Nepal deals with assignment and licensing in a single section of four lines. There is no licensing chapter, no registered user system, no quality control requirement and no recordal machinery beyond the one application.
What that means in practice is that the agreement has to do the work the statute does elsewhere.
Quick reference
| The provision | Section 21D |
| What it permits | Transfer of ownership, or written approval for use |
| How | A joint application by both persons, stating the facts |
| Fee | The prescribed transfer fee |
| The Department | May transfer the ownership or approve the use |
| Using a mark without it | An offence under section 19 |
| Published | Particulars of renewal and cancellation are published under section 21A |
What section 21D says
21D(1): the owner of the patent, design or trademark may transfer the ownership or provide approval in writing for its use.
21D(2): where it is intended to transfer the ownership, or to provide or receive approval for use, both the persons shall file a joint application, stating the facts accordingly, before the Department, accompanied by the prescribed fees.
21D(3): if an application under subsection (2) is received, the Department may transfer the ownership or provide approval of use.
Three things follow.
Both routes run through the Department. A transfer and a permission to use are handled by the same provision and the same joint application.
The application is joint. Not an application by the assignee or the licensee alone, and not a unilateral recordal by the owner. Both parties sign.
The Department’s role is permissive. It “may” transfer or approve. The section does not make registration of a transfer automatic on production of a document.
Why this is not just a recordal
Section 16(2) is what gives section 21D its force:
No one shall copy or use or cause to use in the name of the others without transforming the ownership or written permission pursuant to Section 21d, the trademark registered in the name of any person pursuant to this Act.
And section 19 makes a violation of section 16(2) punishable with a fine of up to one hundred thousand rupees, with the articles and goods connected with the offence liable to confiscation on the Department’s orders.
So the two lawful routes to use someone else’s registered Nepali mark are a transfer of ownership or written permission, both under section 21D. Use outside those routes is not merely unprotected — it is an offence.
For a group licensing a mark to a local operating company or a distributor, that is the central point. The arrangement needs to go through section 21D, not merely exist as a contract between the parties.
See trademark infringement in Nepal.
What the Act leaves to the agreement
This is where a Nepali licence differs from one drafted for the neighbouring jurisdictions, and the differences are all absences.
No quality control requirement. Sri Lanka voids a licence that lacks stipulations ensuring effective control of quality. Bangladesh requires an affidavit showing the degree of control. Nepal’s Act says nothing — so whether, and how, the licensor controls quality is purely a matter for the agreement.
No provision deeming licensed use to be the owner’s use. The neighbouring statutes all say expressly that permitted use counts as use by the proprietor. Nepal’s Act does not.
That gap matters because of section 18C, which requires the Department to cancel a registration where the mark is not brought into use within one year of registration. Where the only use is by a local licensee, the agreement and the evidence it generates should be structured so that the use is clearly attributable to the registered owner, and so that the owner can obtain the records. See trademark cancellation in Nepal.
No default terms. The Act supplies nothing on territory, duration, exclusivity, sub-licensing or what happens on a sale of the mark. Everything is as agreed.
No licensee enforcement right. There is no provision allowing a licensee to call on the owner to act, or to proceed in its own name. Section 19 is an offence provision administered by the Department.
No effect-against-third-parties rule. The neighbouring statutes make an unrecorded transaction ineffective against a third party acquiring in ignorance. Nepal’s Act does not state the consequence of failing to apply under section 21D — but section 16(2) and section 19 supply a sharper one for the user.
No partial assignment provision. The Act does not address assignment for some goods only, or for part of the specification.
Practical drafting points
Because the statute is silent on so much, a Nepali agreement should be explicit about:
- Which registrations it covers, by number and category — each class is a separate registration under section 18A.
- Quality control, including specifications, approval and inspection rights.
- Use records, with an obligation to provide them to the owner and a survival clause, given section 18C.
- Territory, term and exclusivity, since nothing is implied.
- Sub-licensing, expressly permitted or expressly not.
- What happens on termination, including the application to the Department to reflect it.
- Who files the section 21D application, and who bears the fee.
Transfer of ownership
The same joint application route applies, with the prescribed transfer fee.
A short transaction checklist for Nepal:
- List registrations by number and category. One application per category means a brand is several registrations.
- Check the renewal position before completing. Seven-year terms, a 35-day window from expiry and automatic cancellation make a lapse easy to inherit. See trademark renewal in Nepal.
- Check the one-year use position on recently registered marks.
- File the joint application, since the Department acts on a joint application and not on a unilateral request.
Foreign owners
Section 21B is the background rule: title to a trademark registered in a foreign country is not valid in Nepal unless registered in Nepal.
So a global assignment or licence covering a worldwide portfolio does not, by itself, reach Nepal. The Nepali registrations have to move through section 21D, and if there are no Nepali registrations then there is nothing to move. See foreign trademarks in Nepal.
Frequently asked questions
How do I transfer a Nepali trademark? Under section 21D, by a joint application from both parties to the Department stating the facts, with the prescribed fee. The Department may then transfer the ownership.
How do I license a Nepali trademark? Through the same section. The owner may provide approval in writing for use, and both parties file a joint application with the Department.
Can I just sign a licence agreement without involving the Department? Section 16(2) prohibits use of a registered mark in another’s name without a transfer of ownership or written permission under section 21D, and section 19 makes a violation punishable by a fine and confiscation of goods.
Does the Act require quality control in a licence? No. Unlike Sri Lanka and Bangladesh, the Nepali Act contains no quality control requirement, so it is entirely a matter for the agreement.
Does use by my licensee count as my use? The Act contains no provision deeming licensed use to be the owner’s use, which matters because a registration must be brought into use within one year. The agreement and the evidence should be structured with that in mind.
Can a licensee enforce the mark? The Act gives no enforcement right to a licensee. Section 19 is an offence provision administered by the Department.
Useful official resources
- Department of Industry, Nepal
- Patent, Design and Trade Mark Act, 2022 (1965) — sections 16, 18A, 18C, 19, 21B, 21D
- Nepal Law Commission
See our related notes on trademark infringement in Nepal, trademark cancellation and foreign trademarks in Nepal.
Licensing a brand into Nepal, or moving Nepali registrations in a transaction? Talk to us.