1. Infringement of Trademarks in Nepal
In Nepal, the Patent, Design, and Trademark Act, 1965 (2022) protects trademark infringement. The rules governing trademark registration, protection, and infringement penalties are clearly defined in the Act.
The Department of Industry and the High Court and Supreme Court of Nepal are the offices in Nepal that protect trademark infringement. Section 19 of the Patent, Design, and Trademark Act of 1965 (2022) includes a provision that penalizes and confiscates unauthorized use of a mark that is identical or deceptively similar to a registered trademark with a 1 lakh fine.
The unauthorized use of a trademark or service mark is referred to as trademark infringement. This usage may be in connection with goods or services and may cause confusion, deception, or misunderstanding about the actual company from which a product or service was obtained.
If trademark owners believe their marks are being infringed on, they can file a lawsuit. If trademark infringement is proven, a court order can prevent a defendant from using the mark, and the owner may receive monetary compensation.
When a typical consumer looks at a trademark, he or she is likely to be confused about the origin of the goods or services. In Nepal, two types of trademarks are legally protected.
The need for trademarks can be viewed as a three-pronged approach to representing goods or services by: – assisting consumers in recognizing the source – assisting consumers in determining the quality – assisting consumers in making a purchasing decision once a trademark has acquired such value, it is critical to protect it from misuse and infringement by others.
- Authorized Trademark
- Unauthorized Trademark
1. Authorized Trademark
A registered trademark is one that has been registered in Nepal under Section 18 of the Patent, Design, and Trademark Act of 1965. (2022).
b. Authorized trademark is a symbol, word, or combination that represents a company or a product and distinguishes it in the market.
c. Nepalese law protects a trademark owner’s exclusive right to use a trademark when the use of the mark by another is likely to confuse consumers as to the source or origin of goods.
Article 6 quinques A (1) of the Paris Convention states that “every trademark duly registered in the Country of Origin shall be accepted for filing and protected as in the other countries of the Union…”
2. What documentation is required to file a trademark infringement claim?
To file a trademark infringement lawsuit, carefully consider what elements are required and how to gather evidence.
It needs to be registered in Nepal. Any individual who wishes to register its business or transaction trademark should do so in accordance with Section 18 of the Act by submitting an application in the manner prescribed. After the registration process is completed, the business can be operational. Section 18 (b) prohibits using the trademark as a registered trademark without first registering it with the department.
If a trademark is only registered in a foreign country, the concerned individual’s right cannot be established unless the trademark is registered in Nepal, as stipulated by the Act.
To file a trademark infringement lawsuit, a plaintiff must demonstrate that it has a valid mark that is entitled to protection and that the defendant used the same or a similar mark in business activity in relation to the sale or branding of goods or services without the plaintiff’s permission.
3. What happens if it isn’t registered in Nepal?
a. Nepal has ratified the Paris Convention. If it is registered in the country of residence and the said brand has earned good will through advertising and based on the good will earned by its product in several countries. Then, in accordance with the Paris Convention, it can be registered in Nepal.
b. The plaintiff must also show that the defendant’s use of the mark is likely to cause confusion about the defendant’s affiliation, connection, or association with the plaintiff, or about the plaintiff’s origin, sponsorship, or endorsement of the defendant’s products, services, or business activities.
c. Three distinct elements are required to establish a trademark infringement claim: the use of the trademark in commerce, the creation of a likelihood of confusion, and the creation of a likelihood of confusion. “Use”– As a threshold matter, “use” of a trademark by an alleged infringer must be established. Any number of activities can be considered “in commerce” or create a “likelihood of confusion.”
d. In commerce: The statutory requirement that an alleged infringing use of a trademark be “in commerce” in order for a claim of infringement to be established. The plaintiff must demonstrate that the allegedly infringing activities have a significant impact on interstate commerce in order to satisfy the “in commerce” requirement. The following activities are examples of those that meet the “in commerce” requirement: The alleged infringer’s advertising in more than one state; Interstate transportation of goods bearing an infringing mark from the manufacturer to the seller; sending a product to another state in order to register a trademark;
e. Likelihood of confusion: The central focus of any trademark infringement claim is the likelihood of confusion. When consumers see the allegedly infringing mark, they are likely to believe that the product or service it represents is associated with the source of a different product or service identified with a similar mark.
f. Actual Damages: A successful plaintiff can recover not only the defendant’s illegal profits, but also the plaintiff’s actual damages. This typically necessitates proof of actual confusion that resulted in a monetary loss, which can be demonstrated through evidence of diverted sales or consumer survey evidence.
Economic loss must be demonstrated through lost profits (i.e., revenue earned by the owner if the infringement had not occurred) or loss of goodwill (determined by comparing the value of goodwill before and after the infringement).
If a plaintiff can show that it competes in the same market as the infringer, the plaintiff may be able to demonstrate loss from corrective advertising costs (incurred to correct public confusion caused by the infringement but not exceeding the value of the mark). If a trademark infringement lawsuit is filed and established in Nepal, a damage lawsuit can be filed. Despite the fact that there is no practice in filing a damage lawsuit, it is beneficial.
g. Make a vicarious liability claim: If a company violates the Act, the entire company is liable. As a result, not only the primary infringer, but also every person responsible for the company, will be held liable for infringement, with the exception of someone who acted in good faith and was unaware of the breach. Vicarious liability has the following components:
When the individual has control over the main infringer’s activities; when the individual is aware of the infringement and contributes to it; and when the individual stands to profit financially from the infringement. The only time a company is exempt from vicarious liability for infringement is when it acted in good faith and had no knowledge of the infringement.
h. Penalties for trademark infringement
In Nepal, trademark infringement is a non-cognizable offense, which means that the infringer may only face civil charges rather than criminal charges.
As previously stated, this is due to the common law principle of passing off. In the event of trademark infringement, the court may award the following remedies:
- Temporary injunction
- Permanent injunction
f you need such legal assistance, please contact us at +977-9849517735 or info@corporatelawyernepal.com.np
Alpana Bhandari is a founding partner and CEO of Prime Legal Consultants and Research Center. She graduated from American University Washington College of Law. She specializes in corporate/arbitration and family law.
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