Yes, you can license your trademark in Nepal. The Patent, Design and Trade Mark Act 1965 (PDTA) expressly allows a registered proprietor to let another person or business use the mark through a written licence agreement. To have legal effect, the licence must be recorded with the Department of Industry (DoI) — otherwise the licensee is not recognised as a "registered user" and the use does not count as use by you.
Key Takeaways
- A trademark licence in Nepal requires a written agreement between you (the registered proprietor) and the licensee, and it must be recorded with the DoI to be legally effective.
- Only a registered trademark can be licensed — an unregistered mark has no statutory licensing framework under the PDTA.
- The DoI publishes the recorded licence in the Industrial Property Bulletin, making it part of the public record.
- A recorded licence protects both parties: it counts as "use" by the proprietor (guarding against cancellation) and gives the licensee standing to act against infringers.
- Quality-control provisions in the agreement are critical — without them, you risk a finding of naked licensing and possible loss of rights.
- Licensing is not the same as assignment (ownership transfer); with a licence, you keep ownership and ultimate control of the brand.
What does it mean to license a trademark in Nepal?
Licensing a trademark means you — the registered owner — give another person or company permission to use your registered mark in Nepal, while you keep full ownership. The arrangement is governed by Sec. 21D of the PDTA. You stay in control: the licensee uses the brand under the conditions you set, for the goods or services you approve, in the territory you define. In practice, this is how a foreign brand enters Nepal through a local partner, or how a Nepali business expands through franchise-style arrangements without selling the brand outright.
Is trademark licensing allowed under the PDTA?
Yes, explicitly. Sec. 21D of the Patent, Design and Trade Mark Act 1965 provides that a registered proprietor may, by a written contract, allow another person to use the trademark. The Act does not limit the type of licence — exclusive, non-exclusive, or territorially limited licences are all permissible as long as the agreement is in writing. Without this statutory provision, a licensee would have no legal standing as a user of the mark in Nepal. The section also requires the agreement to be produced to the Department of Industry for the licensee to be entered as a "registered user" in the official record.
Who can license a trademark, and who can be a licensee?
Only the person or entity that holds a valid, current registration certificate for the mark can act as the licensor. If your mark is still pending — filed but not yet through the 90-day opposition window and certificate stage — you cannot record a licence. The licensee can be any individual, firm, or company in Nepal; a foreign entity can also be a licensee, though in practice a Nepal-based licensee is far more common. The licensee does not need to hold a separate business registration to be named as a registered user, but the DoI will expect the agreement to clearly identify both parties with their legal names and addresses as registered in their respective jurisdictions.
What does the law require for a valid trademark licence?
The PDTA requires three things: a written contract, a currently registered trademark, and recordal of the licence with the Department of Industry. The written contract must define the scope — which goods or services are covered, the duration, any quality standards the licensee must meet, and the territory. While the Act itself is brief on contract formalities, in practice the DoI expects a notarised agreement. A common mistake we see is treating a simple letter of consent as a licence — that will not satisfy the DoI. You need a proper, signed, witnessed licence agreement that the Department can examine and record.
How do you record a trademark licence with the Department of Industry?
- Confirm the mark is registered. You cannot record a licence against a pending application. Pull your registration certificate; if you don't have it to hand, you can look it up through the DoI's records or use a trademark search to verify the status.
- Draft the written licence agreement. The contract should name the parties, identify the trademark and registration number, specify the NICE class(es) covered, set the term and territory, and include quality-control obligations. Both parties sign; notarisation is recommended.
- Prepare supporting documents. Alongside the agreement, you'll typically need a notarised Power of Attorney from both parties, a copy of the trademark registration certificate, and board resolutions if either party is a company.
- File the recordal application with the DoI. Submit the agreement and supporting documents to the Department. The DoI examines the submission and, if satisfied, records the licensee as a registered user in the trademark register.
- Publication. The DoI publishes the recorded licence in the Industrial Property Bulletin, putting third parties on notice of the licensee's rights.
What documents do you need to record a licence?
| Document | Required for | Notes |
|---|---|---|
| Written licence agreement | Both parties | Must be signed; notarisation strongly advised |
| Copy of trademark registration certificate | Proprietor | Shows the mark is in force |
| Notarised Power of Attorney | Both parties | Required by DoI practice for any agent-filed submission |
| Board resolution / authority to sign | Company parties | Confirms the signatory has authority to bind the entity |
| Application form (DoI format) | Proprietor | Obtained from the DoI or your agent |
What are the benefits of recording a trademark licence?
