The Rise of Brand Squatting in South Asia

Brand squatting across South Asia has turned into a silent epidemic. The practice — registering a well-known brand name you don't own in a country with a first-to-file system — thrives in jurisdictions like Nepal, India, Pakistan, Bangladesh and Sri Lanka because rights go to whoever files first, not whoever used the mark first. Nepal's Patent, Design and Trade Mark Act 1965 (PDTA) makes this painfully clear: the Department of Industry (DoI) grants trademark rights upon registration, and until you file, you have no legal claim.

Key Takeaways

• Brand squatting means someone deliberately registers your brand name before you do in a first-to-file country, then demands money to give it back.
• Nepal is a pure first-to-file jurisdiction — the first valid applicant owns the mark, even if you've been trading under the name for years abroad.
• The Department of Industry does not check whether a foreign mark is "well-known" during examination; it checks only the Nepal register and public morality grounds under Sec. 18 of the PDTA.
• Your main legal defences in Nepal are filing an opposition within the 90-day publication window or proving bad faith in a cancellation action.
• South Asia's fragmented legal landscape — Nepal isn't in the Madrid System — means you must file in each country separately, which squatters exploit ruthlessly.
• Early filing in every market you might enter is the only reliable way to stop a squatter before they strike.

What exactly is brand squatting in South Asia?

Brand squatting — also called trademark squatting or brand hijacking — happens when an individual or company registers a trademark they don't genuinely own, typically a mark that has built reputation elsewhere, before the real brand owner enters the local market. In South Asia, where every major jurisdiction except India has stayed outside the Madrid System, the squatter files directly at the national IP office, secures the registration certificate, and then either uses it to block the genuine brand's entry or demands a buyout. Under Nepal's first-to-file framework, the DoI examines the application against its own register — not against a global database of well-known marks — which is precisely why squatters succeed.

Why is brand squatting surging across the region right now?

Three forces are converging. First, South Asian economies are growing fast and foreign brands are rushing in, creating a gap between commercial intent and actual filing. Second, the region's trademark registers are largely first-to-file — Nepal, Bangladesh, Pakistan and Sri Lanka all grant rights to the first valid applicant, not the first user. Third, the absence of the Madrid System in Nepal means a foreign brand cannot simply extend an international registration; it must file directly through a local agent, which takes time a squatter exploits. Opportunists monitor global brand launches, social-media buzz and trade-mark databases, then pre-emptively register names before the real owner even thinks about a Nepal filing. The WIPO has flagged the trend, and law firms across the region report a sharp uptick in bad-faith filings over the last five years.

How does Nepal's trademark law handle brand squatting?

The PDTA does not use the phrase "brand squatting," but several provisions give the Department of Industry and the courts tools to address it. Sec. 18(1) bars registration of a mark that damages the goodwill of another's trademark, and Sec. 21A(2) allows any interested party to file an opposition within the 90-day window after publication in the Industrial Property Bulletin. If the squatter's mark has already been registered, the genuine brand owner can petition for cancellation on grounds of bad faith or prior goodwill. In practice, however, Nepal's examination focuses on the DoI's own register — a squatter who files a mark not already registered in Nepal often sails through unless someone watches the Bulletin and objects in time.

Which NICE classes do squatters typically target?

Squatters don't file blind — they pick the classes where the genuine brand is most likely to operate. A restaurant brand gets hit in Class 43 (restaurant, café and catering services) and Class 30 (coffee, tea, confectionery). A clothing label gets targeted in Class 25 (clothing, footwear, headgear) and Class 35 (retail store services). A fintech startup faces squatting in Class 36 (financial services) and Class 9 (downloadable apps). The squatter often files across three or four classes simultaneously, because under Nepal's single-class-per-application rule that means three or four separate applications — and three or four times the leverage when demanding a settlement. You can identify the classes your brand needs using our NICE class finder before a squatter does.

What does a real brand-squatting scenario look like in Nepal?

Imagine a popular Indian cloud-kitchen brand — let's call it "Tarka House" — that has built a strong reputation in Delhi and Mumbai over three years, with nationwide delivery, press coverage and a large social-media following. The founders are planning a Kathmandu expansion and have begun scouting locations, but haven't yet filed a trademark application in Nepal. A local entrepreneur notices the brand on Instagram, runs a quick search on the DoI trademark database, finds no prior filing, and submits an application for the wordmark "Tarka House" in Class 43. The DoI examines it, finds no conflicting mark on the Nepal register, publishes it in the Industrial Property Bulletin, and — if nobody opposes within 90 days — issues a registration certificate. When the genuine Tarka House team finally approaches the DoI, they discover their own brand name is legally owned by someone else in Nepal. Their options are now expensive: negotiate a buyout, file an opposition if the window is still open, or launch a cancellation action and prove bad faith. The squatter, holding a valid registration certificate, has the upper hand.

