By Sirjana Sharma – LL.M.: Dedman School of Law – SMU

Overview

In the modern world we have different kinds of property which we want to protect under the law. Apart from the individual’s property like own cars, computers, house, land or other tangible goods, individuals have ownership right upon their own invention and, creative works and, they want to protect the investment. These all new forms of properties are protected by the intellectual property law in the new arena of legal development.

 

According to the Robert Spinard, Xerox Corp. there are two types of intellectual property which we want to protect. First, the brilliant invention, the idea, the notion that makes a new product and the insight that makes a whole new industry. Next, we want to protect the investment and the hard work. This is the grunt work. This is the pick-and-shovel engineering that turns the idea, the prototype, into a reliable, distributable, maintainable, documented and supportable product.[1]

 

Intellectual Property is generally characterized as non-physical property that is the product of cognitive processes and whose value is based upon some idea or collection of ideas[2].

 

1.        A brief introduction of Intellectual Property Law in Nepal

 

In Nepalese context, intellectual property is also one form of property. Right over the IP is new phenomenon in Nepalese context, though IP is also protected by law. There are four different types of IP rights such as: Patent, design, Trademark & Copyright. Patent, Design & Trade-Mark is protected under the one single legislation “Patent, Design & Trademark Act, 1965” &   Copyright is also protected by the “Copyright Act, 2002”. The legal as well as the technological development is happening but still the Nepalese IP right is protected by the old and outdated “Patent, Design & Trade-Mark Act,1965”. In this paper I’ve analyzed the Nepalese IP law, its realistic compliance & how far it is compatible with the TRIPS provisions, since Nepal is the member of the WTO. For the purpose of this paper, I’ve categories the Nepalese Intellectual Property in three different parts: Patent, Trade-Mark & Copyright.

 

A.       Patent law

 

General and legal definition of Patent

 

Patent law gives an economic right to the inventor to the exploitation of his/her invention. The rationale of such law is that economic benefit provides incentive to people for the invention by providing opportunity to get return on the money, time and effort dedicated for invention. A patent are also a source of pride for nations and provides independency for strong economies. Patent protection is the strongest form of protection, in that a twenty-year exclusive monopoly is granted over any expression or implementation of the protected works. The subject matter of patent law is the invention and discovery of new and useful processes, machines, articles of manufacture or compositions of matter[3].

 

Development of Patent law in Nepal

 

The first legislation in Nepal designed to provide such incentive is the Nepal Patent, Design and Trade Mark Law 1936. This legislation was repealed by the Nepal Patent, Design and Trademark Act 1965(NPA). The Act itself has not substantially changed the provisions provided by its predecessor, though arguably this Act may be well intended for the protection of Patents unlike its predecessor. However, the fact that only around 49 Patents were registered till 2002 has raised many doubts regarding the efficiency of the Act.[4]

 

Constitutional Protection

The Constitution of the Kingdom of Nepal made the provisions to encourage innovations. The Article provides: [5] “That the state shall pursue a policy of giving priority to the development of science and technology and shall also give due consideration to the development of local technology for the prosperity of the country.” Such constitutional provisions definitely impose certain liabilities to the state to make necessary arrangement for the guarantee of the inventions and innovations.

 

But it seems that the real purpose behind this legislation was for the protection of trademark. Protection of trademark was especially important as there was a boom in jute business in Nepal around the time of Second World War. And the first Company legislation of Nepal introduced in the same year is also the result of such boom in the jute business. The fact that the first Patent was only in 1963 by Mr. Jayabir Maharjan may support this argument to a certain extent. 

 

NPA provisions

 

Definition

NPA has defined patent as follows: “Patent includes any useful invention found through any new principle or formula relating to new idea or technique for formulation of any matter, composition of matter or regulation and expansion thereof.”[6]

 

NPA has not defined invention, novelty, product, process, specification, utility model, priority date, industrial property, unfair competition, parallel import, and compulsory licensing, which are the core concept in designing patent law.[7]

 

Duration of Patent

NPA has provided that the duration of the patent shall be seven years initially, which shall be renewed for seven years for another two periods. It means patentee have overall 21 years duration period if he/she renewed after the first initial period two times. They have to renew the patent in every seven year period for two periods after the initial registration.

 

Issues :

Following are the some issues regarding Patent right in Nepal which are unanswered yet,

·          Why Patent registration is negligible?

·          Does invention really happen in Nepal? If so, why is the patent not registered?

·          Are there any shortcomings in the existing law?

 

Lack of the official information regarding the number of invention of people in Nepal it is very difficult to list down what are registered on Patent in particular. But informally people may do many things as an invention which is not registered. In addition, there is  no formal institutions that encourage to people to register their invention in order they might be recognized by the nation. For instance, in 1920s Gehendra Sumser and his team invented the Pistol and Moss Thapa invented Wind Mill which are appeared just as an information in the paper. However, there is lack of formal details about it in the government as well as privately themselves. Thus it can be inferred that either the government as well as private sector has seriousness about the patent registration in Nepal. Although there is invention day by day in any level, but we cannot find out what are the things that people are inventing. Those who are inventing some things are also not motivated to register it due to the lack of understanding about its economical value. On the other hand, government has low concerned about the mechanism of patent right registration. Thus the problem lies in both levels at government as well as educated citizens.  In addition, the existing Act has left some of the important issues unanswered as follows:

 

·          It does not support the provision relating to the preservation of indigenous knowledge.

·          The protection of indigenous process of manufacturing medicine for example extraction of ayurvedic medicine.

·          The Act is silent on the issues touching even national interest for example enormous biodiversity of Nepal.

·           Patent law of the agrarian economy like Nepal has failed to deal with the farmers’ right such as local seed production, a local raddish called Pyuthanni Mula ( Local Raddish of western Nepal ) a special varieties of paddy ( Rato Marshi dhan of Jumla)  

 

Though people are not inventing any new innovation and invention that should be protected as Patent. Nepal does have indigenous knowledge; their own process of manufacturing medicine etc.which really helps for the economic development of the people as well as country. The existing Act is unable to protect these issues and people are not encouraged to the new inventions which are both social and economic importance. On the other hand, government is also not acting actively in this regards. It is because of low incentive for those who are working in this field. It is time consuming and tedious job. Government institutions are not focusing in particular to this job. In addition, lack of coordination within departmental as well divisional level.

