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Federal Register / Vol. 86, No. 27 / Thursday, February 11, 2021 / Rules and Regulations 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 Offices regulations.210 To accommodate the MLCs 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 Offices 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 Offices 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 210COMPULSORY 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.

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Subpart BBlanket Compulsory License for Digital Uses, Mechanical Licensing Collective, and Digital Licensee Coordinator

2. Add 210.34 to read as follows:

210 The Office declines to expressly adopt the MLCs proposed language that anyone 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.

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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. 115d12C, 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 individuals Social Security number, taxpayer identification number, financial account numbers, 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:

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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.
115d3E, and information disclosable through the mechanical licensing collectives bylaws, annual report, audit report, or the mechanical licensing collectives adherence to transparency and accountability with respect to the collectives policies or practices, including its anticommingling policy, pursuant to 17
U.S.C. 115d3Dii,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.
115d3E, and information in the mechanical licensing collectives bylaws, annual report, audit report, or the mechanical licensing collectives adherence to transparency and accountability with respect to the collectives policies or practices, including its anti-commingling policy, pursuant to 17 U.S.C. 115d3Dii, 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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