have concerns would feel 

free to speak freely to impacted 

copyright owners and writers.’’ 209

The Office acknowledges that its 

regulations may not address all 

appropriate use restrictions and that 

confidentiality agreements may need to 

fill in some gaps (e.g., provisions 

regarding notice before disclosures in 

response to subpoenas or other legal 

processes, the return or destruction of 

confidential materials). The Office is 


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210The Office declines to expressly adopt the 

MLC’s proposed language that ‘‘[a]nyone receiving 

Confidential Information under this subsection may 

not further disclose such Confidential Information 

except as expressly authorized in their written 

confidentiality agreement.’’ MLC NPRM Comment 

App. at iii. 

mindful, however, that the statute 

directs the Office to promulgate 

regulations to prevent the improper use 

or disclosure of confidential information 

and that any confidentiality agreements 

should not be inconsistent with the 

Office’s regulations.210 To accommodate 

the MLC’s concerns in the context of the 

regulatory framework, the interim rule 

is adjusted so that rather than requiring 

confidentiality agreements to be in 

compliance with the Office’s 

regulations, they must not be 

inconsistent with them. This should 

afford the MLC and DLC sufficient 

flexibility, while ensuring that any 

resulting confidentiality agreements do 

not circumvent the spirit of the Office’s 

regulations. Also, because the interim 

rule prohibits the MLC and DLC from 

sharing ‘‘confidential information’’ with 

members of their boards of directors and 

committees, the interim rule removes 

the provision prohibiting the MLC and 

DLC from imposing additional 

restrictions relating to the use or 

disclosure of confidential information, 

beyond those imposed by the 

regulations, as a condition for 

participation on a board or committee. 

Should the Office learn of the MLC or 

DLC inappropriately conditioning 

disclosure of MLC Internal Information 

or DLC Internal Information, the Office 

will consider whether further 

adjustment is necessary. 

List of Subjects in 37 CFR Part 210 

Copyright, Phonorecords, Recordings. 

Interim Regulations 

For the reasons set forth in the 

preamble, the Copyright Office amends 

37 CFR part 210 as follows: 

PART 210—COMPULSORY LICENSE 

FOR MAKING AND DISTRIBUTING 

PHYSICAL AND DIGITAL 

PHONORECORDS OF NONDRAMATIC 

MUSICAL WORKS 

■ 1. The authority citation for part 210 

continues to read as follows: 

Authority: 17 U.S.C. 115, 702. 

Subpart B—Blanket Compulsory 

License for Digital Uses, Mechanical 

Licensing Collective, and Digital 

Licensee Coordinator 

■ 2. Add § 210.34 to read as follows: 

§ 210.34 Treatment of confidential and 

other sensitive information. 

(a) General. This section prescribes 

the rules under which the mechanical 

licensing collective and digital licensee 

coordinator shall ensure that 

confidential, private, proprietary, or 

privileged information received by the 

mechanical licensing collective or 

digital licensee coordinator or contained 

in their records is not improperly 

disclosed or used, in accordance with 

17 U.S.C. 115(d)(12)(C), including with 

respect to disclosure or use by the board 

of directors, committee members, and 

personnel of the mechanical licensing 

collective or digital licensee 

coordinator. 

(b) Definitions. For purposes of this 

section: 

(1) ‘‘Confidential Information’’ means 

sensitive financial or business 

information, including trade secrets or 

information relating to financial or 

business terms that could cause 

competitive disadvantage or be used for 

commercial advantage, disclosed by 

digital music providers, significant nonblanket licensees, and copyright owners 

(or any of their authorized agents or 

vendors) to the mechanical licensing 

collective or digital licensee 

coordinator. ‘‘Confidential Information’’ 

also means sensitive personal 

information, including but not limited 

to, an individual’s Social Security 

number, taxpayer identification number, 

financial account number(s), or date of 

birth. 

