Protection of Confidential Information by the Mechanical Licensing Collective and Digital Licensee Coordinator

Pursuant to the Musical Works Modernization Act, title I of the Orrin G. Hatch–Bob Goodlatte Music Modernization Act (MMA), the Copyright Office has issued an interim rule related to the protection of confidential information by the mechanical licensing collective (MLC) and digital licensee coordinator (DLC).

The MMA directs the Copyright Office to issue regulations providing for appropriate procedures to ensure that confidential, private, proprietary, or privileged information contained in the records of the MLC and DLC 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 MLC.

As part of fulfilling its obligations under the blanket license regime, the MLC will receive competitively sensitive information from certain digital music providers and copyright owners (e.g., information regarding voluntary licenses, agreements between sound recording companies and digital music providers). After soliciting public comments through a notification of inquiry and a notice of proposed rulemaking and engaging in numerous ex parte communications with commenters as documented here, the Office issued an interim rule on February 11, 2021, to create various restrictions on the disclosure and use of confidential information by the MLC and DLC, as well as their employees, agents, consultants, vendors, and independent contractors and members of their boards of directors and committees. The rule also creates categories of “MLC Internal Information” and “DLC Internal Information” to separately address the use and disclosure of sensitive financial or business information about the MLC’s and DLC’s internal operations (as opposed to confidential information disclosed to the MLC and DLC by third parties).

The rule becomes effective March 15, 2021.