The word "copy" has two meanings. As a verb, "to copy" means reproducing content from one work into either another work (we say one song was "copied" from another song). It also means that copying into another form (you "copy" your CD onto your iPod). The verb of "copy" is what we mean by the exclusive right to reproduce a work. "Reproduce" is a synonym version of the verb to copy. The noun version of "copy" refers to a physical object, a CD or the mp3 file on your iPod that contains the intangible work (the song or the performance). When I say I own a CD "copy" of a work, I am referring to the noun.

The original use of "copy" was in the noun sense. In England, book publishers spoke of owning rights in their "copies," meaning the printed production. The 1710 Statute of Anne, in its title, also spoke of "vesting the copies of printed books in authors or purchasers of such copies...." The right granted - the verb - was the right to "print" those copies. The right to print later became the right to reproduce, with reproduce being regarded as a synonym for the verb to copy. The term "copyright," though ambiguous, referred to either the noun or the verb. Most copyright acts, including the US Copyright Act, combine both the verb and noun versions: the right granted in 17 USC 106(1) is the right to "reproduce the work in copies."

What this means is that the right to reproduce (to "copy") is a right to stop others from making permanent (or fairly permanent) versions of your work, versions that will displace sales. Unfortunately, through mistaken interpretations of the noun "copy," the reproduction right has been wildly expanded in many countries, particularly the United States, to include transitory acts such as buffering, caching, or non-consumable versions that are necessitated by the automatic operation of computers or other digital technologies. None of these transitory acts has an independent economic value; that is, they do not harm copyright owners' markets. For example, in order to ensure that the streaming of a video is not interrupted by breaks in the transmissions, websites copy ("buffer") small parts of the video so that missing pieces can be filled during the interruption. Browsers make caches of websites that you just visited in case you hit the "back" button and want to revisit a site you just left. Other caches help with latency (response) time, and managing network traffic. Other times, a cache is made in case websites are inadvertently deleted. To consider buffering or caching to be infringing "copies" is using an eighteenth-century concept to defeat necessary twenty-first-century technologies, the only purpose of which is to increase performance. Where "copies" are made as a necessary adjunct for other legitimate purposes, no liability should exist. Amending the definition of "copy" in either the noun or verb version is an easy fix that would go far in assisting musical licensing and in removing the specter of mass, unintentional copying.

Copyright Laws without Copies?

Paradoxically, we are fast approaching an era when there will be copyright laws without copies in the traditional sense. Consumers have shown a growing preference for works to be streamed to them, rather than buying physical media like DVDs or CDs.

Accessing works stored in the cloud (on someone else's computer servers) rather than owning a copy is also now a significant business model, and is likely to be the dominant business model in many areas. This trend represents significant changes to consumer habits, and opens up the possibility for a true global distribution of culture, since streaming and cloud computing are not dependent upon brick-and-mortar stores or national boundaries. Nonphysical consumption also represents a way for copyright owners to significantly reduce costs of production and distribution and to reach much larger audiences.

Yet, our copyright laws pose significant threats to these developments. The transition from selling analog physical goods to digital, non-physical consumption is not one incumbent gatekeepers favor, for obvious reasons: It eliminates their traditional role in creating artificial scarcity, and thereby receiving monopoly profits. In an effort to create scarcity in the digital environment, copyright owners have obtained rights that give them the power to regulate technologies developed by third parties and to control access to their works. Neither of these rights previously existed. Previously, the copyright laws were technology neutral: They did not regulate technologies, but rather they regulated uses of copyrighted material, regardless of the technology employed. Use of copyrighted works was the essence of copyright, not technology. The exercise of these new rights over new technologies has placed consumers at a comparative disadvantage from their experiences in the hard copy, analog world. For example, under a 1984 United States Supreme Court decision (the famous "Betamax" case), the Sony Corporation could not be stopped or fined for marketing a video cassette recorder (VCR) that permitted people to tape television programs for later viewing. Such taping was regarded as fair use: an unauthorized but permitted and uncompensated use. Copyright owners have successfully overturned the Sony decision in the digital era, through legislation covering digital locks.

Digital Locks

With Sony standing as a rejection of Hollywood's efforts to control technologies and markets, motion picture companies set out to get Congress to change the rules for the digital world, beginning with digital video disc (DVD) players. Consumer electronics companies, however, very much wanted DVD players to have the same functionality as VCRs: who wants to offer new technologies that can do less than the old technologies you are trying to replace? Yet, that is indeed what happened.

How? Through the use of "digital locks" - software code inserted into a CD, DVD, or consumer product to prevent or regulate consumer access. Circumventing the lock - "hacking" in the vernacular - was made both a civil and criminal violation in the 1998 U.S. Digital Millennium Copyright Act (DMCA) and in the laws of other countries.

In the case of DVDs, this is what happened. In order to sell DVD players that would play the DVDs Hollywood sold to consumers, electronics manufacturers were required by Hollywood to build into their players a key capable of de-encrypting an algorithm built into the DVD. The algorithmic key built into the DVD scrambles over the face of the DVD digital data representing the images of the film. The algorithmic key, when matched to a key in the DVD player, allows the images to play in the correct order; without the key, you get an unwatchable visual mess. To get the key, you have to play by Hollywood's rules.