(i) ‘‘Confidential Information’’ 

specifically includes usage data and 

other sensitive data used to compute 

market shares when distributing 

unclaimed accrued royalties, sensitive 

data provided by digital music 

providers related to royalty calculations, 

sensitive data shared between the 

mechanical licensing collective and 

digital licensee coordinator regarding 

any significant nonblanket licensee, 

sensitive data concerning voluntary 

licenses or individual download 

licenses administered by and/or 

disclosed to the mechanical licensing 

collective, and sensitive data concerning 

agreements between sound recording 

companies and digital music providers. 

‘‘Confidential information’’ also 

includes sensitive financial or business 

information disclosed to the mechanical 

licensing collective or digital licensee 

coordinator by a third party that is 

reasonably designated as confidential by 

the party disclosing the information, 

subject to the other provisions of this 

section. 

(ii) ‘‘Confidential Information’’ does 

not include: 

(A) Information that is public or may 

be made public by law or regulation, 

including but not limited to information 

made publicly available through: 

(1) Notices of license, excluding any 

addendum that provides a description 

of any applicable voluntary license or 

individual download license the digital 

music provider is, or expects to be, 

operating under concurrently with the 

blanket license. 

(2) Notices of nonblanket activity, 

information in the public musical works 

database prescribed by 17 U.S.C. 

115(d)(3)(E), and information 

disclosable through the mechanical 

licensing collective’s bylaws, annual 

report, audit report, or the mechanical 

licensing collective’s adherence to 

transparency and accountability with 

respect to the collective’s policies or 

practices, including its anticommingling policy, pursuant to 17 

U.S.C. 115(d)(3)(D)(ii),(vii), and (ix). 

(B) Information that at the time of 

delivery to the mechanical licensing 

collective or digital licensee coordinator 

is public knowledge, or is subsequently 

publicly disclosed by the party to whom 

the information would otherwise be 

considered confidential. The party 

seeking information from the 

mechanical licensing collective or 

digital licensee coordinator based on a 

claim that the information sought is a 

matter of public knowledge shall have 

the burden of proving that fact. 

(C) Top-level compilation data 

presented in anonymized format that 

does not allow identification of such 

data as belonging to any specific digital 

music provider, significant nonblanket 

licensee, or copyright owner. 

(2) ‘‘MLC Internal Information’’ means 

sensitive financial or business 

information created by or collected by 

the mechanical licensing collective for 

purposes of its internal operations, such 

as personnel, procurement, or 

technology information. ‘‘MLC Internal 

Information’’ does not include: 

(i) Information that is public or may 

be made public by law or regulation, 

information in the public musical works 

database prescribed by 17 U.S.C. 

115(d)(3)(E), and information in the 

mechanical licensing collective’s 

bylaws, annual report, audit report, or 

the mechanical licensing collective’s 

adherence to transparency and 

accountability with respect to the 

collective’s policies or practices, 

including its anti-commingling policy, 

pursuant to 17 U.S.C. 115(d)(3)(D)(ii), 

(vii), and (ix); or 

(ii) Information that at the time of 

delivery to the mechanical licensing 

collective is public knowledge, or is 

subsequently publicly disclosed by the 


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9020 Federal Register / Vol. 86, No. 27 / Thursday, February 11, 2021 / Rules and Regulations 

party to whom the information would 

otherwise be considered confidential. 

The party seeking information from the 

mechanical licensing collective based 

on a claim that the information sought 

is a matter of public knowledge shall 

have the burden of proving that fact. 

(3) ‘‘DLC Internal Information’’ means 

sensitive financial or business 

information created by or collected by 

the digital licensee coordinator for 

purposes of its internal operations, such 

as personnel, procurement, or 

technology information. ‘‘DLC Internal 

Information’’ does not include: 

(i) Information that is public or may 

be made public by law or regulation, 

information in the public musical works 

database prescribed by 17 U.S.C. 

115(d)(3)(E), and information 

disclosable through the digital licensee 

coordinator’s bylaws; or 

(ii) Information that at the time of 

delivery to the digital licensee 

coordinator is public knowledge, or is 

subsequently publicly disclosed by the 

party to whom the information would 

otherwise be considered confidential. 

