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Federal Register / Vol. 86, No. 27 / Thursday, February 11, 2021 / Rules and Regulations
appropriate steps in those situations. 18
Legislative history further states that the Copyright Office has the knowledge and expertise regarding music licensing through its past rulemakings and recent assistance to the Committees 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

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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 MLCs 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 MLCs 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 18 H.R. Rep. No. 115651, at 14; S. Rep. No. 115
339, at 15; Conf. Rep. at 12.
19 H.R. Rep. No. 115651, 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-2019-00020001 and comments received in response to the notice of proposed rulemaking are available at https beta.regulations.gov/document/COLC-20200004-0001. 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.
22 See MLC Initial NOI Comment at 2930, App.
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DLC. 23 The DLC maintained that the Offices 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 Offices approach in distinguishing what is commonly thought of as generic confidential information and what ought to be confidential information for the DLC, the MLC, their respective vendors and in particular the MLCs 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 23 DLC

Reply NOI Comment at 27.
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.
28 MLC NPRM Comment at 2.
29 Castle NPRM Comment at 1.
24 See
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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 Congresss 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 30 See, e.g., 17 U.S.C. 115d3E, e20; id. at 115d3Ev 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..
31 See 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.

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