Intellectual Property and Patent Law in Nepal

1. Introduction Inventions are the property of their makers. That means if someone expresses his/her idea or initiative, it is his/her property which is known as intellectual property. The word "intellectual property rights," in accordance with the Agreement on Trade-Related Aspects of Intellectual Property, 1994 ( hereinafter TRIPS), refers to the rights related to Copyright and Related Rights, Trademarks, Geographical Indications, Industrial Designs, Patents, Layout-Designs (Topographies) of Integrated Circuits, and Protection of Undisclosed Information. Looking back to history, the importance of protecting intellectual property was first recognized in the Paris Convention for the Protection of Industrial Property (1883) (hereinafter Paris Convention) and The Berne Convention for the Protection of Literary and Artistic Works (1886).Countries have two reasons to protect the intellectual property. One is to give statutory expression to the moral and economic rights of the creator in their creations and the rights of the public in access to those creations The second is to promote, as a deliberate act of Government policy, creativity and the dissemination and the application of its results and to encourage fair trading which would contribute to economic and social development.[1] Nepal has made commitment to amend its Intellectual property related law after being member of WTO. However, we still have the old IP related law. There are many space for amendments and due to lack of knowledge about protection of invention through patent, people are not concerned about registering their patents. The paper attempts to synchronize the situation, legal provision and future need in this regard. 2.1. Conceptual Framework of Patent 2.2 Situation of Patents Registration in Nepal Nepal started registering patents from 1991. Since then only 70 patents are registered in Nepal.[2] Here is a comparative table of patent registered in Nepal since 1991 till 2013.[3]

Fiscal Year	National	Foreign	Total
2048/49 (1991/1992)	14	19	33
2049/50 (1992/1993)	0	4	4
2050/51 (1993/1994)	0	0	0
2051/52 (1994/1995)	1	0	1
2052/53 (1995/1996)	1	1	2
2053/54 (1996/1997)	0	2	2
2054/55 (1997/1998)	0	2	2
2055/56 (1998/1999)	0	0	0
2056/57 (1999/2000)	0	0	0
2057/58 (2000/2001)	0	0	0
2058/59 (2001/2002)	1	2	3
2059/60 (2002/2003)	5	2	7
2060/61 (2003/2004)	2	2	4
2061/62 (2004/2005)	0	0	0
2062/63 (2005/2006)	0	1	1
2063/64 (2006/2007)	3	0	3
2064/65 (2007/2008)	1	0	1
2065/66 (2008/2009)	2	1	3
2066/67 (2009/2010)	1	0	1
2067/68 (2010/2011)	1	0	1
2068/69 (2011/2012)	1	0	1
2069/70 (2012/2013)	1	0	1
Total	34	36	70

