Draft:Intellectual Property Law of Nepal

Intellectual Property (IP) refers to the creation of the mind, such as innovation, creativity and economic development. Other than property rights, intellectual rights are the right that allows inventors, or owners of trademarks, patents, or copyrights. Policies and Legislations Related to Intellectual Property Rights in Nepal Intellectual Property Rights (IPR) are legal rights granted to creators and inventors to protect their original creations and innovations. In Nepal, the legal and policy framework surrounding IPR has gradually evolved over the decades, shaped by global developments, domestic needs, and Nepal’s international obligations. The Government of Nepal has enacted several acts, adopted policies, and ratified international treaties to protect and promote intellectual property. However, despite these efforts, Nepal's existing IPR regime remains outdated and is in urgent need of reform to address modern challenges posed by technological advances and globalization.

The Patent, Design and Trademark Act, 1965 The Patent, Design and Trademark Act, 1965 (2022 B.S.) is one of the earliest legislations aimed at safeguarding industrial property rights in Nepal. This Act serves as the legal foundation for the protection and registration of patents, industrial designs, and trademarks.

Patent Protection The Act grants exclusive patent rights to inventors for new inventions that are capable of industrial application. Section 3(2) of the Act explicitly prohibits any person from copying, using, or causing the use of a registered patent in another’s name without proper ownership transfer or written consent from the patentee. Violating this provision can result in a fine of up to NPR 250,000, demonstrating the legal emphasis on protecting innovative efforts.

Nepal does not recognize foreign-granted patents automatically. This means that even if an invention is patented abroad, it must go through the domestic registration process in Nepal to gain legal protection—an area that has drawn criticism and is expected to change under upcoming reforms.

Design and Trademark Protection Under this Act, original industrial designs that are new and non-obvious can be registered for protection. Trademarks, defined as distinctive marks used to identify goods or services, are also protected. The Department of Industry is the regulatory authority for trademark registration. It examines applications, conducts necessary investigations, and provides the applicant an opportunity to present their case before a decision is made.

Once registered, a trademark is valid for seven years from the date of registration and can be renewed for unlimited successive terms of seven years each. However, critics argue that the law lacks clarity on newer issues such as digital trademarks and international branding.

Copyright Act, 2002 The Copyright Act, 2002 (2059 B.S.) modernized copyright protection in Nepal by providing a comprehensive legal framework to safeguard the rights of creators over their original works. This Act covers a broad range of creative works including literary, musical, artistic, cinematographic, and computer software.

Protection and Rights Section 3 of the Act states that copyright protection shall be extended to all original works, including derivative works like translations and adaptations, as long as they display originality in presentation. The Act also includes protection for folk expressions such as proverbs, folktales, and folk songs, emphasizing the importance of preserving Nepal’s cultural heritage.

Section 6 provides creators with economic rights, meaning others must pay royalties when exploiting the creator’s work commercially. Authors also enjoy moral rights, such as the right to claim authorship and protect the integrity of their work.

Despite the strong legal foundation, enforcement remains weak. The market is flooded with pirated books, counterfeit CDs, and software, largely due to poor monitoring, low awareness, and minimal legal consequences for violators.

Constitution of Nepal, 2015 The Constitution of Nepal, 2015, for the first time, explicitly recognized intellectual property rights as a form of property under the Fundamental Rights chapter. According to Article 25, every citizen has the right to acquire, own, sell, and earn profits from property, which includes intellectual property rights. This constitutional inclusion represents a landmark moment in the recognition of IPR in Nepal and signals a shift toward a more rights-based approach in national lawmaking.

By categorizing IPR as a fundamental right, the Constitution obliges the state to protect these rights and provides individuals a constitutional basis to demand enforcement and redress. This move has laid the groundwork for significant legislative reforms in the IP sector.

National Intellectual Property Policy, 2017 In response to increasing IPR-related disputes and the limitations of outdated legislation, Nepal adopted the National Intellectual Property Policy, 2017. This policy outlines a strategic vision to develop a comprehensive, modern, and balanced IP regime aligned with Nepal's economic, technological, and cultural aspirations.

Key Objectives of the Policy

Reform Legal Frameworks: The policy aims to revise existing laws and enact new ones covering not just patents, designs, trademarks, and copyrights but also emerging areas such as geographical indications, plant varieties, trade secrets, traditional knowledge, and genetic resources.

Leverage Traditional Knowledge: Nepal is rich in indigenous knowledge and biodiversity. The policy encourages the protection and utilization of these assets for national development, including commercialization and GI registration of unique products like Nepali tea and Pashmina.

Promote Innovation and Technology Transfer: By encouraging the development and use of environment-friendly technologies, the policy seeks to position IP as a driver for foreign investment, research, and sustainable development.

Awareness and Capacity Building: Public awareness on IPR is minimal in Nepal. The policy emphasizes IPR education at schools, colleges, and among SMEs to foster respect for creators' rights.

Strengthen Enforcement: The policy calls for the development of strong laws and dedicated institutions for the enforcement of IPR. This includes enhancing the capacity of the judiciary, police, and customs officials. Institutional Mechanisms:

National Intellectual Property Council: A proposed apex body to coordinate IPR-related policies, advise the government, and oversee implementation.

Integrated IP Office: A specialized office under the Ministry of Industry (MoI) is to be established to streamline IP registration, protection, and promotion efforts.

Challenges in Implementation Despite the clear roadmap provided by the 2017 policy, challenges persist:

Legal delays in updating existing laws and enacting new ones have slowed reform.

Poor coordination among government bodies weakens implementation.

Lack of technical expertise in patent examination, IP litigation, and policy formulation hampers effective administration.

Weak enforcement mechanisms allow piracy and counterfeiting to go unchecked, undermining the rights of genuine creators.

Conclusion Nepal's legislative and policy framework for intellectual property has come a long way since the enactment of the Patent, Design and Trademark Act in 1965. The Copyright Act of 2002 and the constitutional recognition of IPR in 2015 represent important milestones. With the adoption of the National Intellectual Property Policy in 2017, Nepal has articulated a comprehensive strategy to modernize its IP regime.

However, mere policies are not enough. To achieve real progress, Nepal must update its outdated laws, build institutional capacity, enhance public awareness, and ensure effective enforcement. As Nepal prepares to graduate from Least Developed Country (LDC) status, strengthening the IPR system is not just a legal obligation but also an economic necessity.