December 30: Biratnagar-based Bhawani Spices and Food Industries has been using the famous trademark of India's spice brand 'MDH' without authorisation. It has already registered a trademark in Nepal under the name 'MDH' without the consent of the Indian company.

The Department of Industry has given official recognition to the trademark registered by the Nepali company as the Indian spice company has not registered the trademark in Nepal. If the Indian company wants to protect its trademark, it will now have to approach the Supreme Court. The precedent set by the Supreme Court recently provides an opportunity for the Indian company to get recognition for its trademark.

Kansai Nerolac, a well-known Japanese paints company, had won a lawsuit against the Department of Industry and the High Court in Nepal over a counterfeit trademark in accordance to the Supreme Court verdict.

The trademark of the Japanese company was used without any authorisation by a Nepali company Rukmini Chemicals. However, it was Shravan Kumar Goyal, proprietor of Rukmini Chemicals, who had instead lodged a complaint with the department alleging Kansai of trademark infringement. After the department ruled in Goyal's favor, Kansai filed the case at the Supreme Court.

As the case was prolonged for a long time, Kansai had produced and sold paints under the KNP Japan brand. After nearly three years of legal battle, it finally regained its official trademark after the Supreme Court ruled in its favour in February 2019.

"Although Bhawani Spice Industry has made an exact copy of the Indian company, the law recognizes the first company that is registered in Nepal. Therefore, the department has ruled in favor of Bhawani Spice Industry," said Deepak Ghimire, head of the department's legal unit.

Ghimire said that Bhawani Spice Industry has registered a trademark with the department but the genuine MDH is selling and distributing its priduct in the country without registering the trademark. So, it has decided to prevent the latter from engaging in any kind of sales and distribution.

Meanwhile, the department has ruled in favor of the Indian company in a case against an almond drink sold by the Indian company. Ghimire said that the Indian company registered the trademark with the department before the Nepali industry applied for the trademark.

"No one can distinguish between the Indian and Nepali product at a glance, so the consumers also need to be aware of the fake products,” he said.

Three kinds of 'Royal Stag in the market'

Two different companies are selling an exact copy of  'Royal Stag', originially an Indian brand, in the Nepali market. The counterfeit products look similar to the Indian brand. The Indian company, which had been producing and selling Royal Stag in partnership with Himalayan Distillery for 16 years, stopped production five years ago. At present, Royal Stag is being produced, sold and distributed by Winner Liquor Industry in Jhapa.

High Infringement cases 

According to the department the number of trademark infringements are increasing due to the irrelevance of the law formulated fifty six years ago. 

Ghimire said the provision of low penalties and fines is driving perpetrators to commit trademark theft. He also said it is not possible to differentiate between the fake and the genuine goods available in the Nepali market. By the time the company that produces genuine goods seeks legal actions, the counterfeit company would have already made a profit of ten folds.

Trademark infringement cases still fall under the laws formulated in 1965. The perpetrator has to pay fines of Rs 100,000 if found guilty. Back it 1965, Rs 100,000 was a huge amount which is not the same anymore.  A draft to the amended the act has proposed a fine of up to Rs 1 million for such trademark infringement. Ghimire believes that trademark issues will be reduced soon after the new act is enforced. 

About 1000 trademark related cases have been registered with the department. In the last two years, the number of verdicts issued on such cases has declined due to the COVID-19 pandemic.