 

Some critics say that the existing act is a copy of the foreign law, which did not clearly state about the national interest but superficial compliance on the international scenario. Furthermore the Act is not sufficiently explaining the legal bases specifically about the Patent, Design and Trademark in a single legislation.

 

 Trade- Mark law

 

I. General and legal definition of TM

 

Legally, Trade-Mark means words, symbols, or pictures or a combination thereof to be used by any firm, company or individual in its products or services to distinguish them the produces or services or others.[8]

 

A “trademark” is any word, name, symbol, device or any combination thereof used by a manufacturer or retailer of a product, in connection with that product, to help consumers identify that product and distinguish that product from the products of the competitors. Trademarks indicate to consumers that a particular product comes from a distinct source, even if the name of that source is unknown to the consumer.[9] By this definition the main function of the trademark is to distinguish product from one another. Distinction is the main feature of the trademark. Trademarks also function to indicate quality and reputation, thus creating good will in the proprietor of the trademark.[10] Examples of trademark are “CUTEX”, for a cuticle –removing liquid product;[11] “Kodak” for a brand of photographic equipment and supplies;[12] and “V-8” for vegetable juice.[13]

 

II. Development of TM law in Nepal

As per the development of the Patent law, Trademark law also develops at the same time. The same NPA cover the provision of the Trade Mark also. Both areas protect by the legal mechanism at the same time from the same law but still Trade- Mark protection is little forward and entrepreneurs are more conscious to protect the TM rather than the protection their own invention.

 

III. NPA Provisions

 

Right granted upon the TM

 

In Nepalese context there is no such provision of the TM like in USA. The TM will be granted only by registration, no TM right will be granted in the prior use or use in commerce. The TM should register under the so called act to grant the right upon the TM. Unregistered TM has no any legal remedy.

 

Duration of TM

The duration of TM in existing Nepalese Patent, Design & Trade- mark is very short period for the registered Trade-mark.  The total period of registered TM is seven years from first registration and seven years from first renewed & total 14 years. What will happen after the 14 years is not addressed in the Act. Act is silent in this regard. No any practical solution in my knowledge, too. I’m not sure in the Nepalese context which is better option either after 14 years it should be goes permanently to the industry who is holding the TM from the very beginning or they should be renewal provision for the industry. If the TM will go automatically to the Industry after 14 years, there will be economic loss to the government revenue and on the other hand if there is provision of the renewal again after 14 years, industries might be discouraged with vague registration & renewal process. Nepalese Industries are in the “baby-boomer” stage. Most of the industries are trying to establish. But that takes time to establish. Most of them are not feeling the necessity to protect their TM for a long time. It is very rare that anyone industry will be run long last. Very few industries like “Wai- Wai Chauchau”, “Neema- Soap”, “Yum Yum noodles”, “Nepal Brick Industry”, “Nepali Handicraft Association” “ Nepali Gharelu Industry”  which are holding their TM from last 14 years. Practically, those companies are holding there TM from more than 14 years, only act is silent in this regard.From this point of view, we can assume that if once registered TM and renewed at one time after that it will be the same person TM forever.

 

IV. Issues on the Registration of TM in Nepal

To date, there were some cases of TM infringement of the national and international TM in Nepal. But because of the access I cannot find out now. When I was in Nepal there were few cases resolved by the appellate case and few of them by Supreme Court. But the number of case is very low. The first hearing always done by the Industrial department than unsatisfied party can file appeal.

 

In Nepal, entrepreneurs are not motivated for registering the TM, even they are not aware with their economic right. So, it is necessary to aware them they have the economic right on there TM and that will be huge loss in their product if there is infringement of TM. For the benefit of the Entrepreneurs and the overall economic development of the nation Industrial department with the joint work with Lawyer’s Forum for Intellectual Property law (a group of young lawyers working for the promotion and protection of IP in Nepal).

 

 

B.       Copyright law

 

I.                     General and Legal Definition of Copyright

 

 Copyright is a branch of intellectual property which, grants authors and other creators of works of mind (literature, music, and art) certain exclusive use made of their works. Copyright protects only creative expression of ideas. Although it is not always clear whether something constitutes an idea themselves. Notwithstanding the limitations of copyright as applied to computer software, copyright remains a primary tool for defending the programmer’s rights against unauthorized program copying.

 

II.                    Development of Copyright law in Nepal

 

In Nepal Copyright Act, 2002 has repealed by the Copyright Act, 1965. Though, it’s after a two years of the enactment of the Copyright Act, after the great consultation with the policy makers and the stakeholders’ government enacted the Copyright Regulation in 2004.

III.                  New Copyright Act, 2002

 

 Rights of authors

Chapter 1 and 2 of the new Act are entirely devoted to substantial matters, such as the definition and the rights of the authors. Article 7 lists a number of economic rights granted to the authors.[14]Article 8 of the new Act explicitly recognizes distinct moral rights.[15]However, the core characteristics of moral rights- Perpetuity, inalienability and imprescriptibility are not fully respected and preserved in Nepalese Copyright law.

 

 Protected Works

Any work of original and intellectual creation in a literary, scientific or artistic domain is eligible for protection according to the definition of “work” as provided in Article 2 (1) [16]The list of works[17] illustrates the broad scope of coverage for a wide variety of works. The definition above clearly set forth two basic eligibility requirements for a work to qualify for copyright protection. First, it must be original and second, it must be belong to a literary, artistic or scientific domain. Items[18] like ideas, news, and methods of operation, concepts, principles, court decisions, and decisions of administrative agencies, folk songs, folk stories, proverbs and statistics of general information. Apart from these exceptions, copyright is available for any literary, scientific or artistic works or original and intellectual creation.

But the Act still has some ambiguity defining the “amount of Originality”. This is left to interpretation in case by case basis. In the absence of any case law in Nepal, and the implementation of new law still pending, it is yet to be seen now the courts would interpret the originality requirements in different categories of works.