The party seeking information from the 

digital licensee coordinator based on a 

claim that the information sought is a 

matter of public knowledge shall have 

the burden of proving that fact. 

(c) Disclosure of Confidential 

Information. (1) The mechanical 

licensing collective shall limit 

disclosure of Confidential Information 

to employees, agents, consultants, 

vendors, and independent contractors of 

the mechanical licensing collective who 

are engaged in the collective’s 

authorized functions under 17 U.S.C. 

115(d) and activities related directly 

thereto and who require access to 

Confidential Information for the 

purpose of performing their duties 

during the ordinary course of their work 

for the mechanical licensing collective, 

subject to an appropriate written 

confidentiality agreement. The 

mechanical licensing collective shall 

not disclose Confidential Information to 

members of the mechanical licensing 

collective’s board of directors and 

committees, including the collective’s 

Unclaimed Royalties Oversight 

Committee, or the digital licensee 

coordinator’s board of directors or 

committees. 

(2) Notwithstanding paragraph (c)(1) 

of this section, the mechanical licensing 

collective shall be permitted to fulfill its 

disclosure obligations under section 115 

including, but not limited to: 

(i) Providing monthly reports to the 

digital licensee coordinator setting forth 

any significant nonblanket licensees of 

which the collective is aware that have 

failed to comply with the Office’s 

regulations regarding submission of a 

notice of nonblanket activity for 

purposes of notifying the mechanical 

licensing collective that the licensee has 

been engaging in covered activities, or 

regarding the delivery of reports of 

usage for the making and distribution of 

phonorecords of nondramatic musical 

works; and 

(ii) Preparing and delivering royalty 

statements to musical work copyright 

owners that include the minimum 

information required in accordance with 

37 CFR 210.29(c), but without including 

additional Confidential Information that 

does not relate to the recipient copyright 

owner or relevant songwriter. Once a 

copyright owner receives a royalty 

statement from the mechanical licensing 

collective, there are no restrictions on 

the copyright owner’s ability to use the 

statement or disclose its contents. 

(A) Members of the mechanical 

licensing collective’s board of directors 

and committees shall not have access to 

musical work copyright owners’ royalty 

statements, except where a copyright 

owner discloses their own royalty 

statement to the members of the 

mechanical licensing collective’s board 

of directors or committees. 

Notwithstanding this paragraph, 

members of the mechanical licensing 

collective’s board and committees are 

not restricted in accessing their own 

royalty statements from the mechanical 

licensing collective. 

(B) The digital licensee coordinator, 

including members of the digital 

licensee coordinator’s board of directors 

and committees, shall not have access to 

musical work copyright owners’ royalty 

statements, except where a copyright 

owner discloses their own royalty 

statement to the mechanical licensing 

collective’s board of directors or 

committees. 

(3) The digital licensee coordinator 

shall limit disclosure of Confidential 

Information to employees, agents, 

consultants, vendors, and independent 

contractors of the digital licensee 

coordinator who are engaged in the 

digital licensee coordinator’s authorized 

functions under 17 U.S.C. 115(d)(5)(C) 

and activities related directly thereto 

and require access to Confidential 

Information for the purpose of 

performing their duties during the 

ordinary course of their work for the 

digital licensee coordinator, subject to 

an appropriate written confidentiality 

agreement. The digital licensee 

coordinator shall not disclose 

Confidential Information to members of 

the digital licensee coordinator’s board 

of directors and committees, or the 

mechanical licensing collective’s board 

of directors or committees. 

(4) In addition to the permitted 

disclosure of Confidential Information 

in this paragraph (c), the mechanical 

licensing collective and digital licensee 

coordinator may disclose Confidential 

Information to: 

(i) A qualified auditor or outside 

counsel, pursuant to 17 U.S.C. 

