Intellectual Property Right in Nepal and it related policies and regulations

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An Assignment on:
Existing and previous policies, legislations and activities on intellectual
properties in Nepal
Submitted To:
Assistant Professor, Pankaj Raj Dhital
Department of Agricultural Extension and Rural Sociology
Agriculture and Forestry University, Rampur, Chitwan
Submitted By:
Suresh Simkhada (ABM-06M-2016)
Department of Agricultural Economics and Agribusiness Management
Agriculture and Forestry University, Rampur, Chitwan
February, 2019

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Contents
Introduction:.................................................................................................................................................3
World Intellectual Property Organization (WIPO)..................................................................................3
a. Copyright ..............................................................................................................................................3
b. Patent ...................................................................................................................................................3
c. Industrial design ...................................................................................................................................4
d. Trade mark ...........................................................................................................................................4
e. Trade secret..........................................................................................................................................4
f. Geographical Indication........................................................................................................................4
Policies and Legislations related to Intellectual property rights in Nepal .................................................5
The Patent, Design and Trade Mark Act, 1965........................................................................................5
Copyright Act, 2002..................................................................................................................................5
Consumer protection act, 1998 ...............................................................................................................6
Constitution of Nepal 2015......................................................................................................................6
National Intellectual Property Policy, 2017.............................................................................................6
TRIPS on protecting Intellectual Property Right .........................................................................................8
Conclusion: ...................................................................................................................................................9
References..................................................................................................................................................10

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Introduction:
Intellectual property (IP) refers to creations of the mind, such as inventions; literary and artistic
works; designs; and symbols, names and images used in commerce (WIPO, 2019). Like any other
property rights, Intellectual property rights are the rights that allow creators, or owners, of patents,
trademarks or copyrighted works to benefit from their own work or investment in a creation.
These rights are outlined in Article 27 of the Universal Declaration of Human Rights, which
provides for the right to benefit from the protection of moral and material interests resulting from
authorship of scientific, literary or artistic productions. The importance of intellectual property
was first recognized in the Paris Convention for the Protection of Industrial Property (1883) and
the Berne Convention for the Protection of Literary and Artistic Works (1886). Both treaties are
administered by the World Intellectual Property Organization.
World Intellectual Property Organization (WIPO)
World Intellectual Property Organization (WIPO) is an international organization dedicated to
helping ensure that the rights of creators and owners of intellectual property are protected
worldwide, and that inventors and authors are therefore recognized and rewarded for their
ingenuity.
This international protection acts as a spur to human creativity, pushing back the limits of science
and technology and enriching the world of literature and the arts. By providing a stable
environment for marketing products protected by intellectual property, it also oils the wheels of
international trade.
There are few terminologies relating to intellectual property:
a. Copyright
Copyright is a legal term that describes the right given to the creators of a broad range of literary
& artistic works. It is a protection system that covers published and unpublished works, whatever
the form of expression provided such works are fixed in a tangible or material form. Copyright is
exclusive rights provided for original expression of creative thoughts, ideas and action and
performances may be a major tool for promotion of your business and profession. Original artistic,
musical literary or presentation and performances in the art and science add the original creations
that satisfy the consumer of the day may be the subject for copyright protection.
b. Patent
A patent is an exclusive right granted for an invention – a product or process that provides a new
way of doing something, or that offers a new technical solution to a problem. A patent provides
patent owners with protection for their inventions. Protection is granted for a limited period,
generally 20 years. New and inventive methods and the product produced thereby are the other
vital tools to promote ones business that makes one competitive in competition market to put new
and consumer friendly product in the market which may be the subject of patent protection.
Patents provide incentives to individuals by recognizing their creativity and offering the possibility
of material reward for their marketable inventions.