 

 Duration of Protection

As regard to duration of protection, the Copyright law makes no distinction between moral and economic rights. Protection is generally available for life plus a post mortem period of 50 years. However, this period of protection varies with the nature of the respective works[19] like joint works, works made for hire, works of anonymous, the photographic works and the work published after the death of the authors.

 

Limitations and exceptions

Unlike the Anglo- American system, where statutory limitations and exemptions are further supplemented by the so-called “fair use” or “fair- dealing” doctrine, the Nepalese Copyright law also deals with some of the provisions in this new Act. Chapter 4   extensively deals with limitations and exemptions from Copyright Protection.[20]So the people may not be liable for using the copyrighted materials for the Private use, Teaching and illustration, library and archival use, reproduction for information programs, public exhibition and reproduction of computer programs if there is lack of legal production.

                 

 Infringement / Remedies & Enforcement

The Act strictly prohibited for the reproduction of the copyrighted works that Act has protected. Articles 25 and 26 deals with the infringement of the Copyright. The Act prohibits the commercial use of the copyrighted materials.

 

Articles 27 to 29 of the said Act provide the civil remedies and penal sanctions. Civil Remedies include injunctions[21] and recovery of damages from the defendant[22]. Under the Penal sanctions, the law prescribes a minimum fine of Rs. 10,000 (approximately US$ 130) up to 100,000 (approximately US$ 1300) or 6 months imprisonment or both for a first offence. The punishment is doubled for a second or further infringement, and carries confiscation of all infringing material, and equipment used for its reproduction. In practice, however, copyright infringement cases, though occasionally heard in academic debate, were rarely field   and were likely to be dismissed by the authorities.[23]

 

The law invests police officials with the power to search and seize infringing copies. A right holder may file a complaint before police official for the investigation of the offense. Upon a receipt of the complaint, the police official shall take necessary measures to prevent infringing copies from being sold or distributed and, if necessary, may even search and seize the infringing copies.[24]

 

IV.                  Issues of Copyright Law in Nepal

 

Over the years cassettes recording parlor engaged in selling numerous audiotapes dubbed with songs or other audio materials as per the demand of customers. Authorized licensed companies like Music Nepal resulted in heavy revenues losses to the government. Many issues on violation of books, computer software is now increasing.

 

If u go to any music store and buy a cassette of your favorite singer, chances are that you will end up buying a pirated one. Unless you give a serious look at the label of your cassette, you may never recognize it. The music sector in Nepal is marred by piracy. Music is just one example. Pirates have swarmed into almost all sectors of creativity and entrepreneurship.

 

To control all these pirated work government has enacted the Copyright Act,1965.But this act is now outdated because of the new development in the copyright and different kind of creative works and new development in computer and music industry as well. So, now we have Copyright Act, 2002 with new provisions of the copyright protection.

 

D. Institutional Mechanism for protection of Intellectual Property in Nepal

 

Authorities enforcing intellectual property

·          Industrial Property Tribunal under Industrial Property Office, Department of Industries, Katmandu

·          Copyright Tribunal, under Nepal Copyright Registrar’s Office,( Government organization)  Kathmandu

·           Appellate courts

·          Supreme Courts

·          Police Department – first investment authority for Copyright infringement

·          District Administration offices ( 75 districts in all )

 

 Educational Institutions teaching intellectual property

 

·           Nepal law Campus (Bachelor in Law / Master in Law in general) – Tribhuvan University

·           Kathmandu School of Law (Bachelor in law / Mater in law in general course) – Purvanchal University

 

2.        Status of Developing Countries Under TRIPS

 

With the advent of the WTO TRIPS Agreement, developing country members have been forced to radically reform their intellectual property rights regimes. As a result, problems have arisen in the implementation of the TRIPS Agreement, especially in the areas of protection of plant varieties and pharmaceutical products. Hence, in the event of future revision of the TRIPS Agreement, developing countries are advised to prepare well and fully exercise their bargaining powers to neutralize any attempts to further strengthen the current level of protection under the Agreement. It is extremely generalized difficult the likely implications of the Trade- Related Intellectual Property Rights (TRIPS) Agreement in developing countries. Such implications will substantially vary depending on the divergence existing between the Intellectual Property Rights (IPRS) laws of a particular country and the standards of the Agreement.

 

Developing Countries that are members of the WTO (or which are in the process of accession) are required to introduce massive reforms in their national legal systems[25]. Developing Countries, by accepting to improve the standard of protection of IPRs under the TRIPS Agreement, assumed a wide range of obligations in almost all areas of intellectual property rights: copyright and “related rights”, industrial designs, trademarks, geographical indications, patents, plant varieties protection, integrated circuits and undisclosed information. Developing Countries had no previous legislation in several of the IPRs areas covered by the Agreement. Most developing countries did not provide for specific protection for geographical indications and plant varieties. Moreover, in the case of integrated circuits and undisclosed information, there were no international instruments in force before the TRIPS Agreements.

 

The Countries that have initiated the process of adapting their IPRs legislation to the Agreement’s minimum standard have advanced to a different degree in this task. Some ( for example, Mexico, Trindad and Tobago, South Korea)  have already enacted legislation that covers all or most areas dealt with by the Agreement. Others (for example, Argentina, Brazil, Andean Group members) have modified some of the relevant national laws, but many areas have not yet been adapted to comply with the new standards.

 

Even in countries that have introduced amendments to their substantive laws, there often remain gaps to be filled with regard to the enforcement of rights. Compliance with the Agreement on this matter requires the alignment of national laws with the Agreement in various fields, such as civil and criminal procedures in courts, administrative procedures, and intervention of police and customs authorities. They also require increased budgets to face these new tasks.

 

 

3.        Standing of Nepal’s adoption of international intellectual property treaties

 

 

Nepal has adopted the TRIPS, Berne Convention and the Paris Convention in regard to intellectual property law in Nepal.

