Counterfeit and pirated goods accounted for up to 2.5 percent of world trade, or as much as $461 billion, according to the Organisation for Economic Co-operation and Development (OECD). The trading of such goods is significantly damaging the treasuries of various companies and countries. The trading of counterfeit products such as Louis Vuitton bags or Nike shoes has steadily increased in the past decade. In 2008, such products accounted for up to 1.9 percent of world trade, amounting to $200 billion. The impact of counterfeiting is greater on rich countries—where most of the companies making the highly desirable branded goods are based. The European Union alone imported as much as $116 billion in fakes in 2013. China appeared as the largest producer of counterfeit products. However, the intellectual property rights of Chinese companies have also been frequently infringed upon. The post-financial crisis revival in trade, the emergence of globalised value chains and booming e-commerce have been cited as reasons for the rise in pirated goods since 2008.

Globally reputed brands have started registering their trademarks in Nepal to protect the brand of their products and services. In 2015 Chelsea Beverage registered its trademark at the Department of Industries, Nepal. Similarly, Suvari—a famous Turkish fashion brand—and Europe-based Head Technology have also applied for trademarks registered here.

Turkey based furniture manufacturer Istikbal has ready registered its trademark in the country. Global brands like Nike and Adidas, among others, have also been renewing their trademark registrations in Nepal. In 2003, Nike registered its trademark in Nepal under various classifications like clothes, sports materials, walking sticks and bags. Adidas too was registered in Nepal under similar classifications in 1995.

The number of trademark registrations of foreign brands in the country is gradually increasing every year. After a trademark is registered, the government is liable to protect the brand within the country. As Nepal has already become a signatory to the Paris Convention for the Protection of Industrial Property, no party other than the license holder can manufacture or sell a particular brand. However, a trademark registered in a foreign country is not valid in Nepal. This means that companies have to get their trademarks registered in Nepal in order to receive protection. Once a trademark is registered, it is supposed to be valid for seven years. The trademark ideally needs to be renewed within a period of 35 days from the date of expiry. If these measures were in place, the intellectual property (IP) sector would have benefitted greatly.

The Foreign Investment and Technology Transfer (FITT) Bill, National Mineral Policy, National Intellectual Property Policy were supposed to be signed into legislation in 2017/18. However, these have yet to be signed. If formulated and implemented, these would aim to address existing barriers in the effective implementation of IP laws as well as protect and promote IP rights of the people. These would envision forming a sole and separate IP office in the country to deal will all issues related to IP, instead of separate institutions. The FITT Bill would also aim to regulate and facilitate foreign investment in Nepal. Different tax waivers and subsidy facilities for foreign investors in Nepal would have been envisioned if FITT and the other policies mentioned above would have been promulgated on time.

The country has numerous intellectual property laws. However, the lack of resources, both human and capital, has hindered their effective implementation. The scattered mechanism to deal with IP has also been identified as one of the major obstacles in effective enforcement of IP laws and regulations. As Nepal has established trade and investment relations with various countries, protection of IP has become essential. Ultimately, the country needs to enact and enforce effective IP laws to attract foreign investors.

Regmi is a former deputy executive director of the Trade and Export Promotion Centre