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c. Industrial design
An industrial design refers to the ornamental or aesthetic aspects of an article. A design may consist
of three-dimensional features, such as the shape or surface of an article, or two-dimensional
features, such as patterns, lines or color. Industrial designs are applied to a wide variety of
industrial products and handicrafts: from technical and medical instruments to watches, jewelry
and other luxury items; from house wares and electrical appliances to vehicles and architectural
structures; from textile designs to leisure goods.
New and original feature of the shape of a product that is being lunched in competition market
which attracts consumers’ attention and eye appeal to the product market is the subject for
industrial design protection.
d. Trade mark
A trademark is a distinctive sign that identifies certain goods or services produced or provided by
an individual or a company. Distinctive brand that one use in his/her product to identify one's
product that is of him/her and distinguish with other similar product lunched by competitor in the
competition market is another tool for promotion of one's business. One may use any dictionary
term or the term that one choose to use without having any dictionary meaning and descriptive
meaning of one's product or any sign, logo, color combination or combination thereof for branding
product. One also may choose particular sign to assure about the quality in one's product to the
prospective consumer of one's product or to create the image for product to put into the competitive
market. It is all about marketing on to one's business and product and institutionalizing the
goodwill attached therewith and that may be the subject of trademark protection.
e. Trade secret
Confidential information that has competitive feature and capacity used in one's business is vital
tool for enhancement and success of one's business. Unauthorized disclosure and use of such
undisclosed and confidential information are worthy enough for many fields of business that could
lead one's business to the end and failure, especially in the competitive market place. Thus, the
information which is being used in one's business, either in production business or in service
providing business, may be the subject for protection under the law of unfair competition and trade
secret protection.
f. Geographical Indication
A geographical indication is a sign used on goods that have a specific geographical origin and
possess qualities or a reputation due to that place of origin. Most commonly, a geographical
indication consists of the name of the place of origin of the goods. Agricultural products typically
have qualities that derive from their place of production and are influenced by specific local
geographical factors, such as climate and soil. Eg. Jumli and Mustang apple, Manakamana Orange,
Ilam tea, Bhojpuri khukuri etc.
There are several compelling reasons for protection of intellectual property rights. First, the
progress and well-being of humanity rest on its capacity to create and invent new works in the
areas of technology and culture. Second, the legal protection of new creations encourages the
commitment of additional resources for further innovation. Third, the promotion and protection of

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intellectual property spurs economic growth, creates new jobs and industries, and enhances the
quality and enjoyment of life. Intellectual property rights reward creativity and human endeavor,
which fuel the progress of humankind.
Policies and Legislations related to Intellectual property rights in Nepal
Nepal have formulated various act, policies and signed in different international treaties and
conventions relating to intellectual property for protecting intellectual property. Nepal had two
major pieces of legislation: The Patent, Design and Trademark Act 1965 and Copyright Act 2002,
enacted before Nepal became a member of the WTO. These laws are outdated and do not address
the recent challenges brought through technologies. Therefore, Nepal needs legislative reforms of
its Intellectual Property laws and had recently formulated new Intellectual Property Rights (IPR)
Policy in March 2017. The major legal provision on intellectual property right are discussed below:
The Patent, Design and Trade Mark Act, 1965
The Patent, Design and Trade Mark Act preserves intellectual property right by providing patent
right to the creator or innovator of the product. The Section 3(2) of the act mentions, “No one shall
copy or use or cause to use in the name of the others without transforming the ownership or written
permission pursuant to Section 21d, the patent registered in the name of any person pursuant to
this Act”. On violation of this section one can be charged up to two hundred and fifty thousand as
penalty. This act also protects design and trademark rights of innovators (GON, 1965).
According to the Patent, Design and Trademark Act, 2022, the department of industry shall register
the trademark in the name of the applicant based on necessary examination of a trademark
application. The department shall conduct necessary investigation and provide sufficient
opportunity to the applicant to defend his/her case and also conduct further inquiry before
registering it. The registered trademark will remain valid for seven years from the year of
registration and can be renewed every seven years for any number of times. Nepal does not
automatically recognize patents awarded by other nations. There is recognition that this is a
shortcoming in Nepal’s IPR regime, and it is likely that it will be reformed along with the new IPR
Law.
Copyright Act, 2002
Copyright Act, 2002 provides the exclusive rights to the creators/authors on their creations.
Copyright is the legal protection extended to the owners of the rights in an original work which
they have created. Copyright Act 2059 provides legal framework to protect intellectual property.
The section 3 of the act mentions:
I. Copyright protection shall be extended to any work
II. Any translation, arrangement, sequential arrangement of work or collection of works
presented as original from viewpoint of presentation, collection or expression, data or

