Wired on Friday:Nowhere is the law more vague and changeable than in the application of copyright, trademark and patent law to new business models created by the internet, writes Danny O'Brien.

Yet amazingly, the European Commission wants to hand over the evolution of that law to police and prosecutors, by moving the bulk of intellectual property enforcement from the civil to the criminal courts.

Under a proposed directive, the second part of Intellectual Property Rights Enforcement Directive (Ipred Two), businesspeople could find themselves arrested and imprisoned for acts that might, with a different judge or in a different state, be a legitimate business model.

The truth is that billion-dollar companies are feeling their way through the maze of applying old internet protocol (IP) laws to new situations. Slowly, precedents are being set, but the case law is full of apparent contradictions.

Google is sued by publishers who claim it is illegally copying, even though Google has done exactly the same "copying" of billions of websites for years.

Legislators struggle to keep up with legalising activities that have become common practice, even though they are against the letter of the old lawbooks: MP3 players have been one of the most popular new consumer items of the past decade, even though it's against the law to transfer your CDs to an MP3 player in many European states.

Reviews of IP law in New Zealand, Australia, Hong Kong, and France mull indistinctly over the way forward - cautiously is the best suggestion they can come up with.

The hard and fast laws of the land become unclear, unnatural and arbitrary when applied to an unfamiliar setting. In this time of great fuzziness, the last thing you would want to do is to make those laws even more blunt.

Yet, with Ipred Two, that's exactly what the EU seems determined to achieve. In one incredible step, the law is likely to make these battles even bloodier and the uncertainty even greater.

Currently, all disputes over the interpretation of intellectual property are civil cases. If somebody thinks there's a problem with someone else's business model, they have to hire a lawyer, sue, and explain their grievance in the courts.

The proposed new law is designed to change the majority of intellectual property law from being a civil matter into one pursued by the criminal justice system. It will be the duty of police and public prosecutors to pursue these new "copyright criminals", rather than an allegedly harmed party.

Criminal sanctions are generally harsher than civil. Guess wrong about how old laws apply to new business models, and the directors of a plucky new start-up could be arrested and thrown in jail.

To increase the risks in an already unsteady business setting, and to ask the police to judge when enforcement of existing IP rights is in the best interests of society and when it's only in the interests of a special-interest group, is an enormous burden to place on law enforcement. There will inevitably be mistakes and unequal treatment.

To give an example of how this scenario could play out, take the example of DJ Drama and DJ Cannon, two of the biggest hip-hop mixtape DJs in the US. They were recently arrested and everything they owned was confiscated under the claim that their remixes were illegal copies.

The DJs are not pirates. In fact, they are regularly hired by record labels to produce and distribute mixes of their artists.

The DJs were arrested under a law which requires copiers to put their name and address on CDs they distribute: the police may well have misunderstood this to mean that the original copyright owners needed to be included in the credits, and acted to seize the media.

Ipred Two is limited to intellectual property infringement at a "commercial scale", meaning that ripping music on to your iPod won't see the cops break down your door at 4am. But what of new businesses? Under the law, "aiding, abetting and inciting infringements" would also be a criminal offence.

Even the infringement of patents was included in the first drafts of the Bill, meaning that an EU company could find itself criminally prosecuted for having a similar idea to another business elsewhere in the EU. Likewise, individuals could be arrested for misusing a trademark in a commercial magazine.

The aim of the law is to combat mass forgery of CDs and DVDs by professional criminals. News Corp, Viacom and Sony accused Google this week of knowingly benefiting from the sale of pirated video; would it really be a good idea to have public prosecutors judge whether Google was "inciting infringements", and decide to seize its property and pursue criminal charges against the company?

Considering that level of uncertainty, if Ipred Two becomes law in the EU, who would dare consider becoming the next Google?

Ideally, laws should have clean, sharp edges. If you choose to break the law, you should face the consequences. If you're a law-abiding citizen, you shouldn't find yourself wandering into jail without forewarning.

Reforming the law should make matters clearer, not more precarious. Businesses shouldn't be paralysed with the fear that their assets may be seized for actions that on another day might be viewed as perfectly acceptable.

Ignorance of the law is no excuse. But when we choose to create a law that is itself ignorant of modern realities, what excuse do we have?