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The following chapter explores the notion of limitations and exceptions in the structure of intellectual property rights, in particular with a view of the three-step test. Following a brief typology of limitations and exceptions operating in different legal systems and on the international level, the three-step test in its application by the WTO-panels is evaluated critically, leading to the development of criteria for a more balanced interpretation. Most importantly, it is argued that the criteria on all three levels are rather of a relative character than an absolute one. This means that the frequently held belief that the individual steps must be passed separately and cumulatively cannot be endorsed: Instead of constituting three separate units, the three steps are nothing but individual elements informing one overall assessment. Furthermore, for the calibration of that assessment, it has to be taken into account that TRIPS is embedded in the larger WTO framework, which implies inter alia that the proportionality principle anchored in Art. XX GATT must be observed. The approach endorsed in this chapter basically complies with the Declaration on the Three Step Test in Copyright, which was published in summer 2008 as the result of a joint project between the MPI and Queen Mary College. However, beyond that, it may serve as a basis for more comprehensive proposals to re-formulate the present three-step test.
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