After six years of legal maneuvering, the Second Circuit Court of Appeals on August 17, 2011, rejected a proposed settlement in a class action copyright suit filed by freelance writers against periodical publishers and electronic database operators—a decision, experts say, that will likely kill the beleaguered Google Book Settlement as well.

As the lead objector to the Freelance settlement (which bore my name at the Supreme Court last year: Reed Elsevier v. Muchnick) and as someone who has worked for nearly two decades on the issue of getting writers a fair share of revenue in the digital economy, I believe the courts have sent a message: class action copyright settlements cannot substitute for good public policy making. I look forward to a new, equitable settlement to the Freelance case. But I hope the ultimate outcome is that the parties in both the Freelance and Google cases will come together to advocate to Congress for much needed changes to the copyright system in the digital age.

The Freelance settlement stems from the 2001 Supreme Court decision in New York Times v. Tasini, which affirmed that publishers violated copyright law by licensing freelance writers’ articles to electronic databases without permission or compensation. That ruling should have given writers tremendous leverage for correcting this injustice. Instead, that leverage was given away in an inadequate and unfair $18 million settlement.

Why was the settlement unfair? Because the parties crafted a deal that could have cut unregistered copyright holders out of any compensation, even though more than 99% of the millions of articles covered by this global settlement are unregistered copyrighted works. Rather than seeing unregistered copyrights as a corpus of collective potential, lawyers for the named plaintiffs, under the direction of the Authors Guild, the National Writers Union, and the American Society of Journalists and Authors, proclaimed these works to be next-to-worthless because copyright holders lack the standing to sue until they’ve done their registration paperwork.

As objectors, we argued that unregistered copyright holders were not fairly represented in the negotiations. In rejecting the settlement the Second Circuit agreed. When settlement negotiations are revived, the millions of unregistered copyright holders will now be a subclass and will have their own counsel to advocate for their interests.

We recognize that not everyone is happy with this outcome. Some writers have waited a long time for settlement checks, and some claim to be owed substantial sums. But the objectors believe that the rights of millions of copyright owners trump the interests of a handful of claimants who stand to benefit disproportionately from a bad settlement.

For their part, publishers and database owners have warned of a diminished historical record if this settlement failed. That hardly needs to be the case. The Supreme Court itself suggested hypothetical remedies that could easily keep the historical record intact, and none of them involve pulling articles from databases, stalling in mediation, or shoving all-rights contracts down the throats of freelancers.

Yes, it’s been a long fight, and there is still a ways to go. But the combined collapse of the Freelance and the Google book settlements offers us an extraordinary opportunity to come together to design the digital rights regime of the future.

Google may have overreached with its project to digitize the world’s books, but its model made great strides since the days when Freelance was negotiated. The Google settlement included the kind of royalty apparatus that I believe is exactly what’s needed to cut the Gordian knot of digital rights and access. And the technology now exists to track usage and distribute a fair share of revenues to writers, while promoting reasonable standards of fair use for information consumers.

The main problem, of course, is that such a regime and any compulsory royalty system requires congressional action, rather than judicial approval of some private legal settlement. But the expensive, long-running saga of well-conceived lawsuits and ill-fated settlements should finally motivate stakeholders to push Congress for a coherent, fair copyright system for the digital age. A system that offers publishers peace in the marketplace and rewards independent creators could diversify, vitalize, and democratize American culture.

Irvin Muchnick, author of Chris & Nancy: The True Story of the Benoit Murder-Suicide and Pro Wrestling’s Cocktail of Death, is writing a book on the concussion crisis in sports.