 

·          Member, WIPO Convention (Stockholm Convention) since February 4, 1997 [26]

·          Member, Paris Convention (Industrial Property), since June 22, 2001[27]

·          Member, Trade Related Aspects of Intellectual Property Rights & WTO since 2003[28]

·          Berne Convention (Literary and Artistic Works), since January 2006[29] 

 

The new Copyright Act has followed the model of the World Intellectual Property Organization (WIPO) in harmonizing the IP legislation with the international laws and practices. It helps Nepal in keeping itself up with the dynamics of international and regional trade.

 

The latest Copyright Act, 2002 is fairly compatible with the TRIPS provisions and we have also joined the Berne Convention. In the field of industrial property rights too, there are initiatives to draft a new act. Besides, Nepal has also joined the Paris Convention in this regard. Indeed, there are many controversial things that still remain to be clarified like in the case of biodiversity, folklore and so on. We are very backward in this point.[30] Though we are the member of the WTO & now our focus is reform our national law in the compatible to the TRIPS. TRIPS’ is silent in regards to   protecting folkore & biodiversity of the developing countries. These countries including Nepal are rich in biodiversity & Folklore which is the major economic resource for them. Countries can make more money and gain economic benefit as well as the dignity in the society as well as international arena.

 

The provisions of TRIPS are not much than what we have in existing IP laws. It all boils down to protecting the IP rights. The TRIPS embraces IP rights in the case of international trade. It intends to forcefully implement the protection of these rights in the international trade.[31]

 

 

4.        TRIPS and Nepalese Intellectual Property law : Existing differences that need to be corrected to achieve compliance with TRIPS

 

 

Nepal applied for admission to the General Agreement on Tariffs and Trade (GATT) in May 1989.[32]  Five years later after the end of the Uruguay Round, GATT transitioned to what we now know as the World Trade Organization (WTO).[33]  Whereas GATT was mainly a treaty relating to goods, WTO also covers intellectual property via its Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).  TRIPS has five key groups of requirements:  general obligations of IP international law under TRIPS, how to protect each of the five “classes” of IP rights (patents, industrial designs, copyright, trademarks, trade secrets, geographical indications),  enforcement and remedies,  dispute settlement, and special transitional provisions.[34]

In 2000 during its pre-accession procedures, Nepal noticed the WTO that it had the following enhancements to be added to its IP laws to achieve full TRIPS compliance:

A. General Obligations Deficiencies, TRIPS Part I

·         Unfair competition law needs to be created to meet the requirements of Articles 1(2), 10bis

·         Foreigners charged double fees for registration and renewal or trademarks, and is discriminatory under Article 2

·         Right of priority needs to be added in 2022 to meet Article 4

·         Compulsory licensing provisions need to be added per Article 5(A)(2-3)

·         Cause of actions and remedies needs to be added for seizure of trademarked imported products without authorization per Article 9

·          Need to add provisions for the false indications of goods per Article 10

·         Legal remedies for trademark violations per Articles 9, 10, 10bis need to be added to meet requirement of Article 10ter, including temporary protection afforded to goods/designs/trademarks that are exhibited as required by Article 11

 

B. Copyrights and Neighboring Rights, TRIPS Part II, §1

·         Provision must be added to protect compilations of data per Article 10

C. Trademarks, TRIPS Part II, §2

·         Fair use exception needs to be added per Article 17

·         Need to amend period of non-use resulting in abandonment to 3 years to meet Article 19.1

D. Geographical Indications, TRIPS Part II, §3

·         Nepal has no IP law for Geographical Indications. This body of law needs to be created to meet Articles 22-24

E.  Patents, TRIPS Part II, §5

·         Rights of process patent owner against imported products manufactured offshore which infringes the process patent needs to be added per Articles 5quater, 28.1

·         Need to add burden shifting to defendant for substantial likelihood of process patent infringement Article 34

 

F.  Integrated Circuit Layout, TRIPS Part II, §6

·         Nepal has no IP law for Integrated Circuit protection. This body of law needs to be created to meet Articles 35, 36, 38

 

G. Trade Secrets, TRIPS Part II, §7

·         Nepal has no IP law for Trade Secret protection. This body of law needs to be created to meet Article 39, including protecting data submitted for marketing approval of pharmaceuticals

 

H. Enforcement, TRIPS Part III

·         Need to add enforcement protection for Confidential Information per Article 42

·         Allow for recovery of attorney fees due to prosecution abuse by plaintiff and to exempt public officials from prosecution due to good faith error per Article 48

·         Provide for indemnification of defendants by plaintiffs if decision on the merits is unjustified per Article 50

·         Provide for temporary suspension of border customs release by IP owner due to counterfeit trademarks or pirated copyrighted works per Article 51 and to require rights holders to present prima facie evidence when initiating border measures per Article 52

·         Require a bond, notice of detention, and notice of hearing for border measures per Articles 53-55

·         Provide measures for wrongful detention, inspection, ex offcio actions by customs, destruction of detained goods, and small amount exception for travelers entering the country per Articles 56-60

·         Provide for criminal procedures for willful violation of IP laws per Article 61.[35]

 

Those required changes represented the legislative challenge for Nepal at that point in time and reflect the difference between Nepalese and TRIPS IP Laws.

 

 

5.        What industries would benefit or be harmed by the introduction of stronger IP laws modeled on TRIPS?

 

The Agreement on Trade-Related Aspects of Intellectual Property (TRIPS), formed during the Uruguay Round, gives the WTO limited authority to enforce intellectual property rights (IPRs) and obligates member nations to enforce private IPRs. In negotiation to refine the agreement Developing Countries like Nepal committed to improve their own IP laws. But there are pros and cons by introducing strong IP mechanism in the Country like Nepal. Nepal’s economy is based on the agriculture. The development of commercial sector is now in the baby-boomer stage. Those kinds of industry which are just growing, they don’t have the concept to protect their Trade-Mark and aware of patented their invention and register their Copyright against the wrongdoer.