115(d)(4)(D), who is authorized to act on 

behalf of the mechanical licensing 

collective with respect to verification of 

royalty payments by a digital music 

provider operating under the blanket 

license, subject to an appropriate 

written confidentiality agreement; 

(ii) A qualified auditor or outside 

counsel, pursuant to 17 U.S.C. 

115(d)(3)(L), who is authorized to act on 

behalf of a copyright owner or group of 

copyright owners with respect to 

verification of royalty payments by the 

mechanical licensing collective, subject 

to an appropriate written confidentiality 

agreement; and 

(iii) Attorneys and other authorized 

agents of parties to proceedings before 

federal courts, the Copyright Office, or 

the Copyright Royalty Judges, or when 

such disclosure is required by court 

order or subpoena, subject to an 

appropriate protective order or 

agreement. 

(5) With the exception of persons 

receiving information pursuant to 

paragraph (c)(4) of this section, anyone 

to whom the mechanical licensing 

collective or digital licensee coordinator 

discloses Confidential Information as 

permitted in section shall not disclose 

such Confidential Information to anyone 

else except as expressly permitted in 

this section. 

(d) Use of Confidential Information. 

(1) The mechanical licensing collective 

shall not use any Confidential 

Information for any purpose other than 

the collective’s authorized functions 

under 17 U.S.C. 115(d) and activities 

related directly thereto. Anyone to 

whom the mechanical licensing 

collective discloses Confidential 

Information as permitted in this section 

shall not use any Confidential 

Information for any purpose other than 

in performing their duties during the 

ordinary course of their work for the 

mechanical licensing collective or as 

otherwise permitted under paragraph 

(c)(4) of this section. 

(2) The digital licensee coordinator 

shall not use any Confidential 

Information for any purpose other than 

its authorized functions under 17 U.S.C. 

115(d)(5)(C) and activities related 

directly thereto. Anyone to whom the 

digital licensee coordinator discloses 

Confidential Information as permitted in 

this section shall not use any 

Confidential Information for any 


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Federal Register / Vol. 86, No. 27 / Thursday, February 11, 2021 / Rules and Regulations 9021 

purpose other than in performing their 

duties during the ordinary course of 

their work for the digital licensee 

coordinator or as otherwise permitted 

under paragraph (c)(4) of this section. 

(e) Disclosure and Use of MLC 

Internal Information and DLC Internal 

Information. (1) The mechanical 

licensing collective may disclose MLC 

Internal Information to members of the 

mechanical licensing collective’s board 

of directors and committees, including 

representatives of the digital licensee 

coordinator who serve on the board of 

directors or committees of the 

mechanical licensing collective, subject 

to an appropriate written confidentiality 

agreement. The MLC may also disclose 

MLC Internal Information to other 

individuals in its discretion, subject to 

the adoption of reasonable 

confidentiality policies. 

(2) Representatives of the digital 

licensee coordinator who serve on the 

board of directors or committees of the 

mechanical licensing collective and 

receive MLC Internal Information may 

share such MLC Internal Information 

with the following persons: 

(i) Employees, agents, consultants, 

vendors, and independent contractors of 

the digital licensing coordinator who 

require access to MLC Internal 

Information for the purpose of 

performing their duties during the 

ordinary course of their work for the 

digital licensee coordinator, subject to 

an appropriate written confidentiality 

agreement; 

(ii) Individuals serving on the board 

of directors and committees of the 

digital licensee coordinator or 

mechanical licensing collective who 

require access to MLC Internal 

Information for the purpose of 

performing their duties during the 

ordinary course of their work for the 

digital licensee coordinator or 

mechanical licensing collective, subject 

to an appropriate written confidentiality 

agreement; 

(iii) Individuals otherwise employed 

by members of the digital licensee 

coordinator who require access to MLC 

Internal Information for the purpose of 

performing their duties during the 

ordinary course of their work for the 

digital licensee coordinator, subject to 

an appropriate written confidentiality 

agreement. 

