An analysis of the Three-Step-Test as a rule of thumb in the judicial protection of Intellectual Property rights

An analysis of the Three-Step-Test as a rule of thumb in the judicial protection of

Intellectual Property rights

byMarinos Papadopoulos

Attorney-at-Law J.D., M.Sc., Managing Partner ofPatsis, Papadopoulos, Kaponi & Associates

Athens, June 29-30, 2009Marinos Papadopoulos | URL: www.marinos.com.gr

TAIEX Training Seminar on the Enforcement of Intellectual Property rights

Protection against piracy, illegal trade and counterfeiting

JHA 33457

European Commission & European Public Law Organization

The Three-Step-Test in International Conventions

The Berne Convention (article 9§2).

The TRIPS Agreement (article 13).

The WIPO Treaties (articles 10 & 16).

Marinos Papadopoulos | URL: www.marinos.com.gr Athens, June 29-30, 2009

The Three-Step-Test criteria

Criterion 1: Limitations are allowed in certain special cases.

Criterion 2: There may neither be a conflict with the normal exploitation of the work.

Criterion 3: Nor an unreasonable prejudice to the legitimate interests of the author (and/or right-holder and/or user)


The Three-Step-Test criteria

The three criteria have always been understood to be cumulative.

All three criteria of the three-step-test must be deemed relevant tests deserving the same interpretative effort.

Its three steps make it possible to approach the core of copyright’s balance in stages.


The Three-Step-Test & The Fair Use Doctrine

Specified in section 107 of the U.S. Copyright Act.

The 4 factors of the Fair Use doctrine are:

The purpose and character of the use, including whether such use is of a commercial nature or is for non-profit educational purposes.

The nature of the copyrighted work.

The amount and substantiality of the portion used in relation to the copyrighted works as a whole.

The effect of the use upon the potential market for or the value of the copyrighted work.


The Three-Step-Test: Criterion 1

Personal use justifies for a permitted exception in law.

3 groups of users when analyzing the personal use:

Case 1: copyrighted material is used by individuals in privacy solely for personal study, learning and enjoyment.

Case 2: copyrighted material is used by individuals operating within non-profit organizations and public entities within the scope of their statutory goals.

Case 3: copyrighted material is used by individuals operating within for-profit organizations and private entities within the scope of their statutory goals.


The Three-Step-Test: Criterion 1, Case 1

copyrighted material is used by individuals in privacy solely for personal study, learning and enjoyment.

A legislator who exempts the use in privacy of copyrighted material for personal use reconciles the authors’ interest in the exploitation of their works with the user’s interest in free pathways through society’s landscape which allows the participation in cultural life as well as the discovery and development of one’s own creative potential.



copyrighted material is used by individuals operating within non-profit organizations and public entities within the scope of their statutory goals.

Non-profit organizations and public entities involved in either the dissemination of knowledge and culture and/or in the process of serving the public interest in knowledge and culture within the scope of their statutory goals, would potentially be hindered from fulfilling their mission properly were authors to exert control over their output on the basis of the provisions of their exclusive rights rendered in intellectual property law.



copyrighted material is used by individuals operating within for-profit organizations and private entities within the scope of their statutory goals.

It makes sense NOT to include said case in the limitations in law.The economic activities of industrial undertakings and the profit motive underlying uses of copyrighted materials by individuals operating within the context of for-profit organizations and private entities are enough reasons to silence arguments supporting a limitation in copyright law.



There cannot be a conflict with the normal exploitation of the work.

the use of copyrighted material must not enter into economic competition with all forms of exploiting a work which have, or are likely to acquire, considerable economic or practical importance. Concerns not only actual markets, but also potential ones which might emerge in the future.



a limitation cannot unreasonably prejudice the legitimate interests of the author.

This criterion is established by the following 3 elements:

It refers to interests rather than rights. Only legitimate interests must be considered and not every conceivable relevant concern. Prejudices to the circle of legitimate interests are permissible insofar as they are not unreasonable—they do not harm the legitimate interests to an unreasonable level.