Recording the licence does more than just make it official. First, use of the mark by the recorded licensee counts as "use" by the registered proprietor — this is vital, because the DoI can cancel a registered mark that has not been used for one year under Sec. 18C. Second, a recorded registered user can, in its own name, initiate infringement proceedings in Nepal, which is a powerful tool if you are a foreign brand owner and your local partner spots counterfeits in the market. Third, the recording puts the arrangement on the public record, which deters disputes about who has the right to use the mark.
What common mistakes do people make when licensing a trademark in Nepal?
A surprisingly common error is trying to license an unregistered mark. The PDTA's licensing provision applies only to registered trademarks — if your mark is unregistered, the licence agreement has no statutory footing, and the DoI will not record it. Another mistake is failing to include meaningful quality-control clauses. Without them, a court or the DoI could later view the licence as a "naked licence" — one where the proprietor exercised no real control — and that can put the mark's validity at risk. Finally, some parties never file the agreement with the DoI, assuming a private contract is enough. It isn't: without DoI recordal, the licensee is not a registered user, and its use does not accrue to the proprietor under the Act.
How is licensing different from assigning a trademark?
Assignment means you sell the trademark outright — ownership moves from you to the buyer permanently, and the DoI records the change of proprietor. Licensing keeps you as the owner; you are simply granting a right to use, typically for a defined period and on defined terms. When the licence ends, all rights return to you. The documents differ too: an assignment requires a deed of assignment and a DoI recordal application for transfer of ownership, while a licence needs the written contract and a registered-user recordal. The practical question is control: if you want to keep the brand for the long term but let someone else build the market today, license; if you are exiting Nepal entirely, assign.
Can a foreign brand license its trademark to a Nepali company?
Yes. A foreign proprietor can license a registered mark to a Nepali entity, provided the mark is already registered in Nepal. The foreign proprietor must act through a Nepal-based agent or representative — this is the same requirement that applies to any foreign applicant under Nepal's non-Madrid, non-PCT system. The written licence agreement will need to be notarised, and if it is in a language other than Nepali or English, a certified translation should accompany the filing. The DoI records the Nepali company as the registered user. For many international brands in hospitality, apparel, and FMCG, this is the standard route to entering the Nepal market — and the recorded licence is what lets the local partner enforce the mark against copycats in Kathmandu and beyond.
A real-world example: a restaurant brand licence
Imagine a well-known Delhi-based fast-casual chain — let's call it "SpiceCircle" — that has registered its wordmark and logo in NICE Class 43 with the DoI. The Indian company wants to open three outlets in Kathmandu and Pokhara through a local hospitality group but does not want to sell the brand. They sign a five-year exclusive licence agreement covering Nepal, specifying that the local partner must follow the same recipes, interior design, and service standards as the Delhi outlets. The agreement is notarised, a board resolution from the local hospitality group is attached, and the whole packet is filed with the DoI through a Nepal-based IP agent. The DoI records the hospitality group as the registered user and publishes the entry in the Industrial Property Bulletin. Six months later, when a copycat "SpiceCircle Pokhara" appears, the recorded registered user can act directly — sending a legal notice and, if needed, initiating an infringement action — without waiting for the Indian proprietor to act from abroad. Without the DoI recordal, the local partner would have had far weaker standing.
What are the alternatives to a full licence recordal?
In some situations, a full licence recordal may not be what you need. A franchise arrangement — common in Nepal's growing QSR and retail sectors — typically uses a licence as one component within a broader franchise agreement, but the trademark-use element still requires recordal under Sec. 21D if the franchisee is to be a registered user. A distribution or reseller agreement where the local party merely sells genuine branded goods does not usually require a trademark licence, because the local party is not applying the mark to its own goods or services; it is simply reselling goods already bearing the proprietor's mark. And if what you actually want is to transfer the mark forever, the correct instrument is an assignment, not a licence. If you are unsure which arrangement fits your commercial goal, it's worth getting advice — the wrong structure can leave your mark exposed.
In short, licensing a trademark in Nepal is a structured statutory process: own a registered mark, sign a proper written agreement, and record it with the DoI to activate the full legal protections for both you and your licensee. The key is not just having a contract — it's having that contract on the public record through the Industrial Property Bulletin.
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If you're ready to license your trademark — or need to get it registered first so you have something to license — use our trademark search to check the register, or reach out to discuss a licence recordal. We can also help you structure the agreement to include the quality-control terms the DoI expects to see, and if a full registration is needed first, our trademark registration service handles the entire process end to end.
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