Fighting over a trademark might sound strange to you, but did you know once a company called Kansai Nerolac Paint Ltd had to fight a 7-year court battle to regain their “Kansai Nerolac” trademark in Nepal!

Why? 

Another company Rukmani Chemical Industries got the trademark registered exploiting the legal framework of Nepal.  Because, trademark law in Nepal follows the “first to file” system of trademark registration and protection. Rukmani Chemical Industries being the first one to register the “Kansai Nerolac” trademark, got the ownership and all the rights associated with that trademark.  

Sometimes a minor mistake and negligence in a business can lead to a significant loss.  Kansai Nerolac Paint was a big company, so it fought back and regained its trademark. 

But think about companies not as big as Kansai Nerolac that might lose their trademark to any other company just because someone exploited the legal system to gain ownership over the intellectual property rights that were not theirs. 

So, it's better to be safe than sorry, right? If you are a new entrepreneur and don't know about what a trademark is and why you need it and don't want to repeat the same mistake as Kansai Nerolac did, then you've come to the right place.  

Protecting your trademark in Nepal

Building a perfect business takes a lot of time, money, effort and resources. After many sacrifices, hard work, sleepless nights, struggle, downfall and failure, the entrepreneurs are finally able to establish their venture. Many entrepreneurs are more focused on the promotion and expansion of their business, so they often forget to take necessary measures to protect all the hard work and investment i.e., the registration and enforcement of the trademark. Trademarks are one of the most valuable assets in any business.

So, let's dive into what trademarks are, why they’re valuable and how to protect them.

What is a Trademark?

A trademark is a word, phrase, symbol or design that identifies your goods and services and distinguishes your brand from competitors. Think about your favorite brand, what comes to mind?  The odds are you remember the logo, the name, phrase, symbol or any unique feature associated with it, because a trademark is what distinguishes any product from that of its competitors.

For example, the brand name KFC and its symbol are the company’s trademark. Same goes for Apple and its iconic half eaten apple logo, Nike and its “swoosh” logo.

A trademark is what gives an exclusive recognition to your product meaning what helps the customer distinguish a particular product from others.

Why are trademarks valuable?

Whatever industry you work in, the market is probably competitive. To be noticed among the crowd, you must exert every effort. Customers can easily recognize you and your brand when you use a trademark. They can recognize your logo, name, or even slogan, which makes it simple for them to choose to make a purchase. There is no chance for any misunderstanding. Some companies have web pages that only include the company name as their only immediately recognizable distinctive feature. In such cases, customers may become uncertain as to whether they are visiting the company or one that is faking it.

Furthermore, similar to your real estate, machinery, and automobiles, your trademark can be a source of income. If your company is prosperous, your brand will grow over time. The higher that valuation will be, the better your reputation is. One benefit is that if you decide to expand into additional products, people will be able to see that they are from a trusted source. Your trademark will increase the value of the acquisition if you ever decide to sell your company. A trustworthy brand can also be licensed and sold for other revenue streams.

As you can see, a trademark entails more than just your company's name or logo. You require it as a significant asset to maximize the profitability and success of your company.

Why to protect a trademark ? 

Imagine you finally build a brand after years of sacrifices and hard work. Customers love your product, and the sales are great. However, some other companies copy your products and make counterfeit products which confuse the customers and divert them. It happens to every well-known brand in the world. For example, Hong Kong's market sells all forms of counterfeit products of well-known brands at much less price. The irony is people buy them. People are waiting for the arrival of a new product with higher brand value so that they can imitate it for cheap and acquire all the customers. The counterfeit products will not only divert the customers but also decrease the brand value and goodwill of your company. All the money and effort invested into your business will unjustly enrich other people. So, protecting your trademark can help you fight against such counterfeit products and save the goodwill of your company. 

Furthermore, registering your trademark is more crucial than ever if you want to guard against future legal issues for your business. Even if you previously used it, when someone registers your brand, they can be the owner. You could try to get it back, but the cost of doing so will undoubtedly pause your expansion strategy. In the worst situation, it might force you out of business.

How to protect a trademark ? 

Now since you are aware of how important a trademark is for your business and why it requires protection. Let us see how we can protect such a valuable asset. The first step to protect your trademark is to register your trademark. So, let us discuss the registration procedure of a trademark in Nepal. 

The Patent Design and Trademark Act, 1965 governs the registration procedure of the trademark in Nepal. The Department of Industry ("DOI"), which functions under the Ministry of Industry, Commerce, and Supplies of the Government of Nepal, is the competent authority to register trademarks in Nepal.