Among those registries in Nepal, 35 are of foreign origin and 34 are of domestic origin. Foreign patents rights are granted to Cigarette container, bar for reinforced concrete, Tobacco products, medicines, recombinant DNA molecule and their method of production, lubricating composition for improvement in jute industry, etc. However, major patents to domestic origin are granted for rice mill, script in computer, herbal tea, essential oil and concrete, multipurpose water turbine, music instrument, color replacement techniques, earthquake risk sound indicator machine, high energy biscuits, air supply disc, easy auto watt hour reader, etc. The situation in other country is poles apart compared to that of Nepal. For instance Australia granted 17,724 standard patents in 2012.[4]Whereas in USA 253,155 patents are registered in 2012 only.[5] Neighbour China has granted 217,105 patents in 2012.[6] Foreign companies have registered very few patents due to a small market of foreign companies in Nepal while Nepali entrepreneurs have not been able to develop new techniques, processes and products.[7] Many from students at rural villages to researchers at universities and some independent creative persons have made some useful inventions from time to time, but we have not been able to raise general awareness that patent should be registered for those inventions.[8] Hence, lack of knowledge about the intellectual property is one of the major reason for the least number of patent registration. With regards to judicial interpretation, there has been no case of patent dispute taken to the Courts of Nepal. However there have been many cases on the issue of trademarks and copyright. 2.3. International Commitments of Nepal The principle of pacta sunt servanda, which means that contracts and clauses are laws with binding force between parties, requires that every contracting party must keep its commitments and fulfill obligation. Article 26 of the Vienna Convention on Law of Treaties (herein after VCLT) states about obligatory nature of the treaties upon the parties to it and the necessity of being performed in good faith.[9] Therefore Nepal is obliged to fulfill the obligations coming out with the WTO agreements and other treaties ratified. Affirming the principle of pacta sunt servanda, The Treaty Act of Nepal[10] in Section 9 states that as Nepal ratifies or accede any treaty, in case legal arrangements need to be made for its enforcement, she has to initiate action as soon as possible to enact laws for its enforcement. The WTO Agreement is limited to institutional measures and consists of no substantive rules. The substantive rules are included in the Annexes of the WTO Agreement. TRIPS is a part and parcel of World Trade Organization (WTO) set up as in annexure 1-c to the Marrakesh Agreement by which WTO was established. Objectives of TRIPS are to give effective and adequate protection and enforcement of intellectual property rights to be necessary for the promotion of intellectual novelty. The TRIPS includes the prescription of minimum levels of substantive intellectual property rights protection for all WTO Member countries, a requirement of providing adequate enforcement mechanisms (including judicial processes), and the potential for authorization of trade sanctions against a Member that fails to implement the requirements.[11] The TRIPS Agreement imposes an obligation on its participant states to apply the Paris Convention standards relating patent.[12] Paris Convention for the Protection of Intellectual Property of 1883 includes patents among the forms of industrial property within its scope. Nepal entered in WTO in 23rd April 2004 and ratified Paris Convention on June 22, 2001. Nepal being a member of WTO and a signatory to Paris Convention is responsible to domesticate the principles and provisions of TRIPS and Paris Convention. Nepal entered in WTO in 23rd April 2004.While entering the WTO, the representative of Nepal committed that, as indicated in the action plan on the implementation of the TRIPS Agreement, the Act would be brought into conformity with the provisions of the TRIPS Agreement.[13] But Articles 3, 4 and 5 of the TRIPS Agreement, providing for inter alia national treatment and MFN treatment, should apply from the date of accession.[14] The TRIPS Agreement gives all WTO Member countries transitional periods within which WTO Member countries bring their national legislation and regulations in conformity with the provisions of the Agreement.[15]Moreover for least developed countries like Nepal, considering their economic, financial and administrative constraints, other than for Article 3, 4 and 5, a period of 10 years is given as transitional period and can be given extensions as well if requested. [16] The transition period was extended by the Council for TRIPS of until 1 July 2013[17] but then again recently more extension has been given to the LDCs. The recent decision of extension states:[18] “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 2021, or until such a date on which they cease to be a least developed country Member, whichever date is earlier.” Moreover, being Least-developed country Members Nepal is not obliged, with respect to pharmaceutical products, to implement or apply Sections 5 and 7 of Part II of the TRIPS Agreement or to enforce rights provided for under these Sections until 1 January2016.[19] 2.3 Compliance of Patent Law with International Standards Nepal has made commitment to amend its Intellectual property related law after being member of WTO. The Patent, Design and Trademark Act (PDTA) was enacted with objective of updating the legal arrangement in respect to patent, designs and trademarks for the convenience and economic benefit of general public.[20] The act has protected invention of process, operation and transmission, generation of new formula, design and trademark. Unlike other countries like USA and Australia there is no separate legislation for patents in Nepal. A single legislation regulates patents, trademarks and design in Nepal. Thought Nepal has transitional period till 2021 to amend its laws accordingly with TRIPS, basic principles are incorporated in the patent Act.

1. National Treatment (NT) And The Most Favoured Nation (MFN)

The principle of national treatment (NT) and the most favoured nation (MFN) treatment are foundational principle of international trades of goods and services. These two principles based on the notion of non-discrimination are enshrined in all the conventions, treaties and agreements of trade and commerce including those of intellectual property. Pursuant to these principles, a state can neither treat its own national traders more favorably than foreign traders nor can differentiate between foreign market participants from different origin. In consonance with Article 3 of GAT and Article17of GATS, Article 3.1 of the TRIPS agreement and Article 2 of the Paris Convention requires a member state to accord national treatment to the foreigners. This obligation is subject to some exceptions as well as prescribed in Article 3 of TRIPS. The MFN principle is enshrined in Article 1 of GATT 1994, Article 2 of GATS, Article 4 of TRIPS. and Article 3 of Paris Convention. Article 4 of TRIPS on treatment requires that, any advantage, favour, privilege or immunity granted by a Member to the nationals of any other Member shall be accorded immediately and unconditionally to the nationals of all other Members but it is subject to some exceptions. Though not the explicitly mentioned in the Act, it treats Nepalese and foreign Citizens equally. Neither does it provide differential treatment among foreign nationals. Any person who wants to obtain right over his/her patent should register it[21]. Once registered, the act restrict the copy or use or cause to use in others name without transforming ownership or written permission[22]. Before its registration as patent, the authority conducts all investigation, takes advice of experts to find out whether it is new invention or not, and whether it is useful to the general public or not. Same legal processes are to be followed by both the nationals and foreigners. Egarding the fees, The provisions of registration and protection of patents under the Patent law are not discriminatory between foreigners, nor among nationals and foreigners. Hence, it maintains the national treatment obligation and most favored national treatment obligation requirements. Another important principle of Trips and Paris convention is the Right of priority.

