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March 2018 Cover Story

Published on: 2018-03-13 09:53:56     237 times read    0  Comments
Trademark Administration in Nepal

Administrating trademarks is a challenging task in any part of the world mainly because of the dynamics of a trademark as it concerns too many stakeholders.

--BY HOM NATH GAIRE

A  trademark often referred to as a ‘creation of the mind’ is an intellectual property. UK law defines a trademark as “a sign capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of another undertaking” while Section 2 (C) of Patent Design and Trademark Act, 2022 B.S  defines trademark as “a word, sign, symbols, or pictures or a combination  thereof to be used by any firm, company or individual in its products or services to distinguish  them the produces or services or others.” The Agreement on Trade Related Aspects of Intelectual Property Rights (TRIPs) under WTO framework gives a clear definition of trademark and its protection. Article 15.1 of TRIPs  mentions a trademark is 'any sign, or any combination of signs, capable of distinguishing the goods and services of one undertaking from those of other undertakings, thereof shall be registered and administered properly.’

With this background, it is clear that by using trademarks, businesses create distinguishing factors for their goods and services either through the shape of the goods, packaging or use of colours and are subject to registration and administration under the jurisdiction of the country’s law. 

However, administrating trademarks is a challenging task in any part of the world mainly because of the dynamics of a trademark as it concerns too many stakeholders. Initially, a trademark was supposed to be a way to identify the source of a product or service but gradually developed into the most valuable property of any business. Unlike other intellectual properties that are time specific and valid for a period of 20 years or so, trademarks are protected for an infinite amount of time as long as the owner continues it. This fact has also enhanced the value of trademarks. Trademarks are also a prominent part of foreign investment. Considering these dimensions including the importance of trademarks, it has been a prominent issue in Nepal’s domestic as well as international trade and investment. 

It has been 12 years since Nepal first became a member of the World Trade Organization (WTO). As a member of WTO, Nepal is expected to comply with intellectual property laws including trademarks.  However, Nepal has been constrained by obsolete laws, insufficient institutional mechanisms and limited resources. In such a context, there is a lot of discrepancy in what is expected and the reality. 

The most prominent aspect is that the trademark administration in Nepal is in a transition phase. The responsible officers at the trademark administration office have also realised that there should be a change in the law and procedures that have been used for the last eight decades. Further, the changes are required to be at par with the commitments under the WTO and World Intellectual Property Organization (WIPO) membership.

Changes are also required to meet the changes in national and cross border businesses. Multinational companies watch closely whether the Intellectual Property Bulletin being published by the Department of Industries (DOI) contains any trademark that happens to be similar to its own trademark. If they feel that any of the proposed trademarks may disturb the brand image of their product, they quickly file an opposition. Available statistics show that around 400 complaints are registered at the DoI claming infringement of trademarks, about one third of them filed by foreign busineses. Such data is sufficient enough to gauge the scenario of trademark registration and administration in Nepal. It is high time that the trademark administration system is made compatible with the global standard as we too are part of the global business process. 

In case of trademark disputes, such cases have to be settled through a scientific and well established mechanism with active involvement of both the parties. Mediation and arbitration are the common mechanisms in use and recommended by the WIPO. Although, Nepal has already promulgated the mediation and arbitration law for an alternative dispute settlement mechanism, it has not been effective as expected. Global experiences show that once the parties are engaged in the aforementioned dispute settlement mechanism and once they settle the dispute amicably, it may emerge as an opportunity in the future for both the parties to establish business relationships.         

It seems that the obsolete law, old institutional mechanism, weak institutional memory, lack of resources and frequent transfer of government employees are responsible for most of the constraints in the field of trademark administration which needs to be addressed as soon as possible. Although, there are things that can be done immediately within the present scenario to initiate immediate changes, the need of the hour is to introduce a comprehensive law on trademarks to address most of the critical factors. 

DoI should also consider the label, logo and symbol while examining trademark registration and not only the words, so that there is no confusion. DoI should also be proactive in publishing post registration and post renewal trademarks and repeal trademarks that are not in use. A standard criteria and procedure for this can be made in coordination with the private sector. 

On the other hand, the new law should provide space to make regulations, procedures and manuals for the administration of different forms of intellectual property including trademarks. DoI should be equipped with trained staff and other required resources. Trained staff should be retained in the trademark administration office for atleast five years. There should be a proper Management Information System (MIS) at the DoI or trademark administration office and strong coordination between the trademark registration office and the Company Registrar office (CRO). 

If there is coordination between the Office of the Company Registrar Office and trademark registration office, pressures to obtain certain trademarks can also be minimised. In the meantime institutional memory is also equally important for effective administration of the trademarks. 

It seems that some of the owners of well-known trademarks are reluctant to register their trademarks in Nepal either due to inadequate awareness or due to over confidence that trademarks in Nepal can be protected even without registration. We should give a clear message to the international community that those who are reluctant to register their trademarks in Nepal will not be protected, whether it is a well-known trademark or not.        

Statistics show there are around forty thousand trademarks registered with the DoI. Critics say that there is a tendency to apply for trademarks and hold it without bringing it into practice. Weak administrative confidence has been motivating such practices which in turn is hindering the effective administration of trademarks. In this context, the Ministry of Industry along with the DoI should work proactively in streamlining the trademark administration process by establishing a better legal base and other necessary arrangements.


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