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Federal Register / Vol. 86, No. 27 / Thursday, February 11, 2021 / Rules and Regulations
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 the 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 MLCs online database, and information disclosable through the MLC bylaws, annual report, audit report, or the MLCs 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.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, 39 Id.;

DLC Reply Add. at A20.
FR at 22562.
41 Consistent with the Offices 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. 115d3GiIbb. 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
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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 providers operations and performance. 46 The DLC asserts that if 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 copyright 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 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. A1.
46 Id. at 4.
47 Id.
48 Id.
49 Id. at 5.

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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
seeking 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, information 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 210.29c1vi. 53 The MLC
also proposes that the MLC and the DLC may disclose Confidential Information to copyright owners, including their agents, whose works were used in covered activities, in connection with royalty payments and statements. 54
50 Id.
51 SONA NPRM Comment at 4 Royalty 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 The 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 The 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.
52 MLC 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 The 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..
53 MLC NPRM Comment App. at ii.
54 Id. at iv.

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