Applying the three step test in the digital environment

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Transcript Applying the three step test in the digital environment

WIPO Regional Symposium on
Copyright in Educational
Institutions and Libraries in the
Digital Era
Hong Kong, March 15-16, 2004
Applying the three step test in
the digital environment
Sam Ricketson
University of Melbourne
Exceptions to exclusive rights
Part of national laws and international
agreements from the very start
“…limits to absolute protection are
rightly set by the public interest”
Numa Droz, closing speech to the 1884 Berne
Early exceptions and limitations
under Berne
News reporting
Educational and teaching uses
“Minor implied reservations” – performing
rights, etc
No general exception – indeed, no
exclusive reproduction right until
Stockholm 1967
What is the three step test?
Article 9(2) Berne Convention:
“It shall be a matter for legislation in the
countries of the Union to permit the
reproduction of such works in certain
special cases, provided that such
reproduction does not conflict with a
normal exploitation of the work and does
not unreasonably prejudice the legitimate
interests of the author.”
 Applies here to exclusive reproduction right
Now applies more generally under:
art 13, TRIPS Agreement
Art 10, WCT; art 16, WPPT
Importance of the three step test
Now provides the template for many of the
exceptions applied in national law, at least
so far as foreign claimants are concerned
Question of compliance therefore arises
Interpretation of international obligation
Comparison of national provision
Interpretation of international
treaty provisions
Strictly rules of customary international
law apply here
Codified under Vienna Convention on Law
of Treaties: articles 1-32
Similar but not identical to statutory
interpretation or contractual construction in
the domestic context – more fluid and
Vienna Convention rules – art
1) A treaty shall be interpreted in good
faith in accordance with the ordinary
meaning to be given to the terms of the
treaty in their context and in the light
of its object and purpose.
“Ordinary meaning”:
use of dictionaries (WTO panel homestyle
different treaty languages – art 37(1) Berne
“Context” – art 31(2)
The context for the purpose of the
interpretation of a treaty shall comprise,
in addition to the text, including its
preamble and annexes:
(a) any agreement relating to the treaty
which was made between all the parties in
connexion with the conclusion of the treaty;
(b) any instrument which was made by one
or more parties in connexion with the
conclusion of the treaty and accepted by the
other parties as an instrument related to the
Additional “context” – art 31(3)
(3)There shall be taken into account
together with the context:
(a) any subsequent agreement between the
parties regarding the interpretation of the
treaty or the application of its provisions;
(b) any subsequent practice in the
application of the treaty which establishes
the agreement of the parties regarding its
(c) any relevant rules of international law
applicable in the relations between the
“Special meanings” – art 31(4)
(4) A special meaning shall be given
to a term if it is established that
the parties so intended.
Supplementary/extrinsic aids to
interpretation – art 32
Recourse may be had to supplementary
means of interpretation, including the
preparatory work of the treaty and the
circumstances of its conclusion, in
order to confirm the meaning resulting
from the application of article 31, or to
determine the meaning when the
interpretation according to article 31:
(a) leads the meaning ambiguous or
obscure; or
(b) leads to a result which is manifestly
absurd or unreasonable.
Applying these rules to art 9(2)
Search is for “ordinary meaning”
Still necessary to understand background to
Origins of the three step test
No right of reproduction in Berne prior to 1967
No need to define exceptions at this point – only
necessary once the exclusive right was recognised
Problem for Stockholm program drafters
Need to accommodate existing national exceptions
Need to avoid compromising new right
To list exceptions or adopt a general formula?
The problem stated – 1964 Study
“ This prerogative was of fundamental
importance in the legislation of member
countries of the Union; the fact that it is
not recognised in the Convention would
therefore appear to be an anomaly.
However, if a provision on the subject is to
be incorporated in the text of the
Convention, a satisfactory formula will have
to be found for the inevitable exceptions to
this right.
The problem stated (cont)
On the one hand, it is obvious that all forms of
exploiting a work which have, or are likely to acquire,
considerable economic or practical importance must
in principle be reserved to the authors. Exceptions
that might restrict the possibilities open to the
authors in these respects are unacceptable. On the
other hand, it must not be forgotten that national
legislations already contain a series of exceptions in
favour of various public and cultural interests and
that it would be vain to suppose that States would
be ready at this stage to do away with these
exceptions to any appreciable extent."
Existing exceptions under
national laws -1964
(a) public speeches;
(b) quotations;
(c) school, books and chrestomathies;
(d) newspaper articles;
(e) reporting current events;
(f) ephemeral recordings;
(g) private use;
(h) reproduction by photocopying in
Existing exceptions (cont)
(i) reproduction in special characters for
the use of the blind;
(j) sound recordings of literary works for
the use of the blind;
(k) texts of songs;
(l) sculptures on permanent display in
public places, etc;
(m) artistic works used as a background
in films and television programmes;
(n) reproduction in the interests of
public safety.
Result – art 9(2), Stockholm
Three steps/requirements to be satisfied before
exceptions to reproduction can be justified:
“certain special cases”
should “not conflict with a normal exploitation of the
should “not unreasonably prejudice the legitimate
interests of the author”
Cumulative not independent requirements
“Certain special cases”
“Certain” – “known and particularised…fixed,
determined, not variable” (dictionary meanings)
“Special” – “having an individual or limited
application or purpose”
“Case” – “occurrence, circumstance, event”
Does “special” require some kind of special
purpose or justification?
See WTO homestyle panel
“Certain special cases” (cont)
Suggested interpretation:
“Any exception that is made under this
provision should be clearly defined and
should be narrow in its scope and reach.
There is no further requirement at this
stage of the analysis to point to some
specific public policy or exceptional
circumstance justifying the exception.”
