[Code of Federal Regulations]
[Title 37, Volume 1]
[Revised as of July 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 37CFR260.4]

[Page 592-593]
 
              TITLE 37--PATENTS, TRADEMARKS, AND COPYRIGHTS
 
                                CONGRESS
 
PART 260--USE OF SOUND RECORDINGS IN A DIGITAL PERFORMANCE--Table of Contents
 
Sec. 260.4  Confidential information and statements of account.

    (a) For purposes of this part, confidential information shall 
include statements of account and any information pertaining to the 
statements of account designated as confidential by the nonexempt 
subscription digital transmission service filing the statement. 
Confidential information shall also include any information so 
designated in a confidentiality agreement which has been duly executed 
between

[[Page 593]]

a nonexempt subscription digital transmission service and an interested 
party, or between one or more interested parties; Provided that all such 
information shall be made available, for the verification proceedings 
provided for in Secs. 260.5 and 260.6 of this part.
    (b) Nonexempt subscription digital transmission services shall 
submit monthly statements of account on a form provided by the agent 
designated to collect such forms and the monthly royalty payments.
    (c) A statement of account shall include only such information as is 
necessary to verify the accompanying royalty payment. Additional 
information beyond that which is sufficient to verify the calculation of 
the royalty fees shall not be included on the statement of account.
    (d) Access to the confidential information pertaining to the royalty 
payments shall be limited to:
    (1) Those employees of the designated agent who are not also 
employees or officers of a sound recording copyright owner or performing 
artist, and who, for the purpose of performing their assigned duties 
during the ordinary course of business, require access to the records; 
and
    (2) An independent and qualified auditor who is not an employee or 
officer of a sound recording copyright owner or performing artist, but 
is authorized to act on behalf of the interested copyright owners with 
respect to the verification of the royalty payments.
    (e) The designated agent shall implement procedures to safeguard all 
confidential financial and business information, including but not 
limited to royalty payments, submitted as part of the statements of 
account. Confidential information shall be maintained in locked files.
    (f) Books and records relating to the payment of the license fees 
shall be kept in accordance with generally accepted accounting 
principles for a period of three years. These records shall include, but 
are not limited to, the statements of account, records documenting an 
interested party's share of the royalty fees, and the records pertaining 
to the administration of the collection process and the further 
distribution of the royalty fees to those interested parties entitled to 
receive such fees.