Christian L. Castle Admitted in California and Texas Music Modernization Act Compliance Selected Materials By Chris Castle Christian L. Castle, Attorneys [email protected] 9600 Great Hills Trail, Suite 150 West | Austin, Texas | 78759 Phone (512) 420-2200 | Fax (512) 519-2529 www.christiancastle.com Copyright Office Notice of Proposed Rulemaking 58170 Federal Register / Vol. 85, No. 181 / Thursday, September 17, 2020 / Proposed Rules LIBRARY OF CONGRESS Associate Register of Copyrights, by Copyright Office with ‘‘broad regulatory email at [email protected] or Anna authority’’ 6 to ‘‘conduct such Copyright Office B. Chauvet, Associate General Counsel, proceedings and adopt such regulations by email at [email protected]. Each as may be necessary or appropriate to 37 CFR Part 210 can be contacted by telephone by calling effectuate the provisions of [the MMA 7 [Docket No. 2020–8] (202) 707–8350. pertaining to the blanket license].’’ The SUPPLEMENTARY INFORMATION: MMA specifically directs the Copyright The Public Musical Works Database Office to promulgate regulations related I. Background and Transparency of the Mechanical to the MLC’s creation of a free database Licensing Collective On October 11, 2018, the president to publicly disclose musical work signed into law the Orrin G. Hatch-Bob ownership information and identify the AGENCY: U.S. Copyright Office, Library Goodlatte Music Modernization Act, sound recordings in which the musical of Congress. H.R. 1551 (‘‘MMA’’).1 Title I of the works are embodied.8 As discussed ACTION: Notice of proposed rulemaking. MMA, the Musical Works more below, the statute requires the Modernization Act, substantially public database to include various types SUMMARY: The U.S. Copyright Office is modifies the compulsory ‘‘mechanical’’ of information, depending upon issuing a notice of proposed rulemaking license for making and distributing whether a musical work has been regarding the Musical Works matched to a copyright owner.9 For both Modernization Act, title I of the Orrin G. phonorecords of nondramatic musical 2 matched and unmatched works, the Hatch-Bob Goodlatte Music works under 17 U.S.C. 115. It does so database must also include ‘‘such other Modernization Act. Title I establishes a by switching from a song-by-song information’’ ‘‘as the Register of blanket compulsory license, which licensing system to a blanket licensing Copyrights may prescribe by digital music providers may obtain to regime that will become available on regulation.’’ 10 The database must ‘‘be make and deliver digital phonorecords January 1, 2021 (the ‘‘license availability made available to members of the public of musical works. The law establishes a date’’), and be administered by a in a searchable, online format, free of new blanket license to become available mechanical licensing collective charge,’’ 11 as well as ‘‘in a bulk, on the January 1, 2021 license (‘‘MLC’’) designated by the Copyright 3 machine-readable format, through a availability date that will be Office. Among other things, the MLC is widely available software application,’’ administered by a mechanical licensing responsible for ‘‘[c]ollect[ing] and to certain parties, including blanket collective, which will make available a distribut[ing] royalties’’ for covered licensees and the Copyright Office, free public musical works database as part of activities, ‘‘[e]ngag[ing] in efforts to of charge, and to ‘‘[a]ny other person or its statutory duties. Having solicited identify musical works (and shares of entity for a fee not to exceed the public comments through previous such works) embodied in particular marginal cost to the mechanical notifications of inquiry, through this sound recordings and to identify and licensing collective of providing the notice the Office is proposing locate the copyright owners of such database to such person or entity.’’ 12 regulations concerning the new blanket musical works (and shares of such In addition, the legislative history licensing regime, including prescribing works),’’ and ‘‘[a]dminister[ing] a contemplates that the Office will categories of information to be included process by which copyright owners can ‘‘thoroughly review[ ]’’ 13 policies and in the public musical works database, as claim ownership of musical works (and 4 procedures established by the MLC and well as rules related to the usability, shares of such works).’’ It also must its three committees, of which the MLC interoperability, and usage restrictions ‘‘maintain the musical works database is statutorily bound to ensure are of the database. The Office is also and other information relevant to the ‘‘transparent and accountable,’’ 14 and proposing regulations in connection administration of licensing activities promulgate regulations that ‘‘balance[ ] with its general regulatory authority under [section 115].’’ 5 the need to protect the public’s interest related to ensuring appropriate A. Regulatory Authority Granted to the with the need to let the new collective transparency of the mechanical Copyright Office operate without over-regulation.’’ 