Nepal Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in Nepal, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals.
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Protecting Intellectual Property
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Developments During the Last Five Years

Nepal has made strides in recognizing and prioritizing the development of robust IP protection and enforcement systems. Despite some progress, Nepal’s efforts to strengthen intellectual property (IP) protection and enforcement have been slow. While the government introduced a national IP Policy in 2017- making a formal recognition of IP as a development priority – the pace of implementation has lagged. Although the policy signaled an understanding of IP’s importance in global socio-economic growth, tangible changes on the ground have been limited, reflecting a gradual and often delayed approach to reform.

USG Engagement

USPTO and the U.S. Embassy continues to advocate for stronger IPR protection in Nepal through monitoring, collaborating and advocating on all key intellectual Property (IP) issues and through T=the US-Nepal Trade and Investment Framework Agreement (TIFA). Further, in March 2024, the U.S. Patent and Trademark Office (USPTO) along with the Minister for Industry, Commerce and Supplies, Nepal signed a Memorandum of Understanding (MoU) for bilateral cooperation in the promotion of IP in Nepal. The MoU is supposed to be instrumental in the development of Nepal’s Intellectual Property Protection in Nepal

Legislative Climate

In terms of legislative climate, Nepal has established the Ministry of Industry, Commerce, & Supplies’ Department of Industry to oversee patent and trademark issues while the Ministry of Culture, Tourism, and Civil Aviation oversees copyright matters.
Trademark: Nepal is first to file recognition country. Unlike other jurisdictions, trademarks must be registered in Nepal to be protected. Once registered, trademarks are protected for a period of seven years. 

The Copyright Act of 2002 covers a wide range of authorship and ensures adequate periods of protection. 
Nepal does not currently have standalone laws directed to the protection and enforcement of trade secrets. Nepal protects trade secrets primarily through contract law (non-disclosure agreements or NDAs), relying on confidentiality clauses and employee discipline under the Labor Act of 2017.

Nepal is a member of the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), the Berne Convention, the Paris Convention for the Protection of Industrial Property, and the World Intellectual Property Organization (WIPO). Nepal is not a member of the WIPO Internet Treaties (i.e. the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty).

The Department of Industry acts as a semi-judiciary unit, responsible for the protection of industrial property, settlement of disputes, and other administrative procedures.

Pending Legislation/Bill Pending Parliamentary Approval/ Recent Developments 

  •  In 2017, the Government of Nepal (GoN) finalized an Intellectual Property Rights (IPR) Policy to serve as the foundation for new IPR legislation. 
  • In 2018, GoN introduced a comprehensive draft law on IP, which is presently under governmental review. The proposed legislation aims to enhance existing IP laws and regulations and endeavors to codify all industrial property laws in one place. The United States provided extensive comments in August 2019. Once enacted, the law on IPR will aim to bring the Nepalese national law in line with international IP standards. 

The current draft introduces various industrial property concepts and best practices, demonstrating Nepal’s commitment to ensuring effective IP protection such as: The concept of national treatment (foreign IP shall be accorded national treatment equal to a domestic IP);

o    An electronic system for registration and administration of IPR;
o    The concept of well-known trademarks;
o    Provisions that pertain to compulsory licensing;
o    Regulation of anti-competitive practices with regard to licensing;
o    The patent law concepts of patentability, novelty, inventive step and Industrial applicability;
o    Geographical indications and trade secrets as IP rights; and
o    A single government entity to enforce the full range of IPR issues. 

  • GoN has also floated a draft on Data Protection Act which is pending stakeholder discussion
    Enforcement Climate
  • Enforcement of existing IPR violations in Nepal is erratic, with law enforcement officials lacking adequate training on IPR issues. 
  • There is low awareness of IPR issues in the private sector and legal system, leading to challenges in countering the sale of counterfeit goods. 
  • Unauthorized use of trademarks owned by multinational and national companies is increasing, attributing weakness in law enforcement to foreign companies’ market entry challenges. 
  • The primary marketplaces in Nepal are flooded with counterfeit products, including electronic equipment, clothing, digital media, beverages, and pharmaceutical products. 
  • Currently, the Director General of the Department of Industry manages matters related to patents, designs, and trademarks, facing burdensome administrative and judicial responsibilities. 
  • The absence of robust enforcement methods, coupled with the lack of a specialized appeal system, allows infringers to exploit loopholes for personal gain. 
  • Nepal’s limited IP ecosystem faces significant challenges due to a lack of technically qualified examiners and the absence of a dedicated IP office. 
  • Examiners and officials are rotated very frequently, which hinders effective IP application examinations that require specialized expertise. 
  • The Director General, who is supposed to be the head of the IP office, also rotates frequently, sometimes every few months, and often lacks IP expertise. These frequent rotations, combined with a lack of IP expertise, raise concerns about the importance Nepal places on fostering its innovation ecosystem. 
     

To ensure effective protection of intellectual property in any foreign market, companies should consider several general principles. It is advisable to reach out to the USPTO Intellectual Property (IP) Attaché , which can provide updates on existing laws and regulations. They also can help in developing a strategic approach to safeguard IPR. Additionally, the Stopfakes.gov website is a valuable resource for acquiring additional information. For further inquiries, please contact the Office of Intellectual Property Rights Director, Stevan Mitchell at Stevan.Mitchell@trade.gov.

Contact

Shilpi Jha
Senior Commercial Specialist and Intellectual Property Policy Advisor for South Asia
USPTO Intellectual Property (IP) Attaché 
U.S. Embassy New Delhi
24, Kasturba Gandhi Marg 
New Delhi – 110001
Office Phone: +91 11-2347-2000 x 2010
Email: shilpi.jha@trade.gov
https://www.uspto.gov/ip-policy/ip-attache-program/regions/india

To access the Nepal Investment Climate Statement, which includes information on the protection and enforcement of intellectual property rights, visit the U.S. Department of State’s Investment Climate Statement website.

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