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Federal Register / Vol. 86, No. 27 / Thursday, February 11, 2021 / Rules and Regulations 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. 202028943 Filed 21021; 8:45 am BILLING CODE 635101P

LIBRARY OF CONGRESS
Copyright Office 37 CFR Part 210
Docket No. 20207

Treatment of Confidential Information by the Mechanical Licensing Collective and the Digital Licensee Coordinator U.S. Copyright Office, Library of Congress.
ACTION: Interim rule.
AGENCY:

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
7078350.
SUPPLEMENTARY INFORMATION:
SUMMARY:

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I. Background
Law 115264, 132 Stat. 3676 2018.

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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 Offices 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 2 84

On October 11, 2018, the president signed into law the Orrin G. HatchBob 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 1 Public
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

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FR 32274 July 8, 2019.
U.S.C. 115d3CiV.
4 Id. at 115d3CiIV.
5 Id. at 115d5B; 84 FR 32274 July 8, 2019;
see also 17 U.S.C. 115d3DiIV, d5C.
6 17 U.S.C. 115d12C.
7 Id. at 115d3Mi 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 12C for 3 17

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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 MLCs 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 publics interest with the need to let the new collective operate without over-regulation. 17
Congress acknowledged that although 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 the Office is expected to use its best judgement in determining the a period of not less than 7 years after the date of creation or receipt, whichever occurs later..
8 Id. at 115d3JiIIbb.
9 Id. at 115d6Bii.
10 Id. at 115d11Ciii.
11 Id. at 115d3LiII.
12 Id. at 115d4DiII.
13 H.R. Rep. No. 115651, at 56 2018; S. Rep.
No. 115339, 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. 115d12A.
15 H.R. Rep. No. 115651, at 56, 14; S. Rep. No.
115339, at 5, 15; Conf. Rep. at 4, 12. The Conference Report further contemplates that the Offices 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. 115d3DixIaa.
17 H.R. Rep. No. 115651, at 56, 14; S. Rep. No.
115339, at 5, 15; Conf. Rep. at 4, 12.

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