Global brands in recent years have shown interest in Nepal’s growing market, and now the country is set to become a frontier for the production, promotion, sales and distribution of international goods. This interest has also triggered a troubling practice in a country where local products have begun imitating regional products that in turn mimic renowned international brands.

There are eerily similar products in the markets that are very close to the names of global brands, with near-identical logos and names. Some significant examples include ‘Cold Cola’ instead of ‘Coca Cola’, ‘Fatan’ instead of ‘Fanta’, and ‘Kurmure’ as a copy for ‘Kurkure’. The brands are chosen for their popularity and easily copied to follow the dominant ‘trend’ around the world. Such mimicking not only discloses a malicious intent to mislead the consumers but also provides a ‘free ride’ on the global companies’ brand equity.

This practice is not simply a problem for international businesses that have earned fame for their products but also questions Nepal’s image for being fair and reliable. The rise of imitation demonstrates Nepal’s ineffectiveness in legislation mechanisms and their implementation on trademark issues.

Inadequate legal safeguards

Nepal’s Patent, Design and Trademark Act, 2022, covers trademarks. It defines a trademark as ‘any word, symbol, or combination used by a business to distinguish its goods or services from those of others’. The definition has a critical gap, as another provision in the Act provides that the trademarks that are registered abroad are not automatically protected in Nepal unless they are registered locally. The provision allows a leeway for individuals and companies to produce local products under the names and logos of the well-known international brands without manufacturing the actual product.

There are more than a few such Nepali companies that have copied the names of international brands in recent times. The Indian spice brand ‘Mahashian Di Hatti (MDH)’, registered in 1959, was registered in Nepal under a different name. Similar practice was seen in the detergent company ‘Feena’ and the iconic footwear brand ‘Crocs’. All these companies are undergoing legal battles in Nepal’s Department of Industry (DOI) to reclaim their brands from unauthorised local registrants.

Institutional apathy for trademarks

The DOI, the institution responsible for issuing trademark certificates, appears reluctant to address the legal complaints raised by global brands. While the practice of registering closely resembling global brands is not uncommon, the lack of seriousness from the authorised institutions creates further problems for the multinational brands. For instance, there is a growing trend where Nepali companies register the global brand under their company’s name, and when they secure the official name from the DOI, they start bargaining with the real owners to lease the trademark at inflated prices. Such a practice is increasing nowadays.

Approximately 1,800 cases are pending at the DOI, most of which are trademark disputes between international brands and local registrants. Despite these legal complaints, such registrations are continuing. This suggests the DOI’s indifferent attitude to the ongoing problem, which could potentially discourage foreign companies from entering the Nepali market and deter future investments and even partnerships with international brands. On the other side of the spectrum, consumers are also being misled to buy subpar, locally produced goods that only imitate the name and brand of well-established products, without ensuring the quality.

Nepal has been a signatory to the Paris Convention for the Protection of Industrial Property since 2001, which obliges Nepal to protect the well-known trademarks from misuse. However, like many other international commitments that Nepal disregards, there is no enforcement of the Convention, and it emboldens unscrupulous actors.

Weak judicial decisions

The weak adjudication of the trademark issues makes matters worse. The quasi-judicial bench at the DOI is led by the director general and is responsible for handling trademark infringement cases. Unfortunately, the body lacks the required legal expertise. The director general is not a judicial officer; that often leads to inconsistent decisions and unnecessary delays in resolving the cases. Similarly, the director and other officials are not trained to fill in their non-judicial background. This often sidelines critical cases that require serious attention.

Conclusion

The growing practice of registering trademarks that imitate global brands is a pressing concern that requires immediate attention in the form of legislative changes as well as enforcement procedures. The DOI must adopt a proactive approach to rigorously scrutinise trademark applications and reject those applied with ill intentions. Similarly, the judicial system must also be strengthened with trained officials who can effectively handle cases of intellectual property and trademark matters, ensuring that those who exploit the system are held accountable.

The multi-layered challenges in trademark issues require multi-layered solutions. Hence, it is imperative that comprehensive legal amendments are made and adjudicatory bodies are equipped and made competent. Only through coordinated efforts can Nepal create a fair, credible and internationally trusted system of trademark protection.