LONDON Britain's 300-year-old copyright laws look set for a shake-up after the government welcomed proposals to put the country on a par with international competitors.
Key recommendations of the Digital Opportunity review included the legalization of format shifting - copying CDs or DVDs on to digital music players or computers for personal use - which is already legal in all European countries bar Britain, Ireland and Malta.
Ministers and business groups also backed the introduction of a central Digital Copyright Exchange where licenses in copyright could be bought and sold, helping simplify the way businesses purchase rights to material.
The review said existing laws stifled innovation and prevented the copying basic to many industrial processes and Internet-based services.
"In recent years, the UK has failed to make the changes needed to modernize copyright law, for which we will pay an increasing economic price as we make our way into the third decade of the commercial Internet," lead author Professor Ian Hargreaves said on Wednesday.
"The recommendations of the review are designed to enhance the economic potential of the UK's creative industries and to ensure that the emergence of high technology businesses, especially smaller businesses, in other sectors is not impeded by our IP laws."
The review was commissioned last year by Prime Minister David Cameron who said at the time: "The founders of Google have said they could never have started their company in Britain."
The review said the new digital copyright exchange would also be used to identify and permit access to 'orphan works' whose owners cannot be traced.
Under current laws, if one owner out of hundreds on a film or TV programme cannot be traced they effectively hold the others to ransom as it becomes a criminal offence to exploit that work commercially.
"The exchange should make it easier for businesses and individuals to legitimately access and pay for copyrighted material, while allowing rights owners to retain control of how their content is used and sold," said Katja Hall, chief policy director of the Confederation of British Industry.
The CBI also called on the government to reassure creative businesses it would enforce intellectual property rights both in Britain and abroad to help ensure export-led economic recovery.
The review held back from recommending the introduction of U.S.-style fair use principles.
Under fair use, judges decide on a case by case basis whether emerging activities in relation to copyright works should legitimately fall within the scope of copyright protection.
The review estimated the impact on growth of adopting each of its recommendations and predicted it would be between 5.5 and 7.9 billion pounds a year.
"The government is wholly focused on boosting growth - and we can't afford to shy away from looking at complicated or controversial areas," business secretary Vince Cable said. "The report highlights real scope for changes to copyright laws which could add enormous value to the UK economy."
(Editing by David Cowell)