(3) The digital licensee coordinator 

may disclose DLC Internal Information 

to the following persons: 

(i) Members of the digital licensee 

coordinator’s board of directors and 

committees, subject to an appropriate 

written confidentiality agreement; and 

(ii) Members of the mechanical 

licensing collective’s board of directors 

and committees, including music 

publisher representatives, songwriters, 

and representatives of the digital 

licensee coordinator who serve on the 

board of directors or committees of the 

mechanical licensing collective, subject 

to an appropriate written confidentiality 

agreement. 

(iii) The DLC may also disclose DLC 

Internal Information to other 

individuals in its discretion, subject to 

the adoption of reasonable 

confidentiality policies. 

(f) Safeguarding Confidential 

Information. The mechanical licensing 

collective, digital licensee coordinator, 

and any person or entity authorized to 

access Confidential Information from 

either of those entities as permitted in 

this section, must implement 

procedures to safeguard against 

unauthorized access to or dissemination 

of Confidential Information using a 

reasonable standard of care, but no less 

than the same degree of security that the 

recipient uses to protect its own 

Confidential Information or similarly 

sensitive information. The mechanical 

licensing collective and digital licensee 

coordinator shall each implement and 

enforce reasonable policies governing 

the confidentiality of their records, 

subject to the other provisions of this 

section. 

(g) Maintenance of records. Any 

written confidentiality agreements 

relating to the use or disclosure of 

Confidential Information must be 

maintained and stored by the relevant 

parties until at least seven years after 

disclosures cease to be made pursuant 

to them. 

(h) Confidentiality agreements. The 

use of confidentiality agreements by the 

mechanical licensing collective and 

digital licensee coordinator shall not be 

inconsistent with the other provisions of 

this section. 

Dated: February 8, 2021. 

Shira Perlmutter, 

Register of Copyrights and Director of the 

U.S. Copyright Office. 

Approved by: 

Carla D. Hayden, 

Librarian of Congress. 

[FR Doc. 2021–02913 Filed 2–9–21; 4:15 pm] 

BILLING CODE 1410–30–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 62 

[EPA–R01–OAR–2020–0593; FRL–10017– 

79–Region 1] 

Approval and Promulgation of State 

Plans (Negative Declarations) for 

Designated Facilities and Pollutants: 

Maine and Rhode Island 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Direct final rule. 

SUMMARY: The Environmental Protection 

Agency (EPA) is taking a direct final 

action to approve negative declarations 

submitted in lieu of State plans to 

satisfy the requirements of the Emission 

Guidelines and Compliance Times for 

Municipal Solid Waste Landfills for the 

State of Maine and the State of Rhode 

Island. The negative declarations certify 

that there are no existing facilities in the 

States that must comply with this rule. 

DATES: This direct final rule will be 

effective April 12, 2021 without further 

notice, unless the EPA receives adverse 

comments by March 15, 2021. If the 

EPA receives adverse comments, we 

will publish a timely withdrawal of the 

direct final rule in the Federal Register 

informing the public that the rule will 

not take effect. 

ADDRESSES: Submit your comments, 

identified by Docket ID No. EPA–R01– 

OAR–2020–0593 at https://

www.regulations.gov, or via email to 

kilpatrick.jessica@epa.gov. For 

comments submitted at Regulations.gov, 

follow the online instructions for 

submitting comments. Once submitted, 

comments cannot be edited or removed 

from Regulations.gov. For either manner 

of submission, the EPA may publish any 

comments received to its public docket. 

Do not submit electronically any 

information you consider to be 

Confidential Business Information (CBI) 

or other information whose disclosure is 

restricted by statute. Multimedia 

submissions (audio, video, etc.) must be 

accompanied by a written comment. 

The written comment is considered the 

official comment and should include 

discussion of all points you wish to 

make. The EPA will generally not 

consider comments or comment 

contents located outside of the primary 

submission (i.e., on the web, cloud, or 

other file sharing system). For 

additional submission methods, please 

contact the person identified in the FOR

FURTHER INFORMATION CONTACT section. 

For the full EPA public comment policy, 

information about CBI or multimedia 

submissions, and general guidance on 


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