The unauthorized use of a registered trademark—commonly referred to as trademark infringement—undermines brand value, misleads consumers, and may result in significant commercial loss. This article outlines the legal remedies available for Trademark Infringement
in Nepal under the prevailing statutory framework.
Legal Framework Governing Trademark Rights
Trademark rights in Nepal are primarily governed by the Patent, Design and Trademark Act, 2022 B.S. (1965 A.D.) (“PDTA”). This statute provides the legal basis for registration, protection, and enforcement of trademarks within the jurisdiction. In addition to the PDTA, several ancillary laws contribute to the enforcement mechanism:
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Customs Act, 2064 (2007) – Empowers customs officers to intercept infringing goods at Nepal’s borders.
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Export and Import (Control) Act, 2013 (1957) – Provides authority to regulate cross-border trade of counterfeit goods.
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Black Marketing and Some Other Social Offenses and Punishment Act, 2032 (1975) – Penalizes the sale of counterfeit or infringing goods in the domestic market.
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Consumer Protection Act, 2075 (2018) – Ensures consumer rights against deceptive trade practices, including the sale of fake branded goods.
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National Civil Code Act, 2074 (2017) – Recognizes civil remedies for violation of proprietary rights, including intellectual property.
Role of the Department of Industry (DOI)
The Department of Industry (DOI), operating under the Ministry of Industry, Commerce, and Supplies, is the designated authority responsible for the registration and enforcement of trademark rights in Nepal. The DOI exercises the following powers:
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Administrative Functions: Includes the processing of trademark registration, renewal, modification, and assignment of rights.
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Quasi-Judicial Functions: The DOI may adjudicate disputes involving trademark infringement, issue cease and desist orders, and cancel registrations obtained in bad faith.
Understanding Trademark Infringement in Nepal
As per Section 16 of the PDTA, any person who, without authorization from the registered owner, reproduces, copies, or imitates a registered trademark in connection with goods or services constitutes trademark infringement in Nepal. Infringement may result in consumer confusion, loss of brand reputation, and unjust enrichment of the infringer.
Civil Remedies Available to Trademark Owners
Trademark proprietors in Nepal may invoke the following civil remedies through the competent civil courts or through the DOI:
a. Injunctions (Interim and Permanent)
The courts may grant interim or permanent injunctions to restrain the unauthorized use of a trademark. This measure is crucial in preventing irreparable harm during litigation.
b. Compensatory Damages and Account of Profits
The aggrieved party may claim:
c. Seizure and Destruction of Infringing Goods
On judicial order, counterfeit goods, packaging materials, and promotional content bearing the infringing trademark may be seized and destroyed to prevent further market circulation.
Criminal Remedies for Trademark Infringement
Trademark infringement may also trigger criminal liability under Nepalese law. The PDTA prescribes the following penal provisions:
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Fine: Up to NPR 100,000 depending on the extent and nature of infringement.
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Imprisonment: Up to two years for willful and egregious violations.
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Investigation and Prosecution: A complaint may be filed with the DOI or police. Upon verification, enforcement authorities may conduct raids and prosecute offenders in accordance with criminal procedure.
Administrative Remedies via the Department of Industry
Trademark owners may pursue administrative remedies directly before the DOI:
a. Complaint and Adjudication
Trademark holders can file complaints supported by relevant evidence (e.g., trademark registration certificate, proof of use, evidence of infringement). The DOI may summon the infringing party and render a decision requiring the infringer to cease the infringing activity.
b. Cancellation of Fraudulent or Infringing Registrations
If a trademark is registered in bad faith, or deceptively similar to a pre-existing mark, the DOI has the authority to cancel the registration upon receiving a valid application or complaint.
Customs Enforcement Against Infringing Goods
To prevent cross-border trafficking of counterfeit goods, Nepal’s Customs Authority enforces IP rights as follows:
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Border Control Measures: Customs officers are empowered to inspect imported and exported goods suspected of violating trademark rights.
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Trademark Recordation: Rights holders may record their trademark with customs to enable proactive seizure and detention of infringing consignments.
Alternative Dispute Resolution (ADR) Mechanisms
Given the time and resource constraints associated with litigation, parties may opt for ADR as an effective alternative:
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Mediation: A voluntary and non-binding process where parties attempt to resolve the dispute with the help of a neutral mediator.
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Arbitration: A binding process where an arbitrator renders a final decision. Arbitration is particularly useful in resolving cross-border IP disputes involving commercial contracts.
Preventive Strategies for Trademark Protection
Prevention remains the most effective form of enforcement. Trademark owners in Nepal are advised to adopt the following strategies:
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Trademark Registration: Ensure timely registration with the DOI to obtain exclusive rights and statutory remedies.
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Surveillance and Monitoring: Conduct regular market inspections and monitor online platforms for possible infringements.
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Brand Protection Programs: Collaborate with legal counsel and enforcement agencies to build a robust brand protection strategy.
Conclusion
Trademark infringement in Nepal is a serious offense with wide-ranging legal consequences. The combination of civil, criminal, administrative, and border enforcement mechanisms provides a robust legal arsenal for brand owners. However, effective protection requires vigilance, timely registration, and strategic enforcement of rights