Why wouldn't the manufacturers just break the algorithmic key and thereby avoid having to agree to Hollywood's efforts to cripple the new technology? The manufacturers were quite capable of breaking the key because the digital lock the industry chose wasn't at all robust: teenagers could and did break it. In a preDMCA world that would be the end of it: after breaking the key, manufacturers could then market players that had the functionality consumers wanted and which the Supreme Court allowed as fair use in the Sony case. But because of the DMCA, owners of DVD players were placed in a worse position than owners of VCRs.

Here is another example of the misuse of copyright laws to place the public in a worse position in the digital world than in the analog world. A venerable principle of copyright law is the first-sale doctrine (in other countries it's called the exhaustion doctrine): Once a lawful copy of a book is sold or given away, the owner of that copy can turn around and resell it or give it away without permission or payment. This is why we can have secondhand bookstores. But what if the book is licensed and not sold? If the transaction is considered a license then the first-sale doctrine doesn't apply, as thousands of startled Amazon.com purchasers found out when their copy of George Orwell's 1984 was remotely removed from their Kindles by Amazon, after Amazon determined that its source wasn't authorized.

Digital locks govern even if the first-sale doctrine does apply because the digital lock provisions in US law are not part of the Copyright Act proper and thus are not limited by the first-sale doctrine. If an eBook has digital locks, those locks can limit how many times you can read the book and whether you can loan it to family members or friends. Digital locks can be used not just with individuals, but with libraries too. In the past, libraries that lawfully acquired a copy of a book could lend it out as many times as they wanted. This may be a thing of the past: In March 2011, book publisher HarperCollins stunned the library world by announcing that a license to lend its eBooks will expire after twenty-six loans. In a world where books will increasingly be issued only in eBook format, such policies may radically change the nature of libraries.

The DMCA and other digital lock laws are prime examples of our march backwards, of how our laws are used to thwart innovation and creativity. The DMCA is the reason you can't load lawfully purchased copies of your DVDs into your iPod, why you can't transfer copies of many lawfully purchased works from one electronic device to another, why DVDs bought in one country may not work in another, something that greatly embarrassed (or should have) President Obama when he gave then–United Kingdom prime minister Gordon Brown a set of DVDs of American movies, which couldn't be lawfully played on Brown's DVD player.

The DMCA will permit copyright owners to control how many times you can read or watch a copyrighted work. In the DMCA world, both consumers and technology are treated as the enemy.

This unfortunate approach ignores that consumer expectations are greatly influenced by technologies. It is new technologies, not new works, that lead to new consumer expectations and therefore new sources of profits for authors. The Sony Walkman led to an explosion of new sales of audio cassettes. The same was true of the introduction of the CD, where for most of its product life, more money was made from consumers re-buying existing albums than from buying new ones.

But for new technologies, the copyright industries and authors would have starved long ago, since they have played no role, creatively or financially, in the development and introduction of the technologies that enable them to make money. Not a single penny was contributed by the music industry to the creation, manufacture or marketing of iTunes, the iPod, or the iPad. Not a single penny was contributed by the copyright industries to the development of the internet or to any search engine even though the copyright industries could not exist without either. New technologies provide new ways to satisfy new consumer demand and to thereby make healthy profi ts. You would never know that from the medieval mentality of moat building represented by the DMCA and copyright industries' approach to most new technologies, an approach that has failed to grasp the simple point, proved over and over again, that new technologies create new opportunities.

Whether those new opportunities are disruptive or not to existing business models is not within copyright owners' control. What is in their control is whether to respond constructively and thrive, or whether to respond destructively and fail.

The proxy battle for control of technologies and markets through copyright laws must stop. Our copyright laws must be technology neutral and based on twenty-first-century markets: those markets include a distinct and growing trend toward consumption of copyrighted works without copying them: copyright laws without copying makes no sense. A new structure must provide twenty-first-century solutions to getting authors paid and giving the public access to their creations. This will involve in many (but certainly not all) cases changing the fundamental nature of copyright from a grant of exclusive rights into a right of remuneration: a right to be paid through statutory licensing, collective management of rights, and levies.

Having an exclusive right does you no good if you can't get paid. The technological elimination of control over uses of copyrighted works is neither good nor bad, but it is a fact of life. As a fact of life, it requires that we rethink how we ensure that authors get paid.

There is no evidence that policymakers are willing to take the bold steps necessary to make copyright laws function effectively in the twenty-first century. We have yet to see copyright reform proposals we can believe in. Merely giving speeches about respecting copyright or about the importance of innovation and economic growth are empty gestures, unless wholesale reform is undertaken.

This book offers ideas for how to construct such a new system. I begin with a review of policymakers' failure to base copyright laws on the actual conditions in which those laws operate. There is no hope for the future if it is merely a continuation of a failed past.

Taken from How to Fix Copyright by William Patry, published by Oxford University Press and available in hardback at £13.99.To order a copy for £13.99 with free UK p&p go to theguardian.com/bookshop or call 0330 333 6846