Trademark Squatting & Bad-Faith Filings in Nepal (How to Fight Back)

Trademark squatting in Nepal means someone files your brand at the Department of Industry (DoI) before you do, usually to block you, sell the mark back or ride on your name. Because rights come from registration, the cure is early filing. If a squatter files first, your route depends on the stage: unpublished, published for opposition, or registered.

Key takeaways

• Title comes from registration (Sec. 16(1)), so the first-to-file principle generally applies.
• A foreign registration is not valid in Nepal until it is registered here (Sec. 21B).
• The Act never says "bad faith"; Sec. 18(1) instead bars a mark that would undermine another trademark's reputation.
• A published mark can be opposed within the 90-day opposition window from its Bulletin publication.
• After registration, look at cancellation under Sec. 18(3) or non-use under Sec. 18C.
• In IP Sewa's data, famous brand names are nearly always published under the brand's own company.

What is trademark squatting?

Trademark squatting is a business word, not a legal category. It describes filing a sign that belongs to someone else, to block the genuine owner, demand money or borrow its customers. A former distributor, supplier or agent is a common source.

A similar filing is not automatically dishonest. Two businesses can pick the same word independently. Under Sec. 2(c) of the Patent, Design and Trade Mark Act 1965, a trademark is a word, symbol or picture, or a combination, used by a firm, company or individual to mark its goods or services. Squatting can therefore copy a logo or a combined sign, not only a name.

Why does first-to-file invite squatting in Nepal?

Sec. 16(1) gives title to a trademark "upon registration" at the Department. Use alone does not create that title, so whoever files a complete application first generally gets ahead. A company registration, a domain name or years of sales do not reserve the mark.

Section 21B adds that a mark registered abroad "shall not be valid in Nepal" unless the concerned person registers it here. Nepal is not part of the Madrid System either. A foreign brand that sells here through a distributor before filing leaves a gap a squatter can use.

There is also a visibility problem. A new application is not public until the DoI publishes it in the Industrial Property Bulletin. Across the 12 latest issues by publication date, 9,652 marks with a filing date took a median of 3.5 months from filing to publication. About 64% appeared within six months, but 15.6% took over two years.

Does Nepal's law use the words "bad faith"?

No. We counted over the Patent, Design and Trade Mark Act on the Nepal Law Commission text: "bad faith", "well-known" and "goodwill" each appear zero times. "Reputation" appears once, in the proviso to Sec. 18(1). That single clause carries most squatting arguments:

"... or undermine the national interest or the reputation of the trade-mark of any other person, or in case such trade-mark is found to have already been registered in the name of another person, it shall not be registered"

The full proviso also covers harm to a person's or institution's prestige and to public morality. Bad faith is the story behind a filing; the legal hook is one of these statutory grounds, and a lawyer should frame it for the actual file.

What has the Supreme Court said about bad-faith filings?

The clearest guidance comes from the Supreme Court in Kansai Nerolac Paints Ltd., published as NKP 2077, Decision No. 10561 (Vol. 62, Mangsir issue). A Mumbai paint company challenged NEROLAC marks a Nepali company had obtained here. The headnote makes two points.

First, copying letters of a registered mark, or adding a little, so that it sounds alike and looks the same at a glance, is deceptive similarity.

Second, where bad intention appears from the very start of the registration process, no limitation period stands in the way of cancelling that registration. The court ordered the Mumbai company's published NEROLAC marks registered in its name. Ask a lawyer how one decision applies to your facts.

Which remedy fits which stage?

The right response depends on where the suspect mark sits when you find it.

How does opposition stop a squatter?

Opposition acts before the squatter's mark is registered. The DoI's Bulletin of 8 July 2025 (Vol. 19, No. 5) states that its marks are published under Sec. 18(1) so that anyone can object within 90 days of publication, failing which the marks will be registered.

The publication day counts as day 1, and the deadline the Department states prevails, so act before the last day. The latest issue, Vol. 20 No. 8, came out on 16 October 2026 with 306 marks; on that count its window closes on 13 January 2027.

The full procedure, grounds and evidence are in our guide to trademark opposition in Nepal, and the opposition and enforcement service can prepare the objection.

What if the squatter's mark is already registered?

Sec. 18(3) lets the Department cancel a registration if it is satisfied that a Sec. 18(1) circumstance exists, such as harm to another mark's reputation. The holder must first get a reasonable chance to show cause. This is the main route against a squatter who slipped through the opposition window.

Sec. 18C is a separate tool. If a registered mark is not brought into use within one year of registration, the Department makes inquiries and cancels it. Squatters often file to block or sell, not to trade, so non-use can matter, though it proves nothing alone.

Once a mark is cancelled under Sec. 18(3), using it can bring a fine and confiscation of the goods under Sec. 19. Read the squatter's registration certificate for the owner, class and dates. A mark lasts seven years from registration and is renewable, so check renewal records too; a lapsed mark may simply leave the register.