 

In Nepal, first the pharmaceuticals industry will be benefited by the stronger IP mechanism. Public health is a major issue for every nation development. Pharmaceuticals Industry is one of the key factors in the developing countries like Nepal, which would be affected by the strong IP mechanism. That will give nation economic benefit. Different kinds of drug should be patented in the developing countries. In fact, IP rights are strengthened globally; the overall cost of medicines in developing countries is likely to increase unless steps are taken to counteract this trend. Developed and Developing countries adopt a range of policies to improve access medicines. One means of obtaining medicines at lower prices, is for countries to use a mechanism called “Compulsory Licensing”. But the Nepalese IP law is silence in this part. There are no such provisions in the present Act. The law makers, policy holders, industrialist, and inventor are also not aware with the so called “Compulsory Licensing”. They still need more awareness and encouragement in this sector. One of the positive parts of the non-patented Drug in developing countries, more people would be able to afford treatments they need.

 

Second, the Agro – business will be boost up by the strong IP mechanism. Most of he Nepalese development is based on the agriculture. In remote areas people economy is based on their own agriculture as well as in the cities also. Agriculture based industry like : Nepali Coffee, food products, Dairy Products, Pasmina industry, Resham Dhago business will be able to protect their own TM which will help to boost up their economy. And finally they will able to compete in the international market.

 

6.        What is the political and historical background to the development of current Nepali IP law?

 

The development of IP law in Nepal is in the very beginning stage. It took long time to sensitize the government as well as the educated industrialist to protect their own right. The industrial sector is still protecting their economic right from the 1965 old and outdated Act. Though, in this stage government is taking initiative for the amending this Act. Department of Industry, Ministry of Industry, Commerce and Supply has realized the need of developing a new industrial Property Act instead of the Patent, Design and Trademark Act, 1965 of Nepal with a view to make the law compatible with TRIPS and other international conventions relating to industrial property protection under WIPO. The Department has prepared a Draft Bill on Industrial Property Protection, 2002. It is now under study and discussion for fin-tuning. Recently, the MOCIS had commissioned a study that has produced a comprehensive report appreciating the Draft Bill and printing out different areas for improving. On that basis, the concerned agency has focused its emphasis on incorporating concessions and flexibilities in the industrial Property Bill and ensures compatibility TRIPS’ requirements.[36]

 

The political instability of nation also affecting the development of IP law in Nepal. Since last few years our political situation is harsh. People are fighting for the new and stable government. So, there is no parliament in this period. Now, one month ago there is a peace- agreement that was signed with the rebellion party and now its seems there will be election very soon. We hope to have a strong government, now.

 

7.        Will Nepal meet its TRIPS deadline of January 1, 2007?

 

In August of 2003, as a condition of accession, Nepal had agreed to a timetable for complete adherence to TRIPS requirements by January 1, 2007, less than 4 years from its WTO formal accession date in 2004.  In comparison, it took Nepal 14 years to gain admission to the WTO after its application for admission in 1989.  Further, Nepal in-fact had an option for a much longer transition period to achieve compliance.  TRIPS make special allowances to “Least Developed Countries” (LDC).[37]  Because Nepal is an LDC, it has access to those allowances.  Article 66, entitled “Least Developed Country”, states in part:

“In view of the special needs and requirements of least-developed country Members, their economic, financial and administrative constraints, and their need for flexibility to create a viable technological base, such Members shall not be required to apply the provisions of this Agreement, other than Articles 3, 4 and 5, for a period of 10 years from the date of application…”[38]

Thus, Nepal could have motioned to extend transition until 2013 but instead somehow agreed to a much faster, and in the end, a probable unrealistic timetable.  To that end, in 2003 just prior to accession, Nepal issued a required detailed notice to the WTO detailing its TRIPS accession requirement plans to complete all work, as promised by January 1, 2007, based on an earlier preliminary assessment in 2000.  

The good news was that Nepal had already acceeded to WIPO (since 1997).  A good first step was then to agree to the Paris Convention in 2001[39].  Later, in 2003 upon accession, Nepal made further progress when it agreed to “Most Favored Nation” treatment (Article 4) and national treatment (Article 3) in all areas covered by TRIPS, including extension in the Copyright Act of 2002 of protection to foreign works on a full national treatment basis and the elimination of discrimination in fees charged foreign vs. domestic applicants.[40]  At accession, it further agreed to complete training of judges and lawyers as well as establishment/strengthening of its Copyright Office by 1/1/2005. There is some evidence from the WTO that this was at east partially completed because the WTO has stated that all of the acceded LDC’s had been sending representatives to the various training opportunities provided by the WTO.

 

However, from 2003 on, progress has seemingly slowed.  Prior to 7/1/2005, Nepal was to establish four new offices:  Trademark Information Center, Industrial Design Information Center, Industrial Patent Information Center, and a Layout-Designs Information Center.[41]  It appears that only the “Industrial Patent Information Center” has gone on-line via a website, but is a rather scant website without document searching.  Status of the other centers is unknown.

Prior to 1/1/2006, Nepal was to complete:

·         Approval of: the Industrial Property (Protection) Act (status of compliance with required changes unknown)

·         Approval of Plant Variety Protection Act (status unknown)

·         Participation in:

·         Berne Convention (Nepal admitted 11/11/2005)[42]

·         Rome Convention (Nepal not admitted as of 3/22/2006)[43]

·         Treaty on Intellectual Property in Respect of Integrated Circuits (Nepal not admitted as of 3/22/2006)[44]

·         Geneva Phonograms Convention (Nepal admitted 1/12/2006)[45]

·         UPOV 1991 (Nepal not admitted as of 3/22/2006)[46]

·         WIPO Copyright Treaty (Nepal not admitted as of 3/22/2006)[47]

·         WIPO Performances and Phonograms Treaty (Nepal not admitted as of 3/22/2006)[48]

 

On September 24, 2004, only 5 months after formal admission, the Nepali  National daily newspaper  The Rising Nepal  reported that Prachanda Shrestha, Nepal’s Joint Secretary and chief of the WTO Division at the Ministry of Industry Commerce and Supplies, said “remarkable progress has been made in developing technical capacity during this period” and had almost completed the draft of all “37 laws” that must be compatible with the WTO.  He specifically stated that necessary preparations for developing technical capability to oversee the laws were underway, and that the Intellectual Property Rights Acts, Industrial Products Protection Act and Plant Varieties Act were in their final stages.[49]  He also indicated that the EU has been assisting to build up technical capability within Nepal and that Australia was helping with the intellectual property legislation.  However, in the same article, farmer discontent was expressed by failure of the government to keep them advised on the potential agreements.  Obviously, there was some indication of the “rush” nature of Nepal’s legislative activity.