What legal defences does a genuine brand owner have in Nepal?

You have three main paths, and timing decides which one is available. First, if the squatter's application is still pending, you can file an opposition with the DoI's Law Division within 90 days of publication in the Industrial Property Bulletin. You'll need to show that the mark damages your existing goodwill — press clippings, social-media reach, sales data and evidence of the squatter's bad faith all help. Second, if the mark has already been registered, you can petition for cancellation under Sec. 18 of the PDTA, arguing the registration hurts the reputation of your institution or was obtained in bad faith. Third, if the squatter is actively using the mark to confuse consumers, you may have a passing-off claim — Nepal courts recognise the common-law tort of passing off, which protects unregistered goodwill. All three paths are adversarial, time-consuming and require a skilled IP representative. Our team can help you navigate opposition and enforcement — learn about our opposition and enforcement services.

How do you spot a squatter before they lock you out?

Monitor the Industrial Property Bulletin, which the DoI publishes regularly and lists every mark accepted for opposition. In practice, however, most business owners don't have time to scan government gazettes. Run a trademark search in your target classes before you enter Nepal — even if you're six months away from launch. A squatter typically files a wordmark identical to yours, in the most obvious class for your sector, without any real commercial activity behind it. Red flags include an applicant with no online presence, a company formed shortly before the filing date, or a filing that covers exactly the classes you'd pick for yourself. Use our Nepal trademark search tool to check whether your brand name is already on the DoI register. If you spot a conflicting filing within the 90-day window, act immediately — that window is your cheapest and fastest remedy. Reach out to our team if you need help assessing what you find.

How does Nepal compare with its South Asian neighbours on squatting risk?

Every South Asian country is first-to-file, but the practical risk varies. India has a well-known-marks doctrine, a more developed body of case law, and a Madrid System connection that lets foreign brands extend international registrations — squatters still strike, but genuine owners have faster remedies. Pakistan and Bangladesh operate similarly to Nepal, with direct national filings and limited examination of foreign goodwill. Sri Lanka recognises prior use to some degree, softening the first-to-file edge. Nepal sits at the higher-risk end: no Madrid membership, a single-class filing system that raises the cost of defensive multi-class coverage, and an examination that focuses primarily on the DoI's own register. That combination makes pre-emptive filing in Nepal more urgent than in almost any other jurisdiction in the region.

What common mistakes make a brand an easy target for squatters?

A mistake we see repeatedly is treating trademark registration as something you do after launch. In a first-to-file country, that's exactly backwards — by the time you're selling in Kathmandu, a squatter may already own your name. Another mistake is filing in only one class when your brand spans several. A restaurant that files only in Class 43 leaves its packaged sauces (Class 30) and branded merchandise (Class 25) wide open. Foreign applicants also underestimate the lead time: filing through a Nepal-based agent with a notarised Power of Attorney and home-registration certificate takes weeks, and squatters can file in days. Finally, many brands assume that because they've registered in India or the US, their mark is protected everywhere — but the Paris Convention priority right only gives you six months to file abroad, and once that window closes, a squatter can step in.

What should you do right now to protect your brand in Nepal?

Start with a search. Use the DoI trademark database to check whether your mark — and close variations of it — is already on the Nepal register. If it's clear, file a trademark application in the NICE classes that match your business today and those you might expand into in the next three years. If you've already launched abroad and haven't filed in Nepal within six months, you've lost your Paris Convention priority, but you can still file directly — and you should, before a squatter forces your hand. If you discover a conflicting filing, check the publication date and act within the 90-day opposition window. Our team handles the entire registration process, from comprehensive trademark searching through to filing and registration with the DoI, and can advise on opposition strategy if a squatter has beaten you to the punch. For a step-by-step walkthrough of the full process, see our guide on how to register a trademark in Nepal.

In short, brand squatting thrives on delay. In Nepal's first-to-file system, the person who files first owns the mark — and a squatter who understands that can hijack years of your brand-building effort in a matter of weeks. The answer isn't complicated: search early, file early, and don't leave a gap between your commercial ambitions and your legal position.

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Don't wait until someone else claims your name. Search the Nepal trademark register now or get in touch with our team — we'll help you file before the squatters get there first.