MLC Board Letter
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U.S. COPYRIGHT OFFICE LIBRARY OF CONGRESS Designation of Mechanical Licensing Collective and Digital Licensee Docket No. 2018-11 Coordinator DESIGNATION PROPOSAL OF MECHANICAL LICENSING COLLECTIVE, a Delaware nonprofit corporation PRYOR CASHMAN LLP Frank P. Scibilia Benjamin K. Semel 7 Times Square New York, New York 10036-6569 Attorneys for Mechanical Licensing Collective March 21, 2019 Karyn A. Temple Acting Register of Copyrights and Director of the U.S. Copyright Office Library of Congress 101 Independence Ave SE Washington, DC 20540 Dear Ms. Temple, We the undersigned are the Board of Directors (the “Board”) of Mechanical Licensing Collective (“MLC”), a Delaware nonstock nonprofit corporation that was created by musical work copyright owners to carry out the responsibilities of the mechanical licensing collective (the “collective”) under the Music Modernization Act (the “MMA”). We submit this proposal for the designation of MLC as the collective. We are committed to faithfully serving all copyright owners and the entirety of the songwriting and music publishing industries. We take our positions of leadership at MLC seriously, and are honored to serve. We appreciate the importance of the work of the collective, and we do not underestimate what will be required of us. We understand and acknowledge that we each have duties of care, loyalty and obedience to the statutory mission of the collective. We understand that we must disclose all actual or potential conflicts of interest, and we will promulgate and abide by written policies addressing conflicts and ensuring best practices in governance. We appreciate that in serving MLC, we act not in our personal interests or the interests of related parties, but rather solely in the interests of MLC. As instructed by the MMA, four of us are professional songwriters who have retained and exercise exclusive rights of reproduction and distribution with respect to Section 115 covered activities (i.e., the making of digital phonorecord deliveries of musical works) for musical works we have authored. Ten of us are representatives of music publishers to which songwriters have assigned exclusive rights of reproduction and distribution of musical works with respect to Section 115 covered activities. Two of us are non-voting board members representing music publishing and songwriter trade organizations. (A representative of licensees will join as a third nonvoting board member pursuant to Section 115(d)(3)(D)(i)(IV).) MLC can be contacted through our legal counsel on this proposal, and we are available to answer questions or provide additional information at your request. Respectfully submitted, The Board of Directors of MLC (signature page follows) Table of Contents of Proposal Section A: Summary Memorandum ............................................................................................1 Section B: Administrative and Technological Capabilities ........................................................6 1. General: Business Plan Information .................................................................................9 a. Statement of Purpose .............................................................................................10 b. Operations Development .......................................................................................11 c. Current Planning Schedule ....................................................................................30 d. Current Budgetary Planning and Estimates ...........................................................31 2. Copyright Office Specific Requests................................................................................33 a. Ownership Identification, Matching, and Claiming Process .................................33 b. Maintenance of Musical Works Database .............................................................46 c. Collection and Distribution of Royalties, Including Unclaimed Accrued Royalties ...............................................................51 d. Investment in Resources and Vendor Engagement ...............................................54 e. Funding ..................................................................................................................59 f. Education and Outreach .........................................................................................62 Section C. Governance.................................................................................................................64 1. Nature of MLC ................................................................................................................65 2. Board Composition and Selection Process .....................................................................66 a. Professional Songwriter Members .........................................................................66 b. Music Publisher Members .....................................................................................69 c. Nonvoting Board Members....................................................................................74 3. Board Committees, Committee Composition, and Selection Process ............................76 a. Operations Advisory Committee ...........................................................................76 i b. Unclaimed Royalties Oversight Committee ..........................................................78 c. Dispute Resolution Committee ..............................................................................84 4. Governance Issues ..........................................................................................................86 a. Current Board Intentions as to Succession ............................................................87 b. Transparency ..........................................................................................................88 c. Conflicts of Interest................................................................................................91 d. Confidential Information .......................................................................................92 Section D. Indicia of Endorsement and Support.......................................................................94 1. Questions Regarding The Endorsement Criteria of Section 115(d)(3)(A) .....................95 2. MLC Is The Only Entity That Meets The Statutory Endorsement Criteria ....................97 3. MLC Is Also Endorsed And Supported By A Diverse Group Of Music Industry Stakeholders ........................................................................100 Section E: Memorandum on Legal Questions Raised By The Notice ...................................102 1. Introduction ...................................................................................................................103 2. Eligibility of Administrators for Collective’s Board ....................................................103 3. Endorsement Criteria ....................................................................................................106 4. The Notice’s Informational Requests ...........................................................................115 5. The Collective’s Board Succession and Appointment Powers .....................................117 Conclusion .............................................................................................................................125 ii Table of Appendix of Exhibits Exhibit No. Description 1 Certificate of Incorporation & Statement of Organization 2 Unanimous Written Consent of Board of Directors Establishing Committees and Appointing Members 3 Request for Information (RFI) 4 Request for Proposals (RFP) & Appendix of Detailed Functional Requirements Declarations and Letters of Songwriter Support 5 • Declaration of Bart Herbison of Nashville Songwriters Association International (NSAI) 5-A . List of over 2,400 endorsing songwriters 6 • Declaration of Michelle Lewis of Songwriters of North America (SONA) 7 • Letter from Aimée Allen 8 • Letter from Steve Bogard 9 • Letter from Kara DioGuardi 10 • Letter from Tim Nichols Declaration and Letters of Copyright Owner Support 11 • Declaration of David Israelite of National Music Publishers’ Association (NMPA) 11-A • Letter of Support from Over 130 Copyright Owners, including: . ABKCO . AdRev . Alfred Music Publishing . Altadena . Angry Mob Music . APM Music . Atlas Music Publishing . Bethel Music . Bienstock Empire, Inc. Big Deal Music . Big Machine Music . Big Yellow Dog Music . Black River Entertainment . Blanjie Records Entertainment . BMG . Bocephus Music . Bourne Co. busbee . Canticle Distributing . Casablanca Media Publishing iv . Co Co Head Music Publishers . Combustion Music . Concord Music . Curb | Word Entertainment . Demi Music . Disney Music Publishing . Domino Music Publishing . Downtown Music Publishing . Duchamp, Inc. Earth Mama/Rouse House . Emack Music Publishing . Emily Music . Entity Productions . ECS Publishing . Featherbed Music . Flea Market Music, Inc. Fluid Music Revolution . Fox Music . Glassbeat Music . Great Big River Music . HD Music Now . HoriPro Entertainment . Hurewitz and Company . Indigi Music . Integrity Music . Italian Book Corp. Jamaica Marlana Music . Kobalt Music . Leeds Music . Levosia . Linfaldia . Linz Music . Linzer Music . Lipservices . Lost Square Music (A Division Of Brasstacks) . Major Bob Music . M’Bubba Music . Materia Collective . Maxwood Music . Me Gusta Music . Megatrax . Melodic Gold Music . Midnight Syndicate . Missing Link Music . Money Made