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database readable with or without support of machine, any proverb, folktale, folk song
falling under folk expression or any other derivate works based on folk expression shall be
protected as original work, without prejudice to the copyright of the original work.
Section 6 provides economic right to the owner of work which means one have to pay royalty to
the creator on selling the product of that creator (GON, 2002).
The Copyright Act of 2002 covers most modern forms of authorship and provides adequate periods
of protection. Most of these policies are expected to be updated in accordance with new IPR Policy.
Nepal faces serious challenges in preventing the sale of counterfeit goods. Enforcement of IPR
violations is sporadic at best. Law enforcement officials do not receive adequate training on IPR
issues and offenders can often pay a small bribe to avoid prosecution.
Consumer protection act, 1998
The consumer protection act serves in intellectual property right by disallowing any one to imitate
any kinds of consumer goods to mislead the consumer. This means no one should copy any goods
from other invention without consent. Failing to do so may result in up to 5 years of imprisonment
or fine of one hundred thousand or both (GON, 1998).
Constitution of Nepal 2015
Intellectual property was not a priority for the government until recently, as the increasing
intellectual property disputes, growth of business, and the promulgation of New Constitution
received government attention. In 2015 Nepal took a historic decision to include ‘intellectual
property’ within the fundamental right chapter of the newly promulgated constitution of Nepal.
According to Article 25 “Every citizen shall, subject to law, have the right to acquire, own, sell,
dispose, acquire business profits from, and otherwise deal with, property”. On the constitution, for
the purpose of this article, Property means as any form of property including movable and
immovable property, and includes an intellectual property right (GON, 2015).
National Intellectual Property Policy, 2017
Nepal finalized a new Intellectual Property Rights (IPR) Policy in March 2017. The National
Intellectual Property Policy, 2017 incorporates wide issues relating to IP with a view to develop
balanced IP management system in Nepal. The policy seeks to:
 develop new legal framework or revise the existing ones for copyright, patent, industrial
design, trademark, geographical indication, plant species, trade secrets, integrated circuit,
layout design, traditional and indigenous knowledge, traditional cultural expression and
folklore, biodiversity and genetic resource in line with the country’s needs
 use existing traditional knowledge, biodiversity and geographical indication as a tool for
national development

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 use IP as a source for environment-friendly technology transfer, foreign investment,
research promotion and development of technical capacity and knowledge
 increase awareness about IP and its importance for the economic, social and cultural
progress of the society
 encourage commercialization of all forms of IP
 Develop strong laws and institutional and human resources to enforce protection of IPR
 Develop a separate institutional mechanism namely National Intellectual Property Council
to enforce effective execution of policies set out in the National Intellectual Property
Policy, 2017
 Develop a separate and integrated IP Office under MoI to look after the promotion,
protection and recording of IPR
This policy has been used as the foundation to prepare a draft Law on IPR, which is undergoing
review. There is reason to expect that the new legislation will represent a substantial improvement
over existing laws and regulations. Under the existing IPR regime, the Ministry of Culture,
Tourism, and Civil Aviation oversees copyright issues while the Ministry of Industry looks after
patent and trademark issues. However, the new policy calls for a single government entity to
enforce the range of IPR issues.
These were some of the collective reasons for the first national intellectual property policy, which
aims to create a balanced IP system in Nepal with a vision of “creating a creative nation through
preservation and provision of intellectual property protection” (GON, 2017).
The policy mainly focuses on three aspects. First, it aims to revise the existing legal framework,
recognize, and enact law related to geographical indications, petty patents, traditional
knowledge/culture, integrated circuit, plant variety protection, trade secrets and biodiversity. The
legal protection for geographical indications/traditional knowledge is very important for a country
like Nepal, it can be used as a tool for rural producers to enter niche markets which will contribute
to improving the living standard through increased incomes.
Second, it aims to introduce various programs to create awareness and promote intellectual
property rights. Awareness programs, inclusion of intellectual property related contents in higher
secondary curriculum, awareness through mass media, printed media etc. are the focused program
to create awareness regarding intellectual property right.
Third, the policy addresses the need to curb IP infringement and recommends revising penal
provisions under the existing legal framework. Furthermore, the policy establishes a National
Intellectual Property Council consisting of members from civil society, ministries, and experts to
facilitate and advise on policy issues.
The shortcomings in the policy is that the policy looks very general, and not issue based. The
policy is brought with good intentions and incorporates issues in the most comprehensive manner.
To conclude, the policy promises the rainbow dreams, which entrepreneurs, authors, farmers, and

