Counterfeit Goods in Nepal: The Law and Real Risks

Nepal's counterfeit law is short and blunt. Copying a registered mark without written permission is an offence, and the penalty is a fine and confiscation of the goods connected with it. The confiscation is the part most pages leave out.

Key takeaways

• Sec. 16(2) bans copying or using a registered trade mark without a transfer of ownership or written permission.
• Sec. 18B separately bans presenting a mark as registered when it is not.
• Sec. 19 backs both with a fine and confiscation of the goods, on the Department's order.
• Sec. 25 lets the Department order compensation for the loss the owner actually suffered.
• Rights come from registration, so an unregistered brand has a harder, evidence-heavy passing-off route.
• Protection is class-bound, so check that your class covers the goods actually being copied.
• An appeal against a Department order runs on a 35-day clock under Sec. 27.

What does the Act actually prohibit?

One sentence of the Patent, Design and Trade Mark Act 1965 carries most of the weight. Sec. 16(2) says no one shall copy, use, or cause to be used in the name of another, a trade mark registered in someone's name, without a transfer of ownership or written permission under Sec. 21D.

Notice what it does not require: no separate confusion test, and no threshold of commercial scale. The question is whether the registered mark was copied or used without authority.

The other rights follow the same structure. Sec. 12(2) repeats it for registered designs and Sec. 3 does the work for patents.

What is the second offence most people miss?

Sec. 18B is a single line: no trade mark may be used as a registered trade mark without registering it at the Department. It is aimed at the claim, not at the copying.

So a business that writes "registered trade mark" on packaging for a mark it never registered is exposed under a different provision from the counterfeiter. Both can appear on one product.

That also puts the symbols question in its place. The Act never uses the marks people rely on as notices; our piece on what those symbols really mean sets out what they do and do not achieve here.

What actually happens to the goods?

This is the commercially important part. Sec. 19 provides that a person who violates Sec. 16(2), uses a mark cancelled under Sec. 18(3), or violates Sec. 18B may be fined, and the articles and goods connected with the offence are confiscated on the order of the Department, according to the gravity of the offence.

A fine can be budgeted for. A container of finished stock cannot, nor the labels and cartons with it. For a small importer that sentence is usually the whole downside.

The design and patent chapters mirror it. Sec. 15 confiscates the articles and goods connected with a design offence, and Sec. 11 does the same for patents.

Can you recover your losses?

Sec. 25 provides for compensation. Where the holder of a registered patent, design or trade mark suffers loss because someone else breaches the Act, the Department may order that offender to pay the amount actually suffered.

The award tracks actual loss, so records of sales, orders lost and prices undercut matter as much as the evidence about the fake product itself.

Build that file from the first incident, not the day you decide to complain. Several small sellers often trace back to one importer or printer.

Who enforces this in Nepal?

The Department of Industry sits at the centre. It registers marks under Sec. 18, and its legal division acts as a quasi-judicial forum that hears parties, examines evidence and issues the orders that Sec. 19 and Sec. 25 describe.

Beyond the Act, our research note records that the Trademark Directives 2072 also name the District Administration Office, Nepal Police and Customs offices as enforcement bodies. That is a secondary source, so verify it with the Department rather than treating it as settled text.

The Act's own words are narrower. It says nothing about customs, borders, seizure or police: the confiscation in Sec. 19 happens on the Department's order.

What can you appeal, and by when?

Sec. 27 gives a person dissatisfied with a Department order 35 days to appeal. That is a short clock, and it runs whether you are the complainant or the trader whose stock has been confiscated.

Later court-administration legislation changed the forum, so confirm the current appellate court before filing rather than relying on the printed wording.

If an order has gone against you, or a complaint of yours has been dismissed, our opposition and enforcement team can look at the dates first. Missing the window is the one problem that cannot be argued away.

What if the mark is not registered?

Then Sec. 16(2) does not help you, because Sec. 16(1) gives title on registration. What is left is passing off, and it is a harder case: goodwill, a misrepresentation, confusion and damage all have to be proved.

Growing Nepali brands feel this most. Invoices, followers and real recognition are the beginning of a passing-off case, not the end of one.

Nepal is first-to-file, so the delay carries a second risk. Someone else can file the name you have been using, and then you are arguing from behind. Start with a search of the published register.

Does your registration cover the goods being copied?

Check this first. Sec. 18A lets the Government classify goods and services by notification and requires a separate application per category, so protection follows the class you filed in.

Nepal uses the NICE classification in practice: Classes 1 to 34 for goods, 35 to 45 for services. A café registration does not automatically cover packaged food sold under the same name.

Our class finder gives a first answer, and goods against services classification explains where businesses most often pick the wrong side of that line.

