The Concept of Well-Known Trademark has been recognized by Supreme Court of Nepal in the case of Kansai Nerolac Paints Limited, Japan Vs. Department of Industries (DOI).

The Supreme Court has ruled in favour of the Japanese multinational company by stating that the ‘Nerolac’ brand belongs to the Japanese firm and has allowed it to produce paint products under the aforementioned brand name.

The issue of who could use the ‘Nerolac’ brand had been in dispute since the last six years between the Japanese company and a Nepali firm, Rukmini Chemical Industries.

A joint bench of Judges Tej Bahadur KC and Bam Bahadur Shrestha on Wednesday overturned the Kathmandu District Court’s decision in favour of the Japanese company Kansai Paint Japan.

Earlier, Rukmini Chemical Industries had registered the Kansai Nerolac Paint Nepal Pvt Ltd at Department of Industry (DoI).

The DoI had barred Kansai Paints Nepal from using the Kansai Nerolac brand in its products citing that the trademark had already been registered under the name of Rukmini Chemical Industries.

Kansai Paints Nepal had moved the apex court in 2014 against the decision of the DoI.

The Japanese multinational company’s production unit was set up in Birgunj with joint investment of investors from Nepal, India and Japan under the brand name of KNP Japan Pvt Ltd.

Meanwhile, the Ministry of Industry, Commerce and Supplies has drafted the Intellectual Property (IP) Rights Bill. The government has drafted the important law at a time when foreign investors have been asking the country to strongly enforce prevalent global IP laws.

The draft bill states domestic and international trademarks that sound or look similar and trademarks that give false impression of association with some individual or company cannot be registered.

The draft bill is compatible with the 1883 Paris Convention for Protection of Industrial Property, and the Agreement on Trade-Related Aspects of Intellectual Property Rights of the World Trade Organisation.

It takes into account new areas, such as geographical indication, utility model, trade secret and integrated circuit layout design.

The bill also paves the way for innovators and creators to register their patent for a period of 20 years, meaning these innovations and creations cannot be made, used or sold without the permission of the owners for two decades.

If anybody infringes upon patent rights of others, the erring party will have to pay compensation equivalent to three times the amount of losses suffered by the affected party, states the bill.

However, the government can use those innovations and creations for the purpose of national, health and food security without seeking the permission of the patent owner, adds the bill.

Tanka Mahat, director at the DoI, said the bill has a provision to strongly punish local industrialists who have been registering brands and names of multinational companies in their names without the prior consent of the foreign companies. “The apex court’s decision is a massive blow to the group or company which has been deliberately involved in registering multinational brands in their names.”

A version of this article appears in print on February 21, 2020 of The Himalayan Times.