Finally, no later than 1/1/2007, Nepal had agreed to:

·         Computerization and networking of Patent Office and Intellectual Property Office (Website operating as of 3/22/2006)[50]

·         Reorganization and establishment of Intellectual Property Offices, along with developing rules, regulations and work manuals[51]

·         Enhancing public awareness on the protection of intellectual property rights

 

In TRIPS, an LDC is allowed to ask for other members’ help.   Appendix 3 of the Working Committee Report details what help Nepal requested of the WTO at September 2003.[52]  Needless to say, the workload was most likely significant for the Kingdom of Nepal.  What took other countries hundreds of years to develop and gain consensus to be being demanded of Nepal in a few short years.

Previously, the WTO had already given LDC members a break on implementing TRIP provisions. Specifically, in 2002 the WTO ruled that LDC’s were not required to enforce TRIPS Part II, §5, 7 (Patents, Confidential Information) with regards to pharmaceutical.[53]  This was an acknowledgement of the over-riding health needs of LDC’s, and not so much an issue of whether the LDC could complete the required legislation.  But it was a concession. Finally, on November 30, 2005, just one month before Nepal’s bundle of deliverables were due, supra, the WTO,

“Recognizing the continuing needs of least-developed country Members for technical and financial cooperation so as to enable them to realize the cultural, social, technological and other developmental objectives of intellectual property protection… Least-developed country Members shall not be required to apply the provisions of the Agreement, other than Articles 3, 4 and 5, until 1 July 2013…”[54]

 

Thus, Nepal now has another seven years to complete its obligations under TRIPS.

 

 

8.        Does Nepal have any other options?

 

Again, no action is required on the part of Nepal. However it should be noted that the TRIPS Council has very recently deliberated over two issues of significant importance to Nepal: the impact of TRIPS on Biodiversity/Plant Varietals Protection[55] and the protection of indigenous Knowledge and Folk Lore[56].Since country has a real asset in potential new medicinal uses of yet undiscovered plants. Hence, the TRIPS issues surrounding Plant Varietals Protection are key to Nepal. Further, because Nepal has ancient and somewhat undisturbed roots to its past history and folk knowledge, they are potential areas of IP interest to Nepal. Both of these current areas of WTO- TRIPS debate may be of value to Nepal in negotiating further IP concessions leading up to 2013. 

 

 Conclusion

 

Nepal is small, landlocked, non-industrialized country. Country economy is based on the agriculture. Agriculture domination of the economy had not changed by 1991.Small and medium sized industrial activity was largely the processing of agricultural products. Country is one of the poorest countries in the world. Various factors contributed to the economic underdevelopment- including topography,  lack of resource endowment, landlocked position, lack of institutions for modernization, weak infrastructure, and a lack of policies conducive to development. Until 1951 Nepal had very little contact with countries other than India, Tibet and Britain. Movement of goods or people from one part of the country to another usually required passage through India, making Nepal dependent on trade with or via India. The mountains to the north and the lack of economic growth in Tibet meant very little trade was possible with Nepal’s northern neighbor. Prior, to 1951, there were few all-weather roads, and the transportation of goods was difficult. Goods were able to reach Kathmandu by railroad, trucks, and ropeways, but for other parts of the country such facilities remained almost non-existent. This lack of infrastructure made it hard to expand markets and pursue economic growth. Since 1951 Nepal has tried to expand its contacts with other countries and to improve its infrastructure, although the lack of significant progress was still evident in the early 1990.

 

In this scenario, still legislator enacted the “Patent, Design & Trade-Mark Act, 1965” for the development of the industrial sector in Nepal. The Preamble of Act shows “It is necessary to make it timely legal arrangements in respect to patents, design, and Trade-Marks for the convenience and economic benefit of the general public”. The Act has three different parts, which included the provision of the patent, design and trademark registration process, rights, the remedies, & punishment in etc. the Nepalese context. The act is far behind to protect the modern definition of the Trade-Mark, Patent & Design. And in some part act is silent. Now Nepal is the member of the WTO, now government should amend this Act in compatible with the TRIPS’. The political situation was harsh in the country, government process the amending the act. Now the country signed in peace agreement on 21st November, 2006. There will be positive sign for the every development as well as legal development. Industrial sector is also developing around the country. Private sectors are still in the progressive stages which are waiting for strong IP mechanism in Nepal. But the lack of the various factors like : no one window policy, no  government commitment in the international sector, no  co-ordination of the government and private sector, no faith with each other while working together and no strong networking around the world, country is far behind to protect the various IP resources of the nation.

 

Nepal is one of the developing countries which is a member of WTO. Developing Countries participate in global intellectual Property systems as “second comers” in a world that has been shaped by “first comers”. They are now being urged to adopt a complex set of rules more suited to advanced economies. When their economies were at comparable stages of maturity, most developed countries did not follow the stringent intellectual property standards they now advocate for developing countries. In Nepalese context, Intellectual property is the very new area.

 

In Nepal we have different kind of indigenous knowledge in different parts of the Nepal. The Nepalese people have their own knowledge like: how to preserve the foods, how to preserve seeds for next year, how to use the traditional herbs for the medicine purpose. Developing Countries like Nepal will become rich if they will able to patent of their genetic resources and associated traditional knowledge. Nepal also has different kind of plant variety which is unique in the south Asia. Like “Siwadi”, “Medicinal plant”, “Haro & Baro”, “Aamala”. TRIPS still waiting to protect those rights in the agreement. Countries like Nepal are waiting there will be some positive changes in TRIPS regarding those issues. But still situation is remaining same. Developing Countries like Nepal is very far behind to protect and develop the strong IP mechanism in comparison to other developed and industrialized country. Pharmaceuticals Industry is one of the key factors in the developing countries like Nepal, which will be protected by the strong IP mechanism. That will give nation economic benefit.

