Intellectual Property Administration in Nepal                                           

Published on Dec 17 2015 // Featured, Nepal News, Opinion

By Bisu Kumar K.C

Intellectual Property

In general terms, ‘intellectual property refers to creation of the mind’ (WIPO). Creative or inventive works and distinctive sign or marks are taken as intellectual property. But there is not concrete definition of intellectual property. The term intellectual property, means Literary artistic and scientific works; performance of performing artists, phonograms, and broadcasters: inventions in all kinds of human endeavor; scientific discoveries; industrial design; trademarks and service marks, and commercial names and designations; protection against unfair competition; and all other rights resulting from intellectual activity in the industrial scientific, literary and artistic fields.” (WIPO)

All intellectual property rights (IPRs) generally exclude third parties from exploiting protected subject matter without explicit authorization of the right holder for the certain duration of the time. This enables the IPR owners to use or disclose their dissemination. It is generally assumed that IPR helps encourage creative and inventive activities and make for orderly marketing of proprietary goods and services. In the case of protection of distinctive signs like trademarks, the objective is that it avoids confusion among free riders and deception of consumers of differentiated goods and services. Protection against is the underlying philosophy of all IPRs, and there are some specific rules in international IP law targeted toward this. Protection of IPRs is meant for the general benefits and progress of society. (Watal, 2001). Today, IPR is regarded as a cornerstone of economic development of the society because it facilitates the growth of both domestic industries and culture, and international trade. Without IPR protection, it was not possible of present state of development. Therefore, development of a nation and advancement of a society also depend on the sound IPR protection and promotion system.

Lack of Policy and Program

As in the context of economic and social development, Nepal is regarded as the one of the least developed countries, in the same way it is also lagging behind in respect of the development of intellectual property system. “The intellectual property system is one of the corner stones of modern economic policy at the national level and a catalyst for development” (Alikhan; 2000). There are no specific policy guidelines or long-term vision document, regarding the intellectual property matter in Nepal. In the Tenth plan document intellectual property has been spelt out as a strategy for the industrial and R&D development. There are two sentences in two separate chapters of the 10th plan document, such ass entrepreneurial use of IP will be promoted through its protection’ and ‘in relation to the intellectual property right necessary record will be prepared’ (Tenth Plan). It can be taken as government recognition without programs and activities in this regard. In spite of these little policy guidelines, in course of WTO accession government has expressed its strong commitment for the development of IP system through enforcement of new Act that is compatible with TRIPS agreement within 2006. With regards the importance of IP tools for the development of the nation and its emergence in scientific, technological as well as in the national and international trade regime, it is obvious that a broad policy with clear vision, strategies and program is highly necessary in Nepal.

Intellectual Property Laws

“Strong intellectual property protection with adequate and modernized legislation and its effective enforcement is essential for ensuring economic growth” (Alikhan, 2000). First, intellectual property related law came into enforcement in Nepal in 1937 with promulgation of Patent, Design and Trademark Act. Provisions for the protection of industrial property of the nationals were included in this first act. Patent, Design and Trademark Act, 1965 replaced the first act and it is still in force. Present act also provides intellectual property rights to industrial property of foreign origin as well. This act, having undergone an amendment in 1987, regulates present industrial property system of Nepal.

The existing, Patent, Design and Trademark Act 1965 gives the definition of patent, design and trademark. Procedures for application, examination and registration are broadly written. Areas of protection and limitation of right of the owner are defined in the act. The registered patent and trademark shall be valid for a period of seven years and design for five years from the date of registration. The registered trademark should be renewed within 35 days from the date of expiry. Regarding the patent and design, registration can be renewed for only another two terms respectively. The act has the provisions for penalty and compensation against the violation of rights and the infringement.

However, present volume of economic activities, need of scientific and technological development, emergence of cultural industries, and sensitiveness of trade regime as well as compared to the international practice, the existing Industrial Property Act lacks in various respects. More considerable fact does not seem compatible with the provisions of Trade Related Aspect of Intellectual Property Agreement (TRIPS) and the Paris Convention for the Protection of Industrial Property. As a party of these international conventions and agreements, government has the obligation to make the national law conformity with their provisions. It is understood that a new Industrial Property Act is under the process of legislation since last decade.

Copyright Act deals with the important field of IPR, the right over the artistic and literary works, which is popular as copyrights. It came into the legal step only in 1965 by the enactment of Copyright Act, 1965. But the copyright sector has made significant improvement in legal arrangement for protecting the right of literary and artistic works with the enactment of new Copyright Act, 2002 which is compatible with various international conventions and treaties as well as national and international needs and practices.

Previous Copyrights Act has the various lacking in respect of the protecting right of creature of artistic and literary works. It was not compatible with the provision of Berne Convention; TRIPS  agreements and other international convention and treaties related to copyright and related rights. It was must to register to confer the right over the ones’ creative work. Terms of copyrights and neighboring rights were not clearly defined and not all types of rights as rights of performers, broadcasters, sound recorders etc. were included in that act. The provision of enforcement was not sufficient and clear. To address these lacking in the act, a new Copyrights Act was promulgated in 2002. This act is more compatible with international practice and will be able to address the need of copyright holder of the country.

