The “Three-Step Test” and the Burden of Proof in Disputes Under the TRIPS Agreement

Abstract

A presumption has emerged in WTO dispute settlement that exceptions to intellectual property owners’ exclusive rights in national laws are inconsistent with the TRIPS Agreement until proven otherwise. TRIPS panels have applied an analytical distinction between obligations and GATT exceptions that is inapposite to exceptions to private rights and reverses the burden of proof. Consistent with WTO dispute settlement practice in other areas, a complainant WTO Member bears the burden to prove any allegation that another Member has failed to implement a TRIPS standard. The TRIPS provisions on limitations and exceptions to exclusive rights form part of standards on the scope of protection. Therefore, the complainant should bear the initial burden to demonstrate that a limitation or exception to an exclusive right does not satisfy the conditions in the three-step test before placing the onus on the respondent to show that its measure does satisfy those conditions. If the evidence and arguments are inconclusive, the relevant issues should be resolved in favour of the challenged measure.