Music Modernization Act Notices of License, Notices of Nonblanket Activity, Data Collection and Delivery Efforts, and Reports of Usage and Payment

Pursuant to the Musical Works Modernization Act, title I of the Orrin G. Hatch–Bob Goodlatte Music Modernization Act (MMA), and after soliciting public comments through a notification of inquiry and notice of proposed rulemaking, and engaging in clarifying ex parte communications with commenters as documented here, the Copyright Office is issuing an interim rule governing notices of license, data collection efforts, reports of usage and payment by digital music provider blanket licensees and related records of use, notices of nonblanket activity and reports of usage by significant nonblanket licensees, and data collection efforts by musical work copyright owners. The Office is issuing the rule on an interim basis to maintain flexibility to make necessary modifications in response to new evidence, unforeseen issues, or where something is otherwise not functioning as intended as the mechanical licensing collective (MLC) and digital music providers prepare for the license availability date and the blanket license begins to be administered.

This rule addresses a variety of reporting obligations between licensees and the MLC. Regarding blanket licensees’ obligation to engage in good-faith data collection and delivery efforts, the rule establishes a baseline requirement to make specific and targeted efforts to attempt to collect relevant data. The rule also addresses the separate, commercially reasonable data collection efforts required of musical work copyright owners whose works are listed in the MLC’s database.

Regarding reports of usage, the rule establishes specific requirements for the general scheme whereby blanket licensees must report usage and pay royalties to the MLC on a monthly basis, with a cumulative annual report due each year, and an ability to make adjustments to monthly and annual reports and related royalty payments. The rule addresses the format, delivery, and specific content of such reports, as well as the associated provision of royalty payment and accounting information.

Relatedly, the rule adopts requirements under which blanket licensees must retain records and documents necessary and appropriate to support fully all of the information set forth in their reports of usage for a period of at least seven years from the date of delivery of the particular report.

The rule also governs obligations for notices of nonblanket activity and reports of usage by significant nonblanket licensees.

The interim rule became effective October 19, 2020.

Subsequently, based on requests received following the adoption of these requirements, the Office adjusted requirements concerning the reporting of information about certain permanent download licenses that are passed through by record labels to digital music providers. These adjustments to the interim rule became effective April 5, 2021.

In May 2022, based on additional requests from the Digital Licensee Coordinator, the Office adjusted certain requirements related to reports of adjustment and annual reports of usage, which digital music providers submit to the MLC. The current adjustments to the interim rule became effective May 24, 2022. Comments on these adjustments were due no later than 11:59 p.m. eastern time on July 8, 2022.