The act has clearly defined various terms of copyrights and related rights. Rights over the different creative works as well as economic rights, moral rights performer’s rights broadcaster’s rights and rights of sound recorders are recognized and well defined in the act. As per the act, economic and moral rights of authors or creators are protected from the date of publishing to the 50 years of the death of right holder. To protect the right holder from infringement of their works and violation of right the act has applied civil and criminal remedies as well as border measures. The act has also mentioned the role of copyright registrar and royalty collection societies. For the full functioning of this act, ‘Copyright Rule’ has come into the force and ‘Registrar’s Office’ has been set up recently.

Besides this Act, some other acts are also supporting to intellectual property system of Nepal. Industrial Enterprise Act 1992 contributes to control false inductions and anti-competitive practices. In the same way Foreign Investment and Technology Transfer Act 1992 has the provision on technology transfer and franchising technical know-how. Company Act 2054 contributes to regulate company names, i.e. trade names and Export Import (Control) Act 1957 controls the export and import of commercial goods.

Administration of Intellectual Property

As mentioned in above paragraph, there are two basic acts for the protection of IPR in Nepal as Patent Design and Trademarks Act 1965 and Copyrights Act 2002. Implementations of these acts fall under the perview of two separate ministries such as Ministry of Industry, Commerce and Supplies and Ministry of Culture, Tourism and Civil Aviation.

Under the policy directives from the Ministry of Industry, Commerce & Supplies, the Department of Industries (DOI) is the designated as responsible agency of HMG for implementation of Patent, Design and Trademarks Act. Therefore, it is regarded as ‘Industrial Property Office’ in the country. DOI also looks after the industrial promotion, administration and facilitation of Foreign Direct Investment in the country. The administration of industrial property is the responsibility of Industrial Property Section of this department. This section provides the followings services in respect of industrial property only on the matter of patent for inventions, industrial design and trademarks:

  • Filling of application.
  • Provides search reports on request with the prescribed fee. The search is carried out in the previous registration records.
  • Examination of registrability of applicants of inventions designs or marks.
  • Renewals of the registered patent, design and marks as per the act,
  • Investigation of infringement and violation of IP rights up on the complaint made by right-holder,
  • Give the order of penalty, and confiscation of thins involved in infringing or violating the others IP rights,
  • Publications of journal yearly with information of registration, renewal, cancellation of patent, design and marks, decisions on case of infringements, as well as major activities carried out by the department in respect of IPR.
  • Advice and consultation to the needy person and organizations for the possible measures of protecting IP.
  • Organization of meeting seminar with the cooperation of other national and international organizations for enhancing awareness among the entrepreneurs and general people and for the development of IP system.

Records of Industrial Property Section of DOI, shows that there are total 18,969 marks, 60 industrial designs and 53 patents have been registered till March 2002. Only patent for invention, industrial design and trademarks (including service marks) are dealt as industrial property. Other types of property like utility model, integrated circuit topographic, various types of marks as group marks, certification marks, geographical indication as well as appellation of origin are not covered by the administration of industrial property. Even transition regarding the patent and design are not sizable to analyze. Regarding the number of registered marks, more than 48Ü are of foreign origin.

Status and Issues of IP Administration

A strong and well functioning intellectual property system is an essential factor in the economic and technological development of all the countries. For the efficient and effective IP system, it is presupposed and adequate legal and administrative infrastructure in the country. In Nepal, intellectual property right law was introduced 70 years ago. As illustrated previously 50 patents, 60 design and 18696 trademarks have been registered as industrial properties. Among the registered IP, about half are of foreign origin. Regarding the research and development, about 50 sciences and technology related institutions, five universities, about 250 large industrial establishments, more than 200 professional organizations and many small workshops and manufacturing enterprises are there involved in the technology field but have not made single patent application. In the same way, other IP related business and transactions as technology transfer or licensing, buying and selling of IP are very few. With regard the cases on IP right violations are also not so much as expected. With observation of curriculum of teaching and training institutions of Nepal, it is noticed that still ‘Intellectual property’ has not been established as an academic subject for teaching and as a necessary field of knowledge and skill for training.

This is the poor scenario of intellectual property system of Nepal. But there is a big challenge not only for the public sector but also for private sector to strengthen, develop and modernize the IP system to follow present open and market-driven economic system and international economic and trade relations. For the overall development of IP system of the country IP administration can play a major and leading role. With available manpower, legal provision and other resources, the Industrial Property Section is doing a lot. However, the entrepreneurs and other IP service-users have viewed that present IP administration is not user-friendly, transparent, efficient and easily accessible. To support the small entrepreneurs, technologist, scientist and all types of creative works, the IP administration must be changed, improved and developed in multiple dimensions. To meet the challenge of new economic trend and international practice and to bring majority section of IP-users of the country within the administration, it has to change its working culture from administrator to promoter, facilitator, adviser and educator.

