Trademark infringement on the rise due to weak law enforcement, officials sayThe Department of Industry says it has received over 50 complaints related to trademark infringement in the first quarter of the current fiscal year.
Unauthorised use of trademarks of multinational and national brands has been increasing by the day due to weak enforcement of laws, raising concerns among foreign companies wishing to enter the Nepali market.
“Trademark infringements are rising by 20 percent annually,” said Dipak Ghimire, under-secretary at the legislation department of the Department of Industry. “This is outrageous.”
For those bearing the brunt of infringement, confusion among their customers eventually caused a loss of revenue and damage to brand reputation. Lookalike products often fly off the shelves because consumers cannot figure out if they are buying the desired items because of the way their logos and packaging are designed. However, a lack of knowledge among consumers about the brands and low prices of such counterfeit products also encourage the manufacturers of such phony items.
“Many companies producing and selling these counterfeit products are not even registered with the Industry Department,” said Ghimire. “This has given rise to market malpractices and cast a doubt on the product's authenticity. Consumption and use of such low quality products can eventually impact human health. The blame is ultimately passed on to the genuine producers.”
The Post obtained several samples of fake products from the department. Some counterfeit producers are even using the original bottles and refilling them with their counterfeit products.
For example, according to Ghimire, there is a product called "Royal Tag" in the market which can easily confuse customers looking for Royal Stag whiskey.
“Even regular customers are likely to get fooled by the bottle as it looks similar,” said Ghimire.
“Royal Tag” is not registered with any government office but has a sticker from the Inland Revenue Department.
“The Inland Revenue Department provides stickers without checking the bottle's label,” said Ghimire, adding that counterfeit products, especially alcoholic drinks, would come under control if the Inland Revenue Department provided its stickers by properly checking the bottle and its label.
Products like Badam Drink, India with the same name, logo and packaging have been found produced in Nepal. Golden Oak as "Perfect" and Royal Stag as "Royal Short" are other bottles available with similar designs.
"The Patent, Design and Trade Mark Act 1965 law gives the right to stop the production, seize the products and impose a fine of Rs100,000 against violators," said Ghimire. “But the law is too old and fining them just Rs100,000 is not a big deal.”
Department of Industry officials say it’s not that the genuine manufacturers have not filed complaints.
In mid-July, Surya Nepal filed a complaint claiming that its trademark had been infringed by Perfect Blends Nepal and requested action. Perfect Blends Nepal has been producing a similar product named Sahasi Premium Filter King.
Dr. Oetkar, India filed a complaint against Asian Thai Foods to cancel its trademark application for "Fun Foods" and its logo in mid-July.
Red Bull, a product of Thailand, filed a complaint claiming trademark violation against two companies, Viet-My Beverage and Food Processing Joint Stock Company, for using the company’s trademark as "Red Blue" in mid-September.
The company also filed a complaint claiming trademark infringement against Pashupati Thai Beverages for using the original name as "Red Buffalo" and logo.
Pidilite, an Indian adhesive brand, has filed a complaint claiming the trademark against Rathi Adhesive for using the company’s trademark as "Karpenter" and "Karpenter Plus" in mid-September.
Asian Biscuit and Confectionery filed a complaint claiming trademark infringement against Cadbury UK for using the company’s trademark with Cadbury Dairy Milk Lickabels. The company also filed a complaint against Shree Pashupati Biscuit Industries for using the company's trademark as "Pashupati Imli Ball" and using the same logo.
The Department of Industry said that many cases filed in court have remained undecided for more than a decade.
In 2001, Nepal became a signatory to the landmark global deal which constitutes definite provisions for protection of trademarks. Even though the international treaty was signed two decades ago, the existing law has not yet been amended or reformulated in line with the changing context.
In February 2009, Chivas Brothers filed a complaint claiming trademark infringement against Chandika Distillery for using the company's trademark as "Passport". It has been more than 11 years, and the case is pending at the department.
In December, Parle Products, India filed a complaint claiming trademark infringement against Kwality Diet and Food Products for its product Kwality.
Red Bull filed a complaint against Kwality Thai Foods for trademark infringement for using the company's trademark as "123 Red Ox" and "Red Ox" in November 2008.
Ghimire said that sometimes the dissolution of a company that has filed a case and cases against companies without a proper address also lead to cases remaining pending.
PepsiCo Inc, US filed a complaint against Singapore Beverage, Jhapa, for trademark infringement for using the company's products as Summer Dew, Green Dew, Him Dew and Swiss Dew in September 2018. The American company filed the complaint against Singapore Beverage for illegally using its trademark with Monsoon Dew in January 2019.
The Coca-Cola Company, US filed complaints against Pathivara Foods and Packaging Udhyog Nepal for trademark infringement for naming its products as Cool Cola and Super Fantastic in May 2019. The multinational beverage company also filed complaints against Singapore Beverage to cancel the trademark of the company and stop the Nepali company from using the company’s name in an unauthorised way with Right Lemon, Club Cola and Fancy Cola in March 2019 and April 2019.
Kentucky Fried Chicken, US filed a complaint against Krispy Krunchy Fried Chicken for using the KFC trademark illegally as KKFC. The company also filed a case against Asian Thai Foods for trademark infringement with the Twister logo.
Johnson and Johnson, US filed a complaint against Jasmine Hygiene Products for trademark infringement with Jasmine Safepree and logo in April 2019.
Reckitt Benckiser, India filed a complaint claiming trademark infringement against Muktinath Chemical Udhyog for using the company’s trademark as MCU Harpic and logo in December 2017.
An official at the department said that of late counterfeit products have flooded the market in such a way that it has become difficult to get original products.
“It is mainly due to inadequate laws,” said Ghimire.
A bill related to trademark, copyright and intellectual property rights has remained stuck at the Ministry of Industry, Commerce and Supply for two years.
Ghimire said that the new law has increased the fines and provisioned a separate police team to raid such companies, among others.
Madhav Timalsina, president of the Consumer Rights Investigation Forum, said the easy availability of counterfeit products violates the Consumer Protection Act and people’s basic right to access quality goods.
Undue influence and pressure from businesspeople, especially those who are involved in wrongdoing, is widespread in the political system of the country, due to which the market for such products is continuously on the rise and no government has intervened, according to Timalsina.
“Such people do not want the law enacted due to which the market is becoming filled with counterfeit products,” said Timalsina.