What does a usable evidence pack look like?

Specific, dated and physical. "Customers say it is fake" is intelligence; a purchased sample with a receipt and an address is evidence someone can act on.

• Your registration certificate, with the class and the goods it lists.
• A power of attorney if a representative will sign the complaint.
• The physical product, its box, label and seal, kept unaltered.
• A dated purchase receipt or delivery record from a test purchase.
• Photographs of the genuine article beside the suspect one.
• The seller's name, shop or online identity, address and phone number.
• Listings, advertising and distributor material showing the scale of it.

How do you start a complaint?

1. Verify your own position. Confirm the certificate is current, in the right name, and covers these goods.
2. Buy one, properly. A documented test purchase beats a photograph taken across a counter.
3. Compare the marks in writing. Set out what was copied: the word, the device, the colour arrangement, the packaging.
4. Identify the respondent. Seller, importer, manufacturer or printer, with whatever address detail you have.
5. Draft the complaint. Registration details, ownership, the conduct, the goods, and the relief you want.
6. File and attend. Expect inquiries and hearings; a foreign owner acts through a Nepal-based representative.
7. Follow the order through. Confiscation, compensation and any settlement all need execution, not just a decision.

Do not confront a trader or post an accusation before the evidence is safe. A wrong accusation creates its own legal problem, and it warns the supply chain to move.

What are the real risks to a seller?

Confiscated stock, a fine, and a Department record of the order, plus working capital tied up in goods that can no longer be sold.

Two of the three routes into Sec. 19 catch people who never thought of themselves as counterfeiters: the trader using a cancelled mark, and the business that printed a registration claim it did not have.

If you have been accused, start with the facts. Is the registration current, does its class cover these goods, are the goods genuine or copied? Our note on parallel imports and grey-market goods covers the usual mix-up.

What are the risks to an owner who waits?

Three, and they compound. Someone else files the name; the fakes build their own customer base; the evidence disappears with the stock.

There is also a quieter one in the Act. Sec. 18C says that if a registered mark is not brought into use within one year of registration, the Department shall inquire and cancel the registration.

A defensive filing left idle is therefore not a safe parking space. Keep the mark in real use and the renewal term in your calendar, through our renewal service.

Common mistakes

• Treating every cheap rival as a fake. The test is an unauthorised registered mark, not low quality.
• Relying on a company registration. A company name at the registrar is not a trade mark.
• Discarding the packaging. The copied mark is usually printed on the part people throw away.
• Complaining outside your class. Protection follows the goods you actually registered for.
• Settling without terms for the stock. Say what happens to goods, labels, moulds and listings.
• Letting the 35 days run. An appeal under Sec. 27 has a short, hard deadline.

A worked example

This is an illustration, not a real case. A Kathmandu spice business holds a registration in Class 30 and finds pouches with its name and a near-identical mountain device in a bazaar.

It buys two pouches with a receipt, photographs them beside its own, notes the wholesaler named on the carton, and checks the certificate covers packaged spices.

The complaint asks for the trade to stop, the stock and cartons to be dealt with, and compensation for the season's lost orders. The printer matters more than the shop.

Had the same owner registered only a Class 43 restaurant service, the strongest part of that case would not have existed.

Can you stop a copycat before it registers?

Sometimes, and it is cheaper than enforcement. Accepted marks are published in the Industrial Property Bulletin, and an interested person may oppose a published mark.

The opposition period for a published trade mark is 90 days from its publication in the bulletin. Rely on the deadline the Department of Industry states for your issue and act before the last day.

Watching the register is a habit, not a product. Our owner search shows what an applicant has filed, and our opposition team can advise whether objecting is worth it.

Where does this stop and the border begin?

Everything above concerns goods already in the market. Stopping a consignment before it arrives is a different question, with a different authority and far thinner published procedure.

We looked at that separately, including what we could and could not confirm, in our piece on customs seizure of counterfeit goods.

For the wider picture of how brands have fought copying elsewhere, the history of luxury-brand enforcement is a useful contrast with Nepal's much shorter statute.

In short

Nepal's counterfeit law rests on three short prohibitions and one penalty section that takes the goods as well as the money. Registration unlocks it; the class you filed in sets its edges.

Search the register, file properly, keep the mark in use, and build the evidence file from the first incident. The text is on the Nepal Law Commission site, and WIPO holds the treaty background.

If you have not filed yet, that is the step that changes your options, and our registration service is where it starts.

People also search for

• Fighting counterfeit products under Nepal IP law
• Logo or brand: what are you protecting?
• Do you really own your logo?
• Can you trade mark a colour, sound or smell?

Found something on a shelf that should not be there? Send us the photographs and the certificate, and our team will tell you what route is actually open.