A reference to the principle of proportionality: if a limitation fulfils the criteria 1 and 2, said limitation is accepted to the point that it favors the principle of proportionality.

Depicts the core thinking in the intellectual property discipline which is regulating with the aim to strike proper balance among interests of all the involved parties and not only of authors and subsequent right-holders.


Signpost: The principle of proportionality

The last signpost in the intellectual property field generally and the three-step-test rule specifically is the widely accepted and constitutionally safeguarded principle of proportionality.


The Three-Step-Test: The principle of proportionality

If a proper balance between the concerns of authors, subsequent right-holders and users is to be struck, all the involved parties must leave room for a balancing movement.

case Sabam v. s.a. Tiscali (Scarlet) District Court ofBrussels, June 29, 2007 case Productores de Música de España(Promusicae) v. Telefónica de España S.A.U. C-275/06, 2008 CELEX no 62006J0275 (Jan. 29, 2008) of the European Court of Justice


The Three-Step-Test: The principle of proportionality

ECJ: …do not require the Member States to lay down, in a situation such as that in the main proceedings, an obligation to communicate personal data in order to ensure effective protection of copyright in the context of civil proceedings. However, Community law requires that, when transposing those directives, the Member States take care to rely on an interpretation of them which allows a fair balance to be struck between the various fundamental rights protected by the Community legal order.

ECJ: … when implementing the measures transposing those directives, the authorities and courts of the Member States must not only interpret their national law in a manner consistent with those directives but also make sure that they do not rely on an interpretation of them which would be in conflict with those fundamental rights or with the other general principles of Community law, such as the principle of proportionality.


The Three-Step-Test: limits of private use

Limits in the meaning of private use are subject to revision in consideration of technological, societal as well as legal developments in society.

Said limits are not fixed by law and/or judicial precedent, but rather a court in front of which a case is heard must consider widely the circumstances of private use as they’ve evolved in society and are affected by technological means, societal ethics and the existing legal framework.


The Three-Step-Test: interpretation

The three-step-test should not be interpreted in a manner that jeopardizes an adequate solution which balances the usually conflicting interests of the author, the subsequent right-holders and people’s interest in making use of a work in Cyberspace.

The three-step-test should always be interpreted in a manner that respects the legitimate interests of third parties including interests deriving from human rights and fundamental freedoms, interests in competition notably on secondary markets, and other public interests notably in scientific progress and cultural, social or economic development.


France’s unconstitutional step: the Three-Strike Law

On Wednesday, June 10, France’s Constitutional Court ruled that the Three-Strikes Law passed by the French Senate & the National Assembly contravenes theholiest of French documents, the Declarationof the Rights of Man and Citizen of 1789. TheConstitutional Court ruled that cutting offInternet access by the Hadopi agency -without recourse to a court of law -contravened three articles of the Declarationof the Rights of Man, France’s fundamentaldocument setting out the rights of Frenchcitizens, breaching rights to freedom ofexpression and the presumption ofinnocence.


Intellectual property vs. Real property

Real property: the law must both create an incentive to produce and protect the right of possession.

Intellectual property: the law need only to create the incentive to produce.

The three-step-test must ensure that authors have a sufficient incentive to produce works.


Intellectual property vs. Real property

The incentive to produce works is not diminished by the non-commercial use of the works when they become available online, even if that online availability means that their works acquire the traits of public goods and/or works that are set available in the commons, i.e. once online and freely accessible for non-commercial use, they become “non-excludable” and “non-rivalrous”.

It is questionable whether this reasoning is applicable in all kinds of works.


An analysis of the Three-Step-Test as a rule of thumb in the judicial protection of

Intellectual Property rights

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An analysis of the Three-Step-Test as a rule of thumb in the judicial protection of Intellectual Property rights