By Claire Davenport
BRUSSELS (Reuters) - Internet users in Europe may be allowed to copy parts of some copyrighted files legally under reforms to outdated rules governing the murky world of online piracy, EU officials said on Wednesday.
Entertainment and software companies, who say they are losing billions of dollars of revenues to pirates, have been lobbying the bloc to outlaw all unlicensed copying and sharing of their digital films, music and applications.
But the bloc's executive, the European Commission, said it was hoping to find a middle ground that would let legitimate users copy parts of some files - while clamping down on serious criminals.
"The Commission's objective is to ensure that copyright stays fit for purpose in this new digital context," the EU Commission said in a statement.
Officials said they were redrawing the EU's 2001 copyright law, that was agreed when slow internet speeds made it difficult to share large digital files online.
New legislation, which could emerge in 2014, could clarify the fact that people could make "fair use" of some digital media, they added.
"Fair use" is a concept already active in other areas of copyright law, giving book reviewers, for example, the right to include short passages or quotes from publications in their articles.
Online "fair use" might let people use a snippet of someone else's song in a parody posted on the video-sharing website YouTube, said one Commission source.
"The question is can that snippet be 30 seconds or one minute," the source added.
Software companies have argued against the use of fair use, saying it is nearly impossible to copy just parts of their programs.
The European Parliament rejected a global agreement on copyright theft in July, handing a victory to thousands of tech-savvy activists who had argued the terms of the Anti-Counterfeiting Trade Agreement (ACTA) were too harsh.
Young protesters rallied across Europe and signed petitions saying the agreement - which aimed to give governments the power to stop the sale of fake goods - would curb their freedom and allow officials to spy on their online activities.
In a leaked document seen by Reuters, the Commission admitted that ACTA's defeat in Europe signaled the need for more flexible copyright laws.
Internet piracy has eroded music sales and software companies say they are losing tens of billions of dollars in revenue.
The Business Software Alliance, a U.S.-based lobby group, said 42 percent of people taking part in a survey in 2011 admitted using pirated software.
(Editing by Andrew Heavens)