So you are ready to go to DOI to file a trademark application. Do you think you forgot something? Let's check.  

There are about 45 classes of trademarks in Nepal. Class 1-35 are for products and Class 35-45 are for services. Before submitting your application you must ensure that your product is placed in the right class. For example, if your product is a jewelry product, you must include class no 14 in your application. If the class of product is mistaken in your application, your application will be rejected. 

You might also wonder if you could use a pre-existing trademark, for example, Apple. If your product doesn’t fall into the class of mobile phones or any products produced by Apple Inc, then you are good to go. You can only use a pre-existing trademark containing generic terms such as apple, earth, etc. if they are in a different class and the product does not affect each other’s market. 

After making sure of everything, when you go to DOI to file a trademark application, the application is checked twice after submission.  In the first place, formalities, and in the second place, if the applied trademark can be registered or not. The DOI takes roughly six and a half months to review the requested trademark. If the trademark office determines after inspection that the trademark is registrable, they will make it public knowledge by publishing it in the Industrial Property Bulletin. Within 90 days of the day the bulletin was published, anyone who objects to the published mark may register an opposition against it. The trademark application matures into registration if no opposition is lodged within 90 days. 

Here is an overview of the trademark registration process in Nepal:

Step 1: File application along with required documents (listed below)

Step 2: Preliminary Examination of the trademark application by DOI.

  Step 3: Publication of the trademark in Industrial Property Bulletin. 

Step 4: Registration of the trademark. 

It may take about 9–12 months from the filing date to get the registration certificate, given that the required documents are submitted along with the application and if no opposition has been filed against the trademark by the Department of Industry or another party. A trademark that has been registered is good for seven years and may be renewed.

The required documents for registration of trademarks for a company are as follows: 

• A trademark registration application in the prescribed format.  
• Four samples of the trademark to be registered (up to 8*8 cm). 
• Company/ Industry /registration certificate  of the proprietor/company. 
• PAN/VAT registration certificate and Tax clearance of the company. 
• BOD minute of the company. 
• Power of Attorney with full disclosure of information of the authorized person. 
• Commitment letter of the company to use the trademark within one year of registration. 
• Receipt of the fee paid for registration of the application. 

Nepal follows the "First to File" principle, therefore trademark protection is not provided to any foreign trademark unless they are the first to register the trademark in Nepal. The registration process of the foreign trademark is similar to that of the local trademark. However, the required documents for the registration are different to that of the local trademark which are enlisted below: 

• A trademark registration application in the prescribed format.  
• Home registration certificate (the registration certificate of trademark registered in their home country) 
• Four samples of the trademark to be registered (up to 8*8 cm).
• Letter related to priority date.
• Power of Attorney (full disclosure of information of the authorized person) along with contact address in Nepal  
• Receipt of the fee paid for registration of the application.  

(An applicant can make a priority claim for up to 6 months as a facility assured by the Paris Convention 1883.)

How long does a trademark registration remain valid? 

A trademark certificate once issued is valid for seven years. The trademark holder must renew the trademark every seven years along with the renewal charge of Rs. 3500 . After which trademarks must be renewed within 35 days  after the expiry of the validity. Furthermore, trademark can be renewed along with a penalty of Rs. 1000 within 6 months from the expiry of the said 35-day period. Failure to renew the trademark even for the said period might  result in the deregistration of the trademark. 

After the deregistration of your trademark, if a new trademark application with similar trademark is filed in the DOI, the DOI accepts the application and the trademark owner without any objection gets the ownership of the “YOUR” trademark. It means you end up losing all the goodwill, brand value, and even the sales associated with the trademark  to the new trademark owner. So, the renewal of a trademark is as necessary as its registration.

Documents required for renewal of trademark  

• The original certificate of trademark registration. 
• Receipt of the fee submitted for renewal of the trademark. 
• Evidence of renewal of the company/business. 
• Evidence of use of the trademarks. 

 What are the benefits of registering your Trademark in Nepal ? 

1. It grants the trademark's owner the only right to use the mark and associate its name with products made or services performed by it.
2. It offers initial proof of ownership and reliability.
3. It permits the use of a registered trademark or other appropriate acronyms to show trademark ownership.
4.  It prevents unfair  competitors from making use of the registered mark.

Still confused? Why not Book a Free Consultation Call with us! Also, don’t forget to share this to your friends who are starting up or own a business because sharing is caring.