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Federal Register / Vol. 86, No. 27 / Thursday, February 11, 2021 / Rules and Regulations
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maintains that, for example, the provision of the proposed rule intending to prevent the MLC and DLC from imposing use and disclosure restrictions on their board members in addition to those contemplated by the regulations may not achieve its intended effect if the MLCs own confidential information is not included in the defined term Confidential Information as to the MLC. 92 ARM contends that the principle of not restricting an entitys use or disclosure of its own confidential information is typically accomplished in nondisclosure agreements by carefully drafting the substantive provisions so as to limit disclosure and use of other entities confidential information, rather than ones own, and that seems like a preferable approach here. 93 Though not expressly commenting on this issue, in its proposed regulatory language the DLC
excludes the paragraph referencing use of a partys own documents or information.94 For its part, the MLC
suggests revising the paragraph to documents or information concerning a party, to the extent such party authorizes the usage of such documents or information. 95
The Office has adjusted the interim rule to remove the paragraph referencing documents or information created by a party from the definition of confidential information. Because the definition of confidential information has been revised to mean sensitive financial or business information disclosed by digital music providers, significant non-blanket licensees, or copyright owners or any of their authorized agents or vendors to the MLC or DLC, and because the rule clearly restricts use and disclosure of such information by the MLC and DLC
as discussed below, this paragraph is no longer necessary. As described below, the Office has also adopted provisions relating to the confidentiality of MLC and DLC internal information.
Should the Office learn of instances where a party is prevented from using or disclosing its own confidential information under the regulations, the Office will consider any necessary adjustments.

B. Disclosure and Use of Confidential Information 1. Proposed Rules Approach to Disclosure and Use of Confidential Information The proposed rule included various categories of permitted disclosure and use by MLC and DLC employees, board and committee members of the MLC and DLC and their respective employers, and vendors and agents of the MLC and DLC. Given the somewhat divergent views from the MLC and DLC in response to the NOI, and the need for regulatory language to accommodate unforeseen issues, the proposed rule was intended to provide parity in access to confidential information, rather than hard and fast categories prohibiting disclosure of information relevant to, or accessed by, digital music providers or music publishers.96 The proposed rule permitted the following disclosures, while requiring all individuals receiving confidential information to execute a written confidentiality agreement: 97
Employees of the MLC or DLC may receive confidential information.
Agents, consultants, vendors, and independent contractors of the MLC or DLC may receive confidential information, only when necessary to carry out their duties.
Other individuals authorized by the MLC may receive confidential information, but only to the extent necessary for such persons to know such information and only when necessary for the MLC to perform its duties.
Non-DLC members of the MLCs board or statutory committees as well as DLC representatives on the MLCs board or statutory committees may receive confidential information only on a needto-know basis and to the extent necessary to carry out their duties.
The MLC and DLC may disclose confidential information to qualified auditors or outside counsel under the statutorily-permitted audits.98
The MLC and DLC may disclose confidential information to the Office, Copyright Royalty Board, and federal courts by parties to their proceedings, or when such disclosure is required by court order or subpoena, subject to an appropriate protective order.
DLC representatives who serve on the board of directors or committees of 96 See
85 FR at 22564.
FR at 22567.
98 The MMA expressly permits audits by copyright owners of the MLCs books, records, and data, 17 U.S.C. 115d3LiII, and by the MLC
of digital music providers books, records, and data, id. at 115d4DiII.
97 85

92 Id.
93 Id.
94 DLC
95 MLC

NPRM Comment Add. at A2.
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the MLC may share confidential information with individuals:
Serving on the board of directors and committees of the DLC, but only to the extent necessary for such persons to know such information and only when necessary to carry out their duties for the DLC.
Employed by DLC members, only to the extent necessary for such persons to know such information and for the DLC
to perform its duties.
The proposed rule included the following use restrictions for confidential information: 99
The MLC, including its employees, agents, consultants, vendors, independent contractors, and non-DLC
members of the MLC board of directors or committees, shall not use any confidential information for any purpose under than for section 115
activities for the MLC.100
The DLC, including its employees, agents, consultants, vendors, independent contractors, members of the DLC board of directors or committees, and DLC representatives serving on the board of directors or committees of the MLC, shall not use any confidential information for any purpose other than section 115 activities for the DLC.101
Individuals employed by DLC
members who receive confidential information from DLC representatives would be prohibited from using confidential information for any purpose other than for work performed during the ordinary course of business for the DLC or MLC.
2. Interim RuleDisclosure of Confidential Information Comments in response to disclosure requirements under the proposed rule were mixed. As discussed below, the DLC objected to this aspect of the proposed rule, maintaining that members of the MLCs board of directors and committees should not have access to DMP-specific information relating to sensitive financial or business information. By contrast, the MLC
99 85

FR at 22567.
specific provision stated that they shall not use any Confidential Information for any purpose other than determining compliance with statutory license requirements, royalty calculation, collection, matching, and distribution, and activities related directly thereto, in performing their duties during the ordinary course of their work for the MLC. Id.
101 The specific provision stated that they shall not use any Confidential Information for any purpose other than determining compliance with statutory license requirements, royalty calculation, collection, matching, and distribution, and activities related directly thereto, in performing their duties during the ordinary course of their work for the DLC. Id.
100 The
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