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Federal Register / Vol. 86, No. 42 / Friday, March 5, 2021 / Rules and Regulations
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115d1Ci from each place where it appears in the proposal.42 The DLC
characterized the language as simply reiterating the principle expressed in section 115d1Ci, and the MLC
said it sees this language to be in the nature of for the avoidance of doubt language. 43 The MLC explained that the reason for the language is so that DMPs understand clearly that where they identify pass-through licenses at the sound recording level, then their blanket license coverage is also excluded at the sound recording level. 44 The MLC noted that if the Office was to clarify that operation of voluntary license identification elsewhere, then the queried language would be less important. 45
In light of these points, the proposed language appears to be unnecessary. It also seems somewhat ambiguous, and could potentially be construed as suggesting that there may be types of voluntary licenses authorizing DMPs to make and distribute permanent downloads that do not apply to the exclusion of the blanket license, which the MLC and DLC state is not the intention of the language.46 To clarify, as the MLC requests, the Office accepts the common sense reading of section 115d1Ci that musical works or shares thereof are only excluded from the blanket license to the extent a voluntary license or individual download license applies. 47 In other words, the scope of the exclusion from the blanket license corresponds to the scope of the alternative license authority. For example, a pass-through license for making permanent downloads of a particular sound recording of a musical work would only exclude the musical work as embodied in that specific sound recording and used in that specific DPD configuration;
it would not exclude the musical work as embodied in other sound recordings or as used in other DPD configurations like interactive streams that are not part of that pass-through license authority which could be separately excluded by other licenses.
The DLCs proposal also included a provision that explicitly acknowledges that the MLC may report to copyright owners regarding usage of their musical works that a DMP identified as covered 42 See DLC & MLC Ex Parte Letter add. B at 2, 3, 10 Dec. 9, 2020.
43 DLC Supplemental Interim Rule Comment at 5;
MLC Supplemental Interim Rule Comment at 2.
44 MLC Supplemental Interim Rule Comment at 2.
45 Id. at 3.
46 See DLC Supplemental Interim Rule Comment at 5; MLC Supplemental Interim Rule Comment at 2.
47 See 17 U.S.C. 115d1Ci.

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by pass-through licenses. 48 The MLC
explains that it believes that it can substantially advance transparency by doing this, as it would for the first time in the industry, give copyright owners an independent record of download store usage that copyright owners can use to verify their royalty accountings from record labels for mechanical licenses that were passed through to DMPs. 49 The rule includes this unopposed provision, as it further serves the transparency aims of the MMA.
In addition to adopting the modified DLC proposal, this supplemental interim rule updates the December 2020
rule by providing that the temporary reporting exception the Office had adopted while it noticed this topic for public comment and considered the issue more thoroughly shall be retired as of the effective date of the new provisions now being adopted.
Beneficiaries of the temporary exception are reminded that in order to retain the protection of the exception, they must comply with the new supplemental interim rule by reporting the required information to the MLC within 45 days after the rules effective date.
List of Subjects in 37 CFR Part 210
Copyright, Phonorecords, Recordings.
Interim Regulations
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.

2. Amend 210.24 as follows:
a. Remove or individual download license each place it appears;
b. In paragraph b8 introductory text, add a sentence after the second sentence; and c. Add paragraph b9.
The additions read as follows:

Notices of blanket license.

b
8 This paragraph b8 does not apply to any authority obtained by a digital music provider from licensors 48 MLC Supplemental Interim Rule Comment at 3;
DLC & MLC Ex Parte Letter add. B at 17 Dec. 9, 2020.
49 MLC Supplemental Interim Rule Comment at 3.

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3. Amend 210.25 by revising paragraph b6 to read as follows:

210.25

For the reasons set forth in the preamble, the Copyright Office amends 37 CFR part 210 as follows:

210.24

of sound recordings to make and distribute permanent downloads of musical works embodied in such sound recordings pursuant to an individual download license or voluntary license.

9 A description of the extent to which the digital music provider is operating under authority obtained from licensors of sound recordings to make and distribute permanent downloads of musical works embodied in such sound recordings pursuant to an individual download license or voluntary license.
Such description may indicate that such authority exists for all permanent downloads. Otherwise, such description shall include a list of all sound recordings for which the digital music provider has obtained such authority from the respective sound recording licensors, or a list of any applicable catalog exclusions where the digital music provider indicates that such authority otherwise exists for all permanent downloads. Such description shall also include an identification of the digital music providers covered activities operated under such authority.

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Notices of nonblanket activity.

b
6 Acknowledgement of whether the significant nonblanket licensee is operating under authority obtained from licensors of sound recordings to make and distribute permanent downloads of musical works embodied in such sound recordings pursuant to an individual download license or voluntary license.
Where such authority does not cover all permanent downloads made available on the service, the significant nonblanket licensee shall maintain with the mechanical licensing collective a list of all sound recordings for which it has obtained such authority from the respective sound recording licensors, or a list of any applicable catalog exclusions where the significant nonblanket licensee indicates that such authority otherwise exists for all permanent downloads.

4. Amend 210.27 as follows:
a. Revise paragraph c5; and b. In paragraph g2ii, add a sentence at the end of the paragraph.
The revision and addition read as follows:

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