What does the register show about famous brand names?

We checked 67 well-known foreign brand names, from Rolex to Red Bull, against IP Sewa's published-bulletin data, counting exact name matches only. That gave 486 published marks.

Of those, 465 (95.7%) were published under the brand's own company or group. The other 21 (4.3%) sat under a different owner, spread across 13 of the 67 names; 18 of the 21 list a Nepal address. None of the 21 is in a class where the brand's own company has a published mark under that name.

These counts are not findings about anyone. A word such as Tesla can be adopted independently, and a Bulletin entry shows publication, not the outcome; some may never have been registered. It is the situation Sec. 18(1)'s reputation ground is written for, a famous name in classes the brand never covered; whether any filing fits it is for the DoI and the courts.

Can a foreign registration or reputation beat a local filing?

Not alone: under Sec. 21B, a foreign certificate gives no title here. Still, Sec. 21C lets the Department register a mark already registered abroad without conducting enquiries when the foreign certificate is filed, and it provides the Paris Convention facility to the holder. So file in Nepal and enclose the certificate.

Reputation is the other lever. A brand known to Nepali buyers can rely on the reputation limb of Sec. 18(1), backed by dated proof of sales, advertising and media coverage here. What counts as proof is covered in our guide to well-known trademarks in Nepal. A foreign owner usually acts through a local agent appointed by power of attorney, as Sec. 20 allows, for example through our trademark registration service.

How can a business prevent trademark squatting?

File before you launch, appoint a distributor or exhibit in Nepal. Name the long-term owner as applicant, not a local partner. Search first with the trademark conflict checker and the published-mark database, in Roman and Devanagari spellings and sound-alikes.

Sec. 18A(2) needs a separate application for each class, so cover the core class and close neighbours. A software brand may need Class 9 and Class 42; a clothing label, Class 25 and Class 35; packaged coffee, Class 30 and Class 43.

The NICE class finder maps your goods against WIPO's current Nice Classification. For a written opinion, ask for a professional clearance search.

Distributor, design and employment contracts should say who owns the mark and bar the other side from filing it. Any permission to use it should be in writing, as Sec. 21D expects.

What evidence should the genuine owner keep?

Keep dated proof that the brand is yours: design files, invoices, packaging, advertising, website archives and sales records, including when buyers in Nepal first met it.

Keep proof that the filer knew of you too: emails, distributor agreements and messages. An offer to sell the filing back, or a pattern of filings against other brands, may help show intent. Save original files with their dates and sources.

What should you do the day you spot a suspicious filing?

1. Confirm the stage. Check whether the mark is published, still inside its window, or registered.
2. Save the record. Download the whole Bulletin issue and note the publication date and application number.
3. Identify the filer. Use the owner search to see what else the same applicant has published.
4. Compare the classes. Match the listed goods against your business.
5. Build the timeline. Put your use, reputation and contacts with the filer in date order.
6. Choose the route. Decide on opposition, cancellation or negotiation with a lawyer, before the deadline.
7. File your own mark. If you have not applied, apply now.

Should you negotiate or buy the mark back?

Paying a squatter invites the next demand. Preserve your evidence before any contact, and do not let talks run past an opposition deadline.

A settlement should name the exact application or registration. Under Sec. 21D, a transfer needs a joint application by both parties to the Department, which then records it. Have a lawyer review it before money moves.

Can IP Sewa's search or Trademark Watch catch a squatter?

Our trademark search covers 71,500+ marks from more than 120 Bulletins since 2006. The application-number lookup finds a published mark from its number.

Neither sees applications the DoI has not yet published, so a blank result is not a clearance.

Clients can also use Trademark Watch inside the client portal: add a brand term or logo and get an email when a similar mark is published. It too sees only published marks, so it backs up early filing rather than replacing it.

What does a squatting dispute look like?

Imagine a Pokhara juice brand learns that its former bottle supplier has filed the brand name in Class 32. This is an illustration, not a real case. The brand saves the Bulletin entry, its first invoices and the supplier contract, then files its own application.

The supplier's mark was published three weeks earlier, so the brand can still oppose. Had the window closed, its lawyer would look at cancellation under Sec. 18(3), using the contract to show the filer knew the brand.

Common mistakes

• Waiting for a demand letter before filing.
• Assuming a company name or foreign certificate reserves the mark.
• Treating a blank search result as proof that a name is free.
• Watching only your own class and exact spelling.
• Letting the 90-day opposition window close while negotiating.
• Paying for a transfer without checking ownership and status first.

In short

Trademark squatting in Nepal works because title comes from registration and new filings stay hidden for months. File early in every class that matters and put ownership in writing. If a suspect mark appears, oppose it inside the 90 days; if it is registered, consider cancellation.

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Found a filing that looks like yours? Ask our opposition team to check the record and the deadline, or contact IP Sewa today.