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the industry has been dreaming in recent years. If the policy is taken seriously and all the proposals
are implemented, then Nepal will be able to create a balanced IP regime based on its social,
economic, and cultural practices.
TRIPS on protecting Intellectual Property Right
TRIPS came into effect on January 1995 as a multilateral agreement between WTO countries. Its
major objective is to provide strong and comprehensive protection for various forms of IP
throughout the world. It lays down certain minimum standards for national governments for the
regulation of copyright, trademarks, geographical indications, industrial designs, patents including
the protection of new varieties of plants, layout designs of integrated circuits and undisclosed
information including trade secrets and test data.
Trade-Related Aspects of Intellectual Property Rights (TRIPS) forms basis for protecting
intellectual property through its provision of protection in various areas. The areas and years of
protection include: 1) patent for 20 years, 2) Copyright and related rights for 25 to 50 years
depending upon work, 3) Trademark for initially for 7 years, 4) Industrial design for at least 10
years, 5) Layout design of integrated circuits for 10 years, 6) undisclosed information can be
protected as long as the information is kept secret.
The application of IPRs in agriculture, as allowed under TRIPS, has long been contentious, mainly
because of its provisions under Article 27. As a whole, Article 27 of the TRIPS Agreement deals
with patentable subject matter, mentioning which inventions WTO Members are obliged to make
eligible for patenting and what they can exclude from patenting (based on their own needs and
priorities). Inventions that can be patented include both products and processes, and should cover
all fields of technology, including biotechnology. Article 27.3 (b) allows governments to exclude
some kinds of inventions from patenting, i.e., plants, animals and “essentially” biological
processes. The Article, however, makes it mandatory for WTO Members to provide patent
protection to micro-organisms, and non-biological and microbiological processes, on the basis of
three patent eligibility criteria: they must be new, involve an inventive step, and should be
industrially applicable (Adhikari, 2018).

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Conclusion:
Attracting FDI has been the focus of each successive government over the last few years.
Constitution of Nepal 2015 and Nepal Investment Summit-2017 also encouraged the government
to prioritize intellectual property to improve the investment climate in Nepal. However, the
absence of appropriate IPR laws and policies has hindered their approaches to making Nepal a
prime FDI destination in South Asia. One of the main concerns of foreign investors here has been
the lack of an effective IPR regime in Nepal. They primarily seek exclusive protection and right
for their IPs in which they invest a huge amount of money. The importance of IPs is highlighted
by the fact that large global companies have been doing whatever they can to cash in on and secure
this particular asset class. Nepal can also benefit economically and socially by securing its specific
IP aspects such as indigenous knowledge, traditional art and craft, crops and plants and
geographical indications that have remained part of the history, culture and identity of the
Himalayan nation since long. Now the time has come for the government and lawmakers to realize
the importance and possibilities in IPR to ensure the country’s better future.
Agreement on TRIPS and formulation of various policies (IPR Policy 2073) and acts relating to
intellectual property are the milestones in protecting intellectual property however, the growing
internet access and inadequate legal framework to address online copyright issues are the biggest
concern for Nepal. The National Information and Communication Technology (ICT) Policy 2015
looks promising in safeguarding intellectual property issues online.

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References
Adhikari, K. (2018). Intellectual Property Rights in Agriculture: Legal Mechanisms to Protect Farmers’
Rights in Nepal. Kathmandu: Forum for Protection of Public Interest and South Asia Watch on
Trade, Economics & Environment.
GoN. (1965). The Patent, Design and Trade Mark Act 2022. Kathmandu: Nepal Law Commission.
GoN. (1998). The Consumer Protection Act 2054. Kathmandu: Nepal Law Commission.
GoN. (2002). The Copyright Act, 2059. Nepal Law Commission.
GoN. (2015). Constitution of Nepal 2015. Kathamandu: Ministry of Law, Justice and Parliamentary
Affairs.
GoN. (2017). National Intellectual Property Policy, 2073. Ministry of Industry.
Sharma, S., & Pandey, S. J. (2018, 3 12). Securing Intellectual Property Rights. Retrieved from New
Business Age.
Uprety, P. N. (2017). Nepal’s first national IP policy, 2017: never too late. Journal of Intellectual, 550-552.
WIPO. (2019, Feb 8). What is intellectual property? Retrieved from World International Property
Organization: https://www.wipo.int/about-ip/en/