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[1] WIPO Intellectual Property Handbook (WIPO Publication, Switzerland: 2nd ed, 2004) 3. [2] Department of Industry, Industrial Statistics - Fiscal Year 2069/070 (2012/2013), (Department of Industry, Government of Nepal,2013)67, https://www.doind.gov.np/documents/pdf/industrial_statistics_2069_70.pdf. [3] Ibid. [4] AUSTRALIAN INTELLECTUAL PROPERTY REPORT 2013, IP Austrlia, Attorney-General’s Department, 9 <https://www.ipaustralia.gov.au/pdfs/Australian_IP_Report_2013-web_version.pdf>. [5]< https://www.wipo.int/ipstats/en/statistics/country_profile/countries/us.html>. [6] <https://www.wipo.int/ipstats/en/statistics/country_profile/countries/cn.html>. [7] ‘Nepal weak in Intellectual Property Rights’, Karobar National Economic Daily (online), 12 August 2013 <https://www.karobardaily.com/news/2013/08/nepal-weak-in-intellectual-property-rights>. [8] ‘Weak Patent Rights’, Karobar National Economic Daily (online), 13 August 2013 https://www.karobardaily.com/news/2013/08/weak-patent-rights. [9] Vienna Convention on the Law of Treaties, General Assembly resolutions 2166 (XXI) of 5 December 1966 and 2287 (XXII) of 6 December 1967, The Convention was adopted on 22 May 1969 and opened for signature on 23 May 1969, Entry into force on 27 January 1980. [10] Nepal Treaty Act, 2047 (1990), Act No. 16 of the year 2047 (1990) [11] Ramesh Bikram Karki , Trademark Under the Nepalese Legal System: AComparative Study with the TRIPS Agreement, Annual Survey of International & Comparative Law, Vol. 9 [2003], Iss. 1, Art. 6,9,10 <https://digitalcommons.law.ggu.edu/annlsurvey/vol9/iss1/6>. [12] Trips, Article2. [13] WTO, Report of the Working Party on the Accession of Kingdom of Nepal to the World Trade Organisation, WT/ACC/NPL/16 ,28 August 2003 , 45 <https://www.moics.gov.np/wto_&_nepal/wto/protocol_on_the_accession_of_the_kingdom_nepal/1_report_of_the_working_party_on_the_accesSION%20OF%20the%20kin..pdf >. [14] Ibid,44. [15] Trips, Article 65. [16] Trips Article 66. [17] WTO, Extension of the Transition Period under Article66.1 of the TRIPS Agreement for Least-Developed Country Members, Decision Of The Council For Trips Of 30 November 2005, IP/C/40 <https://www.wto.org/english/tratop_e/trips_e/ta_docs_e/7_1_ipc40_e.pdf>. [18] WTO, Extension of the Transition Period under Article66.1 of the TRIPS Agreement for Least-Developed Country Members, Decision Of The Council For Trips Of 11 June 2013, IP/C/64 <https://www.wto.org/english/tratop_e/trips_e/ta_docs_e/7_1_ipc64_e.pdf>. [19] WTO Decision on Extension of the Transition Period under Article66.1 of the TRIPS Agreement for Least-Developed Country Members for Certain Obligations with Respect to Pharmaceutical Products, Decision Of The Council For Trips Of July 1 2002, IP/C/25 <https://www.wto.org/english/tratop_e/trips_e/art66_1_e.htm>. [20] Preamble, The Patent, Design And Trademark Act, 1965. [21] Section 3(1), The Patent, Design And Trademark Act, 1965. [22] Section 3(2), Ibid.

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