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Federal Register / Vol. 86, No. 27 / Thursday, February 11, 2021 / Rules and Regulations
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ordinary course of their work for the digital licensee coordinator, subject to an appropriate written confidentiality agreement. The interim rule also states that the digital licensee coordinator shall not disclose confidential information to members of the digital licensee coordinators board of directors or committees, or the mechanical licensing collectives board of directors or committees. Recipients of confidential information from the DLC
shall not disclose such confidential information to anyone else except as expressly permitted in the Offices regulations, with an exception for qualified auditors or outside counsel conducting statutorily-permitted audits, or attorneys and other authorized agents of parties to proceedings before federal courts, the Copyright Office, or the Copyright Royalty Judges, or when such disclosure is required by court order or subpoena discussed below.
Notwithstanding the above restrictions, the interim rule clarifies that the mechanical licensing collective shall continue to fulfill its disclosure obligations under section 115 including, but not limited to, delivering royalty statements to copyright owners 139 and providing monthly reports to the digital licensee coordinator identifying any significant nonblanket licensees that are not in compliance with the Offices regulations regarding notices of nonblanket activity and reports of usage for the making and distribution of phonorecords of nondramatic musical works.140 Because royalty statements could be confidential to copyright owners themselves, and given the MLCs suggestion that regulations should prohibit disclosure of confidential information regarding a particular, identified copyright owner to other copyright owners including their agents or representatives or songwriters, 141 the interim rule states that members of the MLCs board of directors or committees shall not have access to other musical work copyright owners royalty statements, except where a copyright owner discloses its own statement to such bodies.142 For parity, the digital licensee coordinator, including members of the digital licensee coordinators board of directors or committees, shall be similarly restricted. Under the rule, members of the mechanical licensing collectives 139 See
id. at 210.29c.
17 U.S.C. 115d6A; 37 CFR 210.25; id.
at 210.28.
141 MLC NPRM Comment at 19.
142 See id., App. at iii proposing that no copyright owners or songwriters should have access to confidential information of other copyright owners.
140 See
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board and committees are not, however, restricted in accessing their own royalty statements from the mechanical licensing collective.
Disclosure of MLC Internal Information and DLC Internal Information As proposed by the DLC, the interim rule also incorporates MLC Internal Information as a category of information that can be shared with the MLC board of directors and committees, including representatives of the DLC, subject to an appropriate written confidentiality agreement.143 To ensure that MLC Internal Information does not extend to sensitive business and financial information disclosed by DMPs, copyright owners, and significant nonblanket licensees to the MLC i.e., confidential information, the interim rule defines MLC Internal Information as sensitive financial or business information created by or collected by the mechanical licensing collective for purposes of its internal operations, such as personnel, procurement, or technology information.144 Under the interim rule, MLC Internal Information excludes information that is public or may be made public by various avenues, similar to the regulatory definition of Confidential Information. 145 In addition, the interim rule creates a corresponding category of DLC Internal Information.
Because MLC Internal Information and DLC Internal Information do not relate to sensitive business information disclosed by DMPs, significant nonblanket licensees, or copyright owners, the rule does not impose strict disclosure requirements as it does with confidential information due to the less-sensitive nature of these information categories. Rather, the rule creates categories of individuals to whom the MLC and DLC may disclose MLC Internal Information and/or DLC Internal Information subject to a confidentiality agreement, which gives the MLC and DLC some flexibility if 143 See DLC NOI Initial Comment at 23 DLC
representatives are thus meant to represent the entire digital licensee community, and should be able to share information among DLC
membership.; see also id. at 28.
144 See DLC Ex Parte Letter 6 at 7 including disciplinary files for personnel, or competing vendor bids as examples of MLC Internal Information.
145 The definition of MLC Internal Information does not, as proposed by the DLC, exclude top level, compilation data presented in anonymized format that does not allow identification of such data as belonging to any specific digital music provider, significant nonblanket licensee, or copyright owner. See DLC Ex Parte Letter 8 at 5.
By definition, MLC Internal Information is restricted to information regarding the MLCs internal operations.

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they decide additional disclosure is necessary. The rule also states that the MLC may disclose MLC Internal Information to other individuals in its discretion, subject to the adoption of reasonable confidentiality policies. The rule contains a parallel provision for the DLC and DLC Internal Information.
Specifically, the interim rule states that the MLC may disclose MLC Internal Information to members of the MLCs board of directors and committees, including representatives of the DLC
who serve on the MLCs board of directors or committees. The interim rule also states that representatives of the DLC who serve on the board of directors or committees of the mechanical licensing collective and receive MLC Internal Information may share such MLC Internal Information with the following persons, who require access to such information for the purpose of performing their duties during the ordinary course of their work for the DLC, subject to an appropriate written confidentiality agreement:
Employees, agents, consultants, vendors, and independent contractors of the DLC;
Individuals serving on the board of directors or committees of the DLC or MLC; and Individuals otherwise employed by members of the DLC.
Under the interim rule, the DLC may disclose DLC Internal Information to the following persons, subject to an appropriate written confidentiality agreement:
Members of the DLCs board of directors and committees; and Members of the MLCs board of directors and committees.
ii. Disclosure of Confidential Information to Non-Mechanical Licensing Collective and Non-Digital Licensee Coordinator Persons and Entities The proposed rule allowed disclosure of confidential information to attorneys and other authorized agents of parties to proceedings before federal courts, the Office, or the Copyright Royalty Judges, or when such disclosure is required by court order or subpoena, subject to an appropriate protective order or agreement.146 The proposed rule also permitted disclosure to qualified auditors or outside counsel pursuant to the statutorily-permitted audits by the MLC of a digital music provider operating under the blanket license or audits by copyright owners of the MLC.
No commenter objected to these provisions, and the MLC, DLC, and 146 85

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FR at 22568.

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