Why Register Your IP in Nepal

IP rights are territorially limited, meaning IP rights granted and protected in one state are independent of those granted in another. Hence, firms and individuals seeking to protect their intellectual property rights in multiple territories must obtain rights in each jurisdiction separately. As a result,  for firms and individuals operating internationally, cost-benefit concerns and resource allocation become important considerations when seeking IP rights in a specific territory. A firm may decide not to acquire IP rights and monitor its enforcement in a particular jurisdiction for several reasons, including the ones below:

• The firm doesn’t formally operate in a given state or territory
• The state or territory comprises a nominal market share of the product  in question, so the firm doesn’t expect to lose much from IP infringement in the territory
• The state or territory has a reputation for poor enforcement of property rights such that the firm doesn’t expect to gain much from acquiring the IP rights
• The trademark under question has acquired “well-known” status and hence enjoys automatic protection under the prevailing laws of the territory under consideration

Due to its relatively small population and Least Developed Country (LDC) status, Nepal is a low-priority territory for many international brands to protect their IP rights. In this article, we present a compelling case for the potential gains (or avoided losses) that can be reaped from acquiring and enforcing IP rights in Nepal. With its specific legal provisions and strategic geo-political location, Nepal can have an outsized influence on a firm's IP rights and brand value. By proactively registering and monitoring the enforcement of your IP rights in Nepal, you can secure a substantial competitive advantage. Consider the following reasons that might pique your interest:

Future Market Expansion

Even if Nepal is not currently on your radar as a potential market, preemptively securing your IP rights saves you from possible legal barriers to future market expansion. Under section 21B of The Patent Design and Trademark Act, 2022 (1965) of Nepal, which states, “The title to any patent, design or trade-mark registered in a foreign country shall not be valid in Nepal unless it is registered in Nepal by the concerned person.”, Nepal grants IP rights only if the IP is registered in the country. Furthermore, IP rights in Nepal are granted based on the first-to-file principle, as laid out in the precedent set by the Honourable Supreme Court in Madan Prasad Lamsal V. Repsona Publication, Case no. 8686.

Consequently, if someone attempts to register an IP in Nepal, say a trademark identical to that of a brand popular elsewhere, they can do it easily. This could lead to a situation where the original bearer of the trademark will face an uphill battle to reclaim their IP rights under the prevailing laws of Nepal, posing a significant threat to your IP rights. 

Bolstering IP Rights and Brand Reputation in India and China

Nepal is sandwiched between India and China, the two most populous countries and among the fastest-growing economies in the world. Nepal enjoys liberal trade agreements with both countries. India, in particular, allows a wide range of Nepali goods quota-free and duty-free access to its market. So, if you have secured your IP rights in India and China but not in Nepal, goods and services infringing your IP may be produced in Nepal and sold in the other two countries. While India and China's respective laws may prohibit importing such goods and services, it is often easier and more cost-efficient to nip the problem in the bud.

IP Infringement and Tourism

The issue extends beyond the infiltration of IP-infringing goods and services into the countries of your interest. Equally concerning is the presence of individuals from these countries in regions where your intellectual property isn't safeguarded. This situation threatens your brand's integrity and value, potentially resulting in brand dilution.

For instance, in 2023, Nepal attracted over a million tourists, many of whom ventured into its remote areas to experience the untouched beauty of the Himalayas. Notably, with limited government oversight, these remote regions become targets for deliberate and malicious IP infringers who exploit the absence of regulation to promote and sell counterfeit goods.

Tourists encountering such infringement could degrade your brand's reputation and diminish its value. 

Cost Effective and Straightforward

The main premise of this article is that it may be a financially wise decision not to protect your IP in certain territories under certain circumstances. Notably, neither cost nor other resources are likely an issue if you want to register your IP in Nepal so long as the IP has been registered elsewhere and no similar IP is registered in Nepal. 

The official fees for most IP-related activities in Nepal are under 75 USD. Furthermore, your IP filing may be exempt from any enquiry if the IP is registered in any other country.

Section 21C of Patent Design and Trademark Act, 2022 (1965) states, “The Department may register patents, designs and trademarks registered in foreign countries without conducting any enquiries if an application is filed for their registration along with certificates of its registration in a foreign country  and the Department shall provide the facility of pursuant to the Paris Convention for the Protection of Industrial Property 1883 to the registration holder.”