 

Developing countries apply Intellectual property law in copyright protection to software products. Copyright protection in the audio, video and publishing industries appears to be as much as issue among developing countries as it is in all countries where the interests of consumers and producers so strongly differ. A serious problem is the policing of protection in light of the technical facility of copying. The pirated copyright issues are big problem in Nepal. In the music sector singers, artists and authors are aware to protect their own work. So to protect their rights with collaboration of WIPO government enacted the Copyright Act, 2002 which is in parallel of TRIPS. This act covers the some of basic concept/aspects of the TRIPS. But still it is hard to implement that law in our country. The police department is not so strong in the investigation part & artists are not so aware to protect their own rights against the wrongdoer. Most of the so-called authors are not interested to register their creation, though we have a provision of registration to protect our own creation and government establish the office, also.

 

Nepal needs strong IP mechanism for several reasons. First, Foreign Direct Investment. Many international funding is now returning from Nepal because of lack of strong IP mechanism. They can start their own business in Nepal if they don’t have protection of their TM. If we do have strong IP mechanism in Nepal we will have many foreign industries in Nepal. Foreign Direct Investment is one of the key factors which will help to boost up the Developing Countries economy. It is really hard to attract foreign direct investment without strong IP mechanism. The lack of strong IP mechanism Nepal is loosing lots of opportunities like: investing foreign money to grow the national economy. Second, Increase employment options for unemployed younger that are also one of the positive aspects. Third, to comply with WTO agreements because it is national commitment. Developing Countries are entitled to reform national IP laws in compatible with the TRIPS’. Fourth, to promote the local production in the international market. It is hard to get the access of the international market without strong IP mechanism in the country. We are far behind to develop our industrial sector. Once we have a strong IP mechanism we can boost up our economy. There will be competition in the national and international area.

 

Finally, to accomplish these goals, Developing countries like Nepal need a combination of increased international funding, specific initiatives to support research into areas that lack a lucrative market( for instance, many drug companies hesitate to develop malaria drugs or vaccines because most countries that need them cannot afford them), and support for increased education and training within developing countries. The incentive effects on local R & D, foreign direct investment and technology licensing is focus area for the development. Intellectual property protection cannot be shown to be the influential factor in encouraging R & D it appears to be an important ingredient in any policy package designed to support R & D activity. While studies on industrial countries show high private returns on R & D and even higher social returns, the relevance of these studies for developing countries remain to be demonstrated.

 

…………………………………….The End……………………………………………….




[1] Moore, Adam D, Intellectual Property & Information Control P. 9, Transaction Publishers New Brunswick ( U.S.A.) & London ( U.K.) , 2001 

[2] Ibid P.13

[3] Ibid p.19

[4] Pandey Tilak and Upreti Anup, Patent Law in Nepal, New Business Age, February… 2003, at ….. authors are associated with Lawyer’s forum for Intellectual Property Law ( LIP)

[5] The Constitution of Kingdom of Nepal,1990, Art 26 (11)

[6] Section 2(A) of Nepalese Patent Design and Trade-Mark Act( 1965)

[7] Surendra Bhandari,Uruguay Round-WTO: A study on Impact of TRIPs on Developing countries with special reference to India and Nepal, A dissertation submitted  before faculty of Law, Delhi University, at 123, ( 1996)

[8] Section 2( C ) of Nepalese Patent, Design and Trademark Act, (1965 )

[9] Section 45 of the Lanham Act states, in pertinent part:

The term “Trademark” includes any word, name, symbol, or device or any combination thereof

(1)     used by a person, or

(2)     which a person has a bonafide intention to use in commerce and applies to register on the principal register established by this Chapter, to identify and distinguish his or her goods, including a unique product from those manufactured or sold by others and to indicate the source of the goods. even if that source is unknown.

[10] Michael A. Epstein, Epstein on Intellectual Property 7-5 ( 2006)

[11] Northam Warren Corp.v. Universal Cosmetics Co., 18 F.2d 774 ( 7th Cir. 1927)

[12] Eastman Kodak Co.v. Weil, 137 Misc. 506 243 N.Y.S. 319 (N.Y. Sup. Ct. 1930) 

[13] Levi Straus & Co. v. Blue Bell, Inc., 200 U.S.P.Q. 434 ( C.D. Cal. 1978), aff’d, 632 F. 2d 817 ( 9th Cir. 1980 ) 

[14] These rights include: (a) right to produce a work,(b) right to translate a work,(c) right to amend or modify a work,(c) right to amend or modify a work, (d) right to adapt, including any transformation of a work, (e) right to transfer or let for hire the right in respect of audio visual works, works embodying sound, computer programs, databases or musical works in the form of scores,(g) right to import a reproduction of a work,(h) right to make a public exhibition of the original or a copy thereof,(I) right to perform a work,(j) right to broadcast a work, and (k) right to make a public communication of a work.

[15] These rights include: (a) right to paternity, (b) right to modify works, (c) right to integrity.

[16] Article 2(1) defines works as being “works of original and intellectual creation in literary, scientific, artistic and other domain, including the following works…………”

[17] Article 2(1) cites by way of illustration the following works as being works that fit into the definition:

·         Books, pamphlets, articles, research papers;

·         Dramatic or dramatic-musical works, pantomimes and similar works prepared for performing in the stage;

·         Works of  musical compositions with or without words;

·         Works of audio visual ;

·         Works of architectural design;

·         Works of drawings, paintings, sculptures, engravings, lithography, and other works of art;

·         Photographic works;

·         Works of applied art;

·         Illustrations, maps, plans, three- dimensional works relative to geography, topography and scientific articles; and

·         Computer programme

 

[18] Article 4, Copyright Act, 2002

[19] Article 14 of the Nepal Copyright Act,2002 provides the different following provisions for the different works :

·         In the case of joint work- 50 years from the death of the last surviving author

·         In the case of works prepared under the direction or control of a person or legal entity, 50 years from the date of the first publication or from the date of the first public dissemination, whichever comes first

·         In the case of anonymous or pseudonymous works, 50 years fro the date of the first publication or from the date of the first public dissemination, whichever comes first.

