Protect intellectual property rights to attract FDI

Published On: June 7, 2023 07:30 AM NPT By: Republica  | @RepublicaNepal

Nepal, a country that boasts of its potential for foreign direct investment (FDI), is failing to address a critical concern raised by potential investors: the violation of intellectual property rights. While the government talks about attracting foreign investment, it has been negligent in protecting the intellectual property rights of foreign brands, hindering the growth and trust of investors in the Nepalese market. The rising number of trademark infringements and copyright violations is alarming and demands immediate attention from the government agencies concerned. The Department of Industry (DoI) has recently revealed that 31 firms in Nepal have been misusing the trademarks of foreign brands to sell their products in the domestic market. This includes businesses involved in food and snacks production, such as Surya Food and Beverages, Fruit Agro Product, Alisha Impex, Nepal Food Processing and Packing Udhyog, Nepal Snack and Food, ANC Event Management, Unilever PLC, Kingswood Colors, Fruit Agro Product, Fashion Sansar.com Pvt Ltd, and Heli Thailand Beverage Cans Holding Company, among others. This is a clear violation of intellectual property rights and needs to be addressed with urgency.

Over the past two years alone, the DoI has recorded approximately 900 offenses related to trademark infringement. Additionally, the government has registered over 2,000 offenses related to copyright issues in the last two decades. These staggering numbers indicate a growing trend of intellectual property rights violations in Nepal. The existing laws and their enforcement mechanisms are clearly inadequate in dealing with this problem. According to the existing Patent, Design, and Trademark Act of 1965, offenders may face fines of up to Rs 100,000, and goods associated with such offenses can be confiscated based on the gravity of the offense. Similarly, the Copyright Act of 2002 prescribes a fine of Rs 10,000 to Rs 100,000, imprisonment of up to six months, or both, depending on the nature of the infringement. Repeated offenses can lead to double the punishment and the seizure of unauthorized materials. However, these penalties alone are not enough to deter violators and protect the rights of intellectual property owners.

The root cause of the problem lies in the weak laws and their ineffective enforcement. Foreign investors prioritize intellectual property rights, and their concerns regarding the weak protection and enforcement in Nepal should not be taken lightly. The government's lack of seriousness regarding this matter is evident. While the government has enacted various acts to attract FDI, including the Investment Board Act, Industrial Enterprise Act, Anti-Dumping Act, Public Private Partnership and Investment Act, and Foreign Investment and Technology Act, the inflow of FDI has been declining. It is high time for the government to address this issue and take necessary actions to control the violation of intellectual property rights. Revising the outdated Intellectual Property Rights Act is a crucial step towards providing comprehensive protection to intellectual property owners. Four years ago, a draft bill was prepared for this purpose, but it failed to receive parliamentary approval due to various reasons. The government must revive this bill and expedite its approval to demonstrate its commitment to protecting intellectual property rights.

In formulating new legislation or amending existing laws, the government should draw inspiration from successful practices around the world. Countries like the United States, Japan, and South Korea have well-established intellectual property protection frameworks that can serve as models. By implementing robust laws, creating specialized intellectual property courts, and strengthening enforcement mechanisms, Nepal can establish itself as a reliable destination for foreign investment. Moreover, awareness campaigns and educational programs should be conducted to educate businesses, entrepreneurs, and the general public about the importance of intellectual property rights and the consequences of their violation. As a member of World Intellectual Property Organization (WIPO) and Paris Convention for Industrial Property, Nepal can collaborate with these organizations to gain valuable expertise and guidance in this regard. The rising violations of intellectual property rights in Nepal pose a significant threat to attracting foreign investment and fostering a favorable business environment. The government must prioritize the protection of intellectual property rights by revising existing legislation and strengthening enforcement mechanisms. By doing so, Nepal can demonstrate its commitment to promoting innovation, creativity, and a secure environment for businesses, both domestic and international.

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