Trademark Cancellation in Nepal: The One-Year Use Rule

Most trademark systems give a proprietor five years before non-use becomes a problem. Nepal gives one, and does not wait for anyone to apply.

Quick reference

The one-year use rule

Section 18C, inserted by the first amendment:

In case a trade-mark registered at the Department is not brought into use within one year from the date of registration thereof, the department shall conduct necessary inquiries and cancel such registration.

Four things follow from that sentence.

The period is one year, from the date of registration — not five years, and not measured from a third party’s application.

It is framed as a duty. The Department “shall” conduct inquiries and cancel. It is not drafted as a power exercisable on the application of a person aggrieved.

It is not conditional on anyone complaining. There is no applicant, no person-aggrieved requirement and no adversarial structure in the section. The inquiry is the Department’s own.

There is no statutory defence. The Act contains no equivalent of the “special circumstances”, “proper reasons for non-use” or “circumstances beyond the proprietor’s control” provisions that soften the non-use rules in Bangladesh, Pakistan and Sri Lanka. Nor does it contain a provision deeming licensed use to be the proprietor’s use.

That last gap matters for a brand working through a local distributor. Elsewhere, the statute says expressly that permitted use counts as the owner’s use. In Nepal the Act is silent, so the arrangement with a local partner — and the evidence it generates — is worth structuring with that silence in mind.

What this means for filing strategy

The practical consequences run backwards into how a Nepali portfolio is built.

File close to launch, not well ahead of it. A registration obtained eighteen months before a market entry has spent its first year unused.

File in the categories you will use within the year. Each class is a separate registration under section 18A and carries the obligation separately, so a four-class filing for a two-class launch exposes two registrations. See trademark classes in Nepal.

Keep use evidence from day one. Invoices, packaging, advertising, import documents, dated photographs of product in market. The inquiry under section 18C is the Department’s, and the answer to it is documentary.

Treat defensive filing with caution. A registration held for a category the business will not enter within a year is, on the face of the statute, a registration the Department is directed to cancel.

Cancellation on the refusal grounds

Section 18(3): the Department may cancel the registration of any trademark if it is satisfied that any of the circumstances prescribed in the proviso to subsection (1) exists.

Those circumstances are the five refusal grounds — harm to the prestige of an individual or institution, adverse effect on public conduct or morality, undermining the national interest, undermining the reputation of another person’s trademark, or the mark already being registered in another’s name.

The proviso to section 18(3) protects the holder: the Department shall, before cancelling, provide a reasonable opportunity to the holder of the trademark to show cause why the registration should not be cancelled.

Two features worth noting.

There is no time limit. The Act contains no conclusiveness provision, so a registration does not become unchallengeable on these grounds with the passage of time — unlike Bangladesh, where section 29 makes registration conclusive as to validity after a period, or Sri Lanka, where nullity on the third-party grounds must be brought within five years of the certificate.

It is the Department’s power. Section 18(3) is not drafted as an application by a third party. A party with evidence that a ground exists is in the position of putting that evidence before the Department rather than commencing a proceeding against the registrant.

See marks that cannot be registered.

Automatic cancellation for non-renewal

Section 23B(2): where a registration is not renewed within 35 days of expiry, and not renewed within six months after that on payment of the fine, registration shall automatically be cancelled.

No discretion, no restoration application, and no reinstatement provision in the Act. See trademark renewal in Nepal.

Cancellations are published

Section 21A requires the Department to publish registered designs and trademarks as well as particulars of their renewal or cancellation, for the information of the public — and allows any person with an objection to the published particulars to file a complaint within 35 days, after which the Department holds inquiries and takes necessary action.

Two uses for that.

If your registration is cancelled, the cancellation is published, and the 35-day complaint route is the statutory mechanism for objecting to the published particulars.

If you are watching a blocking mark, publication of its cancellation is the signal that the category has opened — though a complaint from the former holder may follow.

See trademark opposition in Nepal.

Using a cancelled mark is an offence

Section 19 ties the cancellation provisions back to the penalties. A person who brings into use a trademark which has been cancelled under section 18(3) — alongside a person who violates section 16(2) or section 18B — may be punished with a fine not exceeding one hundred thousand rupees, with the articles and goods connected to the offence liable to confiscation on the orders of the Department, according to the gravity of the offence.

So cancellation is not merely the loss of a right. Continuing to use the mark as a registered mark after cancellation is penalised.

See trademark infringement in Nepal.

What the Act does not provide

Stated plainly, because the absences shape what can be relied on:

• no five-year non-use provision — the period is one year, under section 18C;
• no statutory defence of special circumstances or proper reasons for non-use;
• no provision deeming licensed use to be the proprietor’s use;
• no partial cancellation for some goods only;
• no restoration or reinstatement after automatic cancellation for non-renewal; and
• no conclusiveness provision limiting cancellation on the refusal grounds over time.

Where the Act is silent, Departmental practice governs, and it is worth confirming at the time rather than inferred from a neighbouring jurisdiction.

Frequently asked questions

How quickly must I use my mark in Nepal? Within one year of registration. Section 18C requires the Department to conduct inquiries and cancel the registration where the mark is not brought into use within that year.

Does someone have to apply to cancel for non-use? No. Section 18C is framed as a duty on the Department rather than as an application by a person aggrieved.

Does use by a local distributor count? The Act does not contain a provision deeming licensed use to be the proprietor’s use, so the arrangement and the evidence it produces should be structured with that in mind.

Can a registration be cancelled years after it was granted? On the refusal grounds, yes. Section 18(3) carries no time limit and the Act has no conclusiveness provision, though the holder must be given a reasonable opportunity to show cause.

What happens if I miss the renewal deadlines? The registration is automatically cancelled. There is no restoration route in the Act.

Is it an offence to keep using a cancelled mark? Bringing into use a trademark cancelled under section 18(3) is punishable with a fine of up to one hundred thousand rupees, with connected goods liable to confiscation.

Useful official resources

• Department of Industry, Nepal
• Patent, Design and Trade Mark Act, 2022 (1965) — sections 16, 18, 18B, 18C, 19, 21A, 23B
• Nepal Law Commission

See our related notes on trademark renewal in Nepal, marks that cannot be registered and trademark infringement.

Holding a Nepali registration with the one-year clock running? Talk to us.