“Currently, the administration of industrial property system is based on work practices and procedures which are neither transparent nor user-friendly, they are not conducive to efficient and effective disposal of work ” (WIPO Mission, 1996). Enforcement is hampered by inadequate administrative capacity (MOICS, 2004). Following issues are there in respect of industrial property administration:

  • Present IP administration has no separate identity.
  • It is not easily accessible to all the entrepreneurs, especially to small enterprises scattered in different parts of the country.
  • Its functions and procedures are not transparent.
  • There is lack of sufficient laws, regulations and examination and administrative manuals.
  • There are not adequate numbers of trained manpower, especially trademark and patent examiners.
  • Lack of systematic record system and search database.
  • Lack of IP information and promotional services.
  • There is no imitation for enhancing the market of IP service.
  • The enforcement of IP right is the main function of IP administration, which is very poor in quantity and quality as well.

Suggestions for New Set-up

“The national and regional patent and trademark offices and their infrastructure should be proactively modernized and computerized, taking steps to make them responsive, user-oriented and helpful in rendering quality services to all categories of their clients, and to meet the growing demand of their users. Their administration might be made autonomous and self-financing, with suitable increase in fees where considered necessary.”(Alikhan, 2000)

As based on above discussions, it is perceived that there is an urgent need to set up a separate Industrial Property Office as an independent government organization with sufficient authority and necessary autonomy.

Considering the expected role of new IP office and need and urgency of providing IP services to all possible IP users and promoting and enhancing the IP system in the country, industrial property administering institution should have separate functional wings for trademarks and other marks administration, patent and design administration, enforcement and litigation functions, development and promotion activities as well as to enhance the international cooperation.

The proposed industrial property administration must be equipped with new industrial property act with covering administrative and enforcement requirements and conformity with international treaties and practices. Necessary regulations for administration and litigation and separate manuals for search and litigation and examination of trademarks and patent for other IP tools are also required.

Trained and learned personnel are basic requirements for the efficient and effective IP administration, so, adequate number of trained people especially in the field of patent examination, trademark examination and enforcement measures are to be fulfilled.

IP administration and its network within the country and outside is very complex. Considering this fact and practice of other countries, sufficient authority and necessary autonomy is to be provided to IP administrative office for the administration, enforcement and development of IP system, providing training and manpower development, to extend relationship and cooperation with private  and international organization, to provide facilities and incentives to small enterprises and inventors and determine the fees of service must be provided to the IP office.

Special arrangements should be made regarding the revenue collection from IP services. IP office should have the authority to determine the various fees of the services and to use certain percent of revenue for the development of IP. These kinds of arrangement could contribute significantly for the development of IP system in the country.

Regarding the copyright and related right administration after enactment of the new Copyright Act and Rule. According to the new act, registration is not necessary for copyright and enforcement of the right is investigated by the police administration and litigation process goes to the district courts so that copy rights registrars’ office has to focus its activity to awareness campaign for the artists, authors and also to the small entrepreneurs.

Enforcement of IP right is concerned with police administration, judiciaries and custom officials also. To enhance the use of IP tools, it is necessary to strengthen enforcement system. So there is necessity to create the core group of police officers, custom official and judges with sufficient knowledge on IP. For this purpose separate group training courses should be conducted. To this end, the National Police Training Center, Justice Administration Training Center and Revenue Administration Training Center will be partners.

Presently, business development service to the small and micro-industries are being provided directly by the Department of Cottage and Small Industries (DCSI) and Cottage and Small Industry Development Board. Industrial Enterprises Development Institute is imparting training and consultancy for the enterprises. Federation of Nepalese Chamber of Commerce and Industries (FNCCI) and Federation of Nepalese Cottage and Small Industries (FNCSI) are private organizations of the Nepalese business sector. Institutional framework of these governmental and private organizations will be helpful for IP related business development service also. These organizations will be the partners for providing IP related trainings, distributing informative materials are launching awareness campaign etc.


  • Alikhan, Shahid (2000), Socio-economic Benefits of Intellectual Property Protection in Developing Countries, published By: World Intellectual Property Organization, Geneva.
  • Copyright Act, 2002.
  • MOICS/Ministry of Industry, Commerce & Supplies (2004), Nepal Trade and Competitiveness Study.
  • Patent, Design and Trademarks Act, 1965, Published by: Department of Industries, Tripureswor, Kathmandu, Nepal.
  • Tenth Plan 2002, Published By: National Planning Commission, Kathmandu, Nepal.
  • Watal, Jayashree, 2001. Intellectual Property Right in WTO and Developing Countries, Published By: Oxford University Press.
  • WIPO/World Intellectual Property Organization, Geneva, An organization for the future FAQS.
  • WIPO/ World Intellectual Property Organization, Geneva, Convention Establishing the world Intellectual Property Organization (WIPO Convention) Stockholm, 1967.
  • WIPO/World Intellectual Property Organization, Geneva, Report of the Mission Visited to Nepal to study the IP system. 

(Courtesy: Prashasan, 102nd Issue, 2062 BS)



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