Likelihood of Confusion in Nepal Under Section 18(1) and Relative Grounds Practice

Relative grounds are among the most important trademark risks in Nepal, even though the Patent, Design and Trade Mark Act, 1965 does not set out a long dedicated section titled “relative grounds.” In practice, the Department of Industry uses Section 18(1), treaty obligations, and a strict deception standard to prevent registration of marks that conflict with earlier rights. For applicants, this means that the central clearance question is not merely whether a mark is identical to a prior registration, but whether consumers are likely to be confused when the marks are compared visually, phonetically, conceptually, and in relation to the relevant goods or services. The analysis is especially important in Nepal because courts have shown little tolerance for partial copying.

The Legal Framework: Section 18(1), Section 21A, and Section 27

• Section 18(1): Refusal is required where the mark may hurt the reputation of another person’s trademark or is identical to a mark already registered in another’s name. This is the main domestic basis for conflict analysis.
• Section 18(3): Allows cancellation after hearing where the Section 18 restrictions apply.
• Section 21A(1): Requires publication of accepted applications in the Intellectual Property Gazette.
• Section 21A(2): Permits any person to oppose within 35 days, enabling prior rights owners to raise relative-ground objections.
• Section 27: Provides a 35-day appeal period from Department decisions.
• Paris Convention and TRIPS background: Nepal’s treaty obligations support refusal of confusingly similar marks and protection against deceptive appropriation of earlier rights.

Likelihood of Confusion, Dominant Elements, and Similarity of Goods

The operative legal test is likelihood of confusion, often described in Nepalese materials as deception. The question is whether the average relevant consumer in Nepal is likely to believe that the goods or services come from the same undertaking, an economically linked undertaking, or a source endorsed by the owner of the earlier mark.

The Department of Industry and the courts consider the overall impression of the marks, but certain practical principles stand out:

• Identity is highly dangerous: An identical prior registration for the same goods is effectively fatal.
• Minor variations may not help: Small changes in spelling, suffixes, or formatting may still be treated as deceptive.
• Dominant elements matter: If the marks share the element consumers will notice and remember, conflict risk rises sharply.
• Goods similarity amplifies mark similarity: Even moderate mark similarity may be enough where the goods overlap or are commercially related.

Visual similarity asks whether the marks look alike. Relevant points include common letters, sequence, length, arrangement, script, typography, and the overall visual structure of word and design elements.

Phonetic similarity asks whether the marks sound alike when spoken. This is important in Nepal because oral ordering and recommendation remain common in trade. Small spelling differences may not defeat similarity if pronunciation remains close.

Conceptual similarity asks whether the marks convey the same meaning or idea. That includes translations and equivalents across English and Nepali. If one mark is the Nepali equivalent of another English mark, the office may treat them as conceptually similar if consumers would perceive the same commercial idea.

Goods and services similarity is not limited to formal class labels, although classes are important. If goods are identical or closely related in trade channels, function, or consumer expectation, even modest mark similarity can become actionable. If goods are distant and unrelated, confusion risk falls, though famous or particularly distinctive earlier marks may still carry broader practical concern.

For combined marks, the dominant element doctrine is central. If the word component dominates and matches or closely resembles an earlier word mark, the design may not save the application. If the design dominates and the wording is minor or weak, visual comparison may focus more on the graphic element. But the overall impression remains the final reference point.

What the Department of Industry Considers in Confusion Analysis

Word versus word

The office compares spelling, pronunciation, and meaning. Shared openings, identical roots, or close pronunciation can be enough for refusal, particularly for the same goods.

Word versus logo or combined mark

If a logo contains a textual component matching the applied-for word, the text usually carries significant weight. A stylized rendering does not erase the wording for confusion purposes.

Combined versus combined

The office identifies the dominant features of each mark. Shared dominant wording is especially dangerous. Shared device features can also matter where they create the same overall trade impression.

Translation and script equivalents

Because Nepalese consumers encounter both English and Nepali, translation and transliteration can be relevant. Equivalent words in different scripts may still conflict if they create the same commercial impression.

Class and trade relationship

Same-class goods are presumptively more problematic. Different-class goods may still conflict where they move through the same channels or are naturally associated by consumers.

Key Case Law

Kansai Nerolac Paints Ltd. v. Rukmini Chemical Industries [NKP 2077] — The Supreme Court held in substance that copying even a letter or symbol can indicate deception. The case reflects a strict similarity standard and is the leading Nepal authority on confusion analysis.

Madan Prasad Lamsal v. Repsona Publications [NKP 2068] — Reinforces the primacy of registration and supports strong protection against later conflicting users or filers.

Pashupati Biscuit v. Nebiko [NKP 2076] — Referenced in Nepal commentary on trademark disputes involving copying and ownership. The decision underscores the practical importance of distinctiveness and source identification in conflict settings.

No leading cases have been published establishing a detailed multi-factor judicial test equivalent to some foreign jurisdictions, but Nepal’s existing case law clearly favors a strict anti-confusion approach.

The Procedure for Responding to a Relative-