German authors rights society GEMA's ongoing dispute over the national IFPI body's plans to cut the mechanical rate is set to go before arbitration.

German authors rights society GEMA's ongoing dispute over the national IFPI body's plans to cut the mechanical rate is set to go before arbitration.

GEMA chairman Reinhold Kreile confirms that oral proceedings are due to commence before the German Patent and Brand Office on July 28.

Speaking before GEMA's annual general meeting today in Berlin, Kreile told more than 800 members that the society would stand firm in its opposition to the IFPI's proposed tariff cut. According to Kreile, GEMA has support from BIEM, the trade body representing European societies collecting mechanical rights.

"The willingness to negotiate cannot be imposed from above and certainly not by dictating the terms on a one-sided basis, as IFPI seems to think," Kreile said. "Authors' rights to reasonable remuneration will not yield to force."

As previously reported, the German chapter of the IFPI in January applied for the mechanical royalty rate to be slashed to 5.6% from 9.009% of the PPD (published price to dealers). Approval hinges on an arbitration tribunal decision that may take up to five years.

Kreile says he rejected an IFPI proposal of a "triple-eight agreement," which would provide for royalties of 8% for all types of utilization.

"In the interests of their composers, lyricists and publishers, GEMA will not be succumbing to the dubious charm of this offer as it also entails a massive reduction to the tune of over €100 million [$121 million] in the remuneration previously paid," he said. Kreile added that it was unwise of the recorded music industry to attempt to restructure the market at authors' expense.

"The structural crisis afflicting the record market for which the industry does not have any clear solution is of great concern to authors and their publishers who are unable to influence this situation," said Kreile.

GEMA recently reported total revenues of €813.61 million ($989.76 million) for 2003, up from €812.511 million ($988.42 million) in 2002.