15 licensing collective itself. The MMA enumerates several DATES: Written comments must be 6 regulations that the Copyright Office is H.R. Rep. No. 115–651, at 5–6; S. Rep. No. 115– received no later than 11:59 Eastern specifically directed to promulgate to 339, at 5; Conf. Rep. at 4. Time on October 19, 2020. 7 17 U.S.C. 115(d)(12)(A). govern the new blanket licensing ADDRESSES: For reasons of Government 8 See id. at 115(d)(3)(E), (e)(20). regime, and Congress invested the 9 efficiency, the Copyright Office is using Id. at 115(d)(3)(E)(ii), (iii). 10 the regulations.gov system for the Id. at 115(d)(3)(E)(ii)(V), (iii)(II). 1 Public Law 115–264, 132 Stat. 3676 (2018). 11 Id. at 115(d)(3)(E)(v). submission and posting of public 2 See S. Rep. No. 115–339, at 1–2 (2018); Report 12 Id. comments in this proceeding. All and Section-by-Section Analysis of H.R. 1551 by the 13 H.R. Rep. No. 115–651, at 5–6, 14; S. Rep. No. comments are therefore to be submitted Chairmen and Ranking Members of Senate and 115–339, at 5, 15; Conf. Rep. at 4, 12. The House Judiciary Committees, at 1 (2018), https:// Conference Report further contemplates that the electronically through regulations.gov. _ _ Specific instructions for submitting www.copyright.gov/legislation/mma conference Office’s review will be important because the MLC report.pdf (‘‘Conf. Rep.’’); see also H.R. Rep. No. must operate in a manner that can gain the trust of comments are available on the 115–651, at 2 (2018) (detailing the House Judiciary the entire music community, but can only be held Copyright Office website at https:// Committee’s efforts to review music copyright liable under a standard of gross negligence when copyright.gov/rulemaking/mma- laws). carrying out certain of the policies and procedures transparency. If electronic submission 3 As permitted under the MMA, the Office adopted by its board. Conf. Rep. at 4. designated a digital licensee coordinator (‘‘DLC’’) to 14 of comments is not feasible due to lack 17 U.S.C. 115(d)(3)(D)(ix)(I)(aa). represent licensees in proceedings before the 15 H.R. Rep. No. 115–651, at 5–6, 14; S. Rep. No. of access to a computer and/or the Copyright Royalty Judges (‘‘CRJs’’) and the 115–339, at 5, 15; Conf. Rep. at 4, 12. See also internet, please contact the Office using Copyright Office, to serve as a non-voting member SoundExchange Initial September NOI Comment at the contact information below for of the MLC, and to carry out other functions. 17 15; Future of Music Coalition (‘‘FMC’’) Reply special instructions. U.S.C. 115(d)(5)(B); 84 FR 32274 (July 8, 2019); see September NOI Comment at 3 (appreciating also 17 U.S.C. 115(d)(3)(D)(i)(IV), (d)(5)(C). ‘‘SoundExchange’s warning against too-detailed FOR FURTHER INFORMATION CONTACT: 4 17 U.S.C. at 115(d)(3)(C)(i)(V). regulatory language,’’ but ‘‘urg[ing] the Office to Regan A. Smith, General Counsel and 5 Id. at 115(d)(3)(C)(i)(IV). balance this concern for pragmatism and flexibility VerDate Sep<11>2014 18:46 Sep 16, 2020 Jkt 250001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4702 E:\FR\FM\17SEP2.SGM 17SEP2 jbell on DSKJLSW7X2PROD with PROPOSALS2 Federal Register / Vol. 85, No. 181 / Thursday, September 17, 2020 / Proposed Rules 58171 Congress acknowledged that ‘‘[a]lthough language that might be helpful to ‘‘robust’’ 24 oversight. Given these the legislation provides specific criteria consider in promulgating regulations, comments, on April 22, 2020, the Office for the collective to operate, it is to be discussion of the pros and cons of issued a second notification of inquiry expected that situations will arise that applicable standards, and whether seeking further comment on information were not contemplated by the historical snapshots of the database to be included in the public musical legislation,’’ and that ‘‘[t]he Office is should be maintained to track works database, usability, expected to use its best judgement in ownership changes over time).20 In interoperability, and usage restrictions determining the appropriate steps in addition, the September NOI sought of the database, and transparency and those situations.’’ 16 Legislative history public comment on any issues that general oversight of the MLC (‘‘April further states that ‘‘[t]he Copyright should be considered relating to the NOI’’).25 Office has the knowledge and expertise general oversight of the MLC.21 Having reviewed and considered all regarding music licensing through its In response, many commenters relevant comments received in response past rulemakings and recent assistance emphasized the importance of to both notifications of inquiry, and to the Committee[s] during the drafting transparency of the public database and having engaged in ex parte 17 of this legislation.’’ Accordingly, in the MLC’s operations,22 and urged the communications with commenters, the designating the MLC, the Office stated Office to exercise ‘‘expansive’’ 23 and Office issues a proposed rule regarding that it ‘‘expects ongoing regulatory and the categories of information to be other implementation efforts to .