“No conflict with normal
exploitation of work”
“Exploitation” –
“making use of”,
“utilising for one’s own ends”,
“extracting economic value from”
“Normal” –
“conforming to a type or standard”
emprical and normative aspects
The meaning of “normal”
Empricial – “what is”
what the author presently earns remuneration from,
what she may reasonably expect to earn in the future,
eg with technological change
“Normative” – “what should be”
What markets should the author be able to control?
Non-economic aspects relevant here
Eg market for criticism, review, research
Suggested interpretation
In determining what is the "normal
exploitation" of a work, regard must be
had not only existing, but to potential,
uses of a work from which the copyright
owner can extract economic benefit.
Not all possible potential uses of the work
are to be regarded as within the scope of
"normal exploitation", rather it is those
that can be regarded as being of
"considerable or practical" importance.
Suggested interpretation (cont)
exceptions will be in conflict with a
normal exploitation of a work simply
because they involve uses that
would otherwise be of a commercial
benefit to the author: the test is
whether they enter into or will enter
into economic competition with the
Suggested interpretation (cont)
As a corollary to the above, an exception
does not necessarily remain within the
scope of the second condition for all time.
"Normal exploitation" is a dynamic
concept, and it is possible that an
exception may come into conflict with a
normal exploitation as technology and
circumstance of use change.
Suggested interpretation (cont)
Economic issues are not only relevant,
but “‘normative” issues of a non-economic
kind also need to be taken into account,
that is, it must be determined whether
the use in question is one that the
copyright owner should control, or
whether there is some other
countervailing interest that would justify
this not being so.
“Unreasonably prejudice
legitimate interests of author”
Only relevant where steps 1 and 2 are satisfied
“Interests” – both economic and personal (moral)
interest of author
“Legitimate” – lawful, justifiable – normative
aspect here
“Prejudice” – harms, injury, damage
“Unreasonably” – within limits, proportionate
May allow for compulsory licence
The three step test in TRIPS
Article 13
“Members shall confine limitations and
exceptions to exclusive rights to certain
special cases which do not conflict
with a normal exploitation of the work
and do not unreasonably prejudice the
legitimate interests of the right
Application of art 13
Specifically to rights required to be
protected under TRIPS
Indirect application to Berne – all members
of TRIPS to apply arts 1-21 Berne – art 9(1)
Incipient conflict if Berne allows wider
May fill the gap in Berne, eg implied minor
exceptions, WTO Panel case
Three step test in WCT
Article 10:
(1) Contracting Parties may, in their
national legislation, provide for limitations
of or exceptions to the rights granted to
authors of literary and artistic works under
this Treaty in certain special cases that do
not conflict with a normal exploitation of
the work and do not unreasonably
prejudice the legitimate interests of the
applies to rights under WCT
Article 10 (cont)
(2) Contracting Parties shall, when
applying the Berne Convention,
confine any limitations of or
exceptions to rights provided therein
to certain special cases that do not
conflict with a normal exploitation of
the work and do not unreasonably
prejudice the legitimate interests of
the author.
Applies to Berne, like art 13 , TRIPS
“Agreed statements” to art 1O
“ It is understood that the provisions of
Article 10 permit Contracting Parties to
carry forward and appropriately extend into
the digital environment limitations and
exceptions in their national laws which
have been considered acceptable under the
provisions should be understood to permit
exceptions and limitations that are
“appropriate in the digital environment”.
Allows for digital environment
Agreed statement to art 10(2)
It is also understood that Article
10(2) neither reduces nor extends
the scope of applicability of the
limitations and exceptions
permitted by the Berne Convention.
Effect on existing Berne
Agreed statements (cont)
Status unclear
Part of context of WCT?
Agreements made at time of conclusion of
Subsequent agreements re Berne members?
Three step test now a general template for
Is it appropriate for either non-digital or
digital environment?
How is it to be applied?
Example: research and study
See, for example, s 40(1) of the Copyright
Act 1968 (Australia):
“a fair dealing with a literary, dramatic,
musical or artistic work, or with an adaptation
of a literary, dramatic or musical work, for
the purpose of research or study does not
constitute an infringement of copyright in that
Applying the three step test
Certain special case?
Is it clearly defined?
How specific is research or study?
Limited in scope and application?
How much can be done? – “fair”?
 Works covered
 Rights covered
Section 40(1) - cont
Conflict with a normal exploitation?
Does author exploit the work in this area?
May she do so in the future?
Non-economic considerations? Ie the value of
research and study
Unreasonable prejudice?
Any effect on author’s econmic/moral interests?
If so, are any limits set? Eg conditions on use,
requirement for payment
Section 40(2)
Same purposes, but confined to to
reproductions (formerly copying)
Sets guidelines for determining fairness:
Nature and purpose of use
Affect on the market
Again, apply three step test
Section 40(3)
Sets deemed maxima as fair dealings for
research or study
Articles in periodical publications
Reasonable portions of other published works
Defined s 10(2) – hard copy (10% or a sihglw
 Defined s 10(2A) – electronic/digital versions
Section 40(3) - Applying the
three step test?
Defined cases?
Limited in scope and application?
May cover more than allowed by s 40(2) or even s
40(1) – intention is to reduce transaction costs
Normal exploitation?
Open-ended terms – eg “articles”
A market that the author might wish to exploit?
Could exploit?
A market that author should exploit –
countervailing normative considerations?
Unreasonable prejudice?
No limits, conditions, requirement to pay
Statutory licences for educational
Part VB of the Australian Act
Based on s 40 criteria (first and second
Requirement for remuneration (does this
meet third step?)
Other examples in the digital age
Private copying - format shifting
Time shifting
Transient copies (in RAM)
Peer to peer
Concluding remarks
Is three step test appropriate in all these
Is it meaningful?
Do they adequately reflect the “copyright
What are the alternatives?