By now, the so-called "three-step test" is at the core of copyright law. Under international copyright law, all exemptions to copyright and the so-called neighboring rights have to comply with this test. Some countries inserted the test in their national copyright acts. In others, judges apply the three-step test when they are in doubt whether an activity may be exempted. As the test is incorporated in the EU Copyright Directive of 2001, the European Court of Justice may use it while considering whether exemptions are in conformity with EU law. However, the three-step test is seriously flawed and not suited for application by the courts. It was not conceived as a threshold for determining whether certain usage should exclusively be controlled by the copyright owner, but rather as an intentionally vague diplomatic compromise. The second step, according to which usage may only be exempted if it "does not conflict with the normal exploitation" of protected subject matter, poses the main problem. This contribution sets out the problem and proposes a possible solution.