The arbitration committee of the German Patents and Brands office in Munich sat today for seven hours to hear the dispute between the IFPI and German authors rights society GEMA over the country's mec

The arbitration committee of the German Patents and Brands office in Munich sat today for seven hours to hear the dispute between the IFPI and German authors rights society GEMA over the country's mechanical rate.

The IFPI wants to lower the mechanical rate from 9.009% to 5.6% and pay the difference to a trust account pending a decision by the arbitration committee. GEMA is rejecting what they see as a one-sided attempt by industry to cut royalties. Earlier, GEMA chairman Reinhold Kreile said he rejected an IFPI proposal of a "triple-eight agreement," which would provide for royalties of 8% for all types of utilization.

Observers in Munich today said they were surprised at the extent into which the arbitration committee discussed details of the dispute. The committee adjourned the session and plans to continue hearing the case again at the end of the year, an insider told Billboard.biz.

GEMA chairman Reinhold Kreile GEMA said he is optimistic about the outcome.