·         In the case of works of applied art and photographic works, 25 years from the date of their creation and

·         In the case of a work published after the death of its author, 50 years from the date of its publication

 

[20] Article 16 through 23, Nepal Copyright Act, 2002 

[21] Article 36, Nepal Copyright Act, 2002 

[22] Article 27.2 Nepal Copyright Act,2002

[23] After the amendments of 1997 had come into force, Music Nepal (P.) Ltd. filed a case for copyright infringement with the Registrar at the Nepal National Library. Notwithstanding the defendant’s is being caught red-handed by the police, the Registrar refused to take action, on the grounds of having no authority to punish the culprits. The plaintiff’s petition for the grant of a writ of mandamus to the Supreme Court was dismissed. Likewise, in Foundation Books, New Delhi v. Registrar, the Supreme Court upheld a decision by the Appellate Court that the Registrar was not entrusted with the power to order sanctions under the relevant Section 17 of the Copyright Act.

[24]  Article 32(1) of Nepalese Copyright Act,2002

[25]  Preamble of Agreement on Trade – Related aspects of Intellectual Property Rights

[30] Santosh Sharma- He is the general secretary of Copyright Protection Society of Nepal (CPSN).He is also the director of the country’s largest Music company-Music Nepal. Sharma has long experience is dealing with the issues of copyrights in the country. He spoke to SANJAYA DHAKAL about various facets of copyright and the status of its protection in the country. Interview published on spotlight vol.22,No.21,Dec 06-Dec 12, 2002

[31] Madhusudan Poydyal- He is the director of Industrial Property Section at the Department of Industry. The Section is the focal body that deals with issues of industrial property protection. He spoke to
SANJAYA DHAKAL on the current situation of industrial property protection in the country. Interview published on Spotlight Vol. 22, No. 21, Dec 06- Dec 12, 2002 

[32] See Nepal Schedule of Accession to the WTO, http://www.wto.org/english/thewto_e/acc_e/a1_nepal_e.htm  visited 3 20 06

[33] See UNDERSTANDING THE WTO: BASICS – What is the World Trade Organization?, at http://www.wto.org/english/thewto_e/whatis_e/tif_e/fact1_e.htm, last visited 7/25/ 2006

[34] TRIPS Parts I. – VI.

[35] World Trade Organization, Working Party on the Accession of Nepal, “Implementation of the WTO Agreement on Trade-Related Aspects of Intellectual Property Right (TRIPS)”,

WT/ACC/NPL/7, 12 April 2000, (00-1470)

[36] Bhandari Surendra: Legal Aspects of the Patent Law of Neppal and the TRIPs Agreement posted on the www.legalassociates.org last visited dated on 21st September,2006

[37] TRIPS Preamble

[38] TRIPS, Article 66, paragraph 1

[39] World Trade Organization, Working Party on the Accession of Nepal DRAFT REPORT OF THE WORKING PARTY ON THE ACCESSION OF the kingdom of Nepal to the world trade organization, WT/ACC/SPEC/NPL/5/Rev.1, page 59, 8 August 2003

[40] Id.

[41] Id.

[42] WIPO, Berne Notification No. 249, Berne Convention for the Protection of Literary and Artistic Works, “Accession by the Kingdom of Nepal” (“accession to the Berne Convention for the Protection of Literary and Artistic Works of September 9, 1886, as revised at Paris on July 24, 1971, and amended on September 28, 1979. The Berne Convention will enter into force, with respect to the Kingdom of Nepal, on January 11, 2006. On that date, the Kingdom of Nepal will also become a member of the International Union for the Protection of Literary and Artistic Works (“Berne Union”), founded by the Berne Convention.”), see http://www.wipo.int/edocs/notdocs/en/berne/treaty_berne_249.html, last visited 7/25/2006.

[43] See WIPO, Treaties Contracting Parties, http://www.wipo.int/treaties/en/ShowResults.jsp?lang=en&treaty_id=17, lasted visited 7/25/2006

[44] See WIPO, Treaties Contracting Parties, http://www.wipo.int/treaties/en/ShowResults.jsp?lang=en&treaty_id=17, lasted visited 7/25/2006

[46] WIPO, Nepal Treaty Membership, http://www.wipo.int/treaties/en/ShowResults.jsp?search_what=C&country_id=132C, last visited 7/25/2006

[47] WIPO, Nepal Treaty Membership, http://www.wipo.int/treaties/en/ShowResults.jsp?search_what=C&country_id=132C, last visited 7/25/2006

[48] See WIPO, Treaties Contracting Parties, http://www.wipo.int/treaties/en/ShowResults.jsp?lang=en&treaty_id=18, last visited 7/25/2006

[50] See http://www.ip.np.wipo.net, last visited on 7/25/2006

[51] Id., see Organization chart

[52] Id. at page 77

[53] World Trade Organization, Council for Trade-Related Aspects of Intellectual Property Rights, IP/C/25, 1 July 2002, Extension of the Transition Period Under Article 66.1 of the TRIPS Agreement for Least-Developed Country Members for Certain Obligations with Respect to Pharmaceutical Products, Decision of the Council for TRIPS of 27 June 2002

[54] World Trade Organization, IP/C/40, 30 November 2005, Council for Trade-Related Aspects

of Intellectual Property Rights, Extension Of The Transfer Period Under Article 66.1 for Least-Developed Country Members, Decision of the Council for TRIPS of 29 November 2005

[55] WTO, IP/C/369Rev.1, 9 March 2006, Council for Trade-Related Aspects of Intellectual Property Rights, Review of the Provisions of Article 27.3(B)  

[56] WTO, IP/C/W370/Rev. 1, 9 March 2006, Council for Trade-Related aspects of Intellectual Property Rights, The Protection of Traditional Knowledge and Folklore, Summary of Issues Raised and Points Made