LONDON Britain said Wednesday it will introduce a digital exchange where licenses for copyright works may be bought and sold, as part of a revamp of its 300-year-old copyright laws.
At the same time, the government said it would scrap proposals to block websites that publish copyright-infringing material after a regulator found the plan was unworkable.
Business Secretary Vince Cable said the coalition government accepted the "broad findings" of an independent review which found that reform of Britain's intellectual property framework could add up to 8 billion pounds ($13 billion) to the economy.
"By freeing up the intellectual property copyright system ... we help consumers, we help business and we help the pursuit of knowledge. But at the same time we do it in a proportionate and balanced way that protects genuine creative artists," Cable told a news conference.
Governments are struggling with the challenge of updating laws for the digital age, which has transformed business models and created opportunities for mass piracy.
Britain also wants to rebalance its economy away from financial services to boost growth and sees its creative industries as a potential area for expansion.
The government endorsed a proposal to set up a central "digital copyright exchange," simplifying the way businesses buy rights to material.
It follows a review by Ian Hargreaves, a professor at Cardiff School of Journalism, who said such an exchange could add up to 2.2 billion pounds a year to the British economy by 2020.
The government said it plans to allow the widest possible exceptions to copyright laws within an existing European Union framework, opening the way for more data-mining -- sophisticated techniques used by business to extract useful information from masses of data.
Cable said a lot of medical research data was currently blocked to data-mining by copyright protection.
He said the government planned to "bring the law in line with common sense" by legalizing the copying of CDs or DVDs onto digital music players or computers for personal use.
The government also plans to allow commercial and cultural use of so-called "orphan works" -- works where the copyright owner cannot be contacted, and so, under current law, may not be used.
It also announced changes to a law aimed at curbing illegal file-sharing.
The Digital Economy Act, rushed through parliament last year by the previous Labor government, has faced a legal challenge by Internet service providers (ISPs) BT and TalkTalk, although the courts have upheld most of the law's provisions.
The government said it would scrap proposed regulations in the act that would have allowed the courts to block websites hosting copyright-infringing material.
Regulator Ofcom advised the government that the proposals were "too cumbersome and unworkable to have a real impact," Culture Minister Ed Vaizey said, adding that the government would look into possible alternatives.
The government is sticking to its plan to require ISPs to pay a quarter of the costs of sending warning letters to computer users who illegally download music and videos.
But, in line with a court ruling, ISPs will no longer have to contribute to Ofcom's cost of setting up the system.
Geoff Taylor, chief executive of BPI, representing Britain's recorded music industry, urged the government to "pull out the stops" to get the Digital Economy Act up and running.
"Other countries like the U.S. and France are already taking decisive, swift action on piracy and the UK must not fall behind if we are to deliver on growth," he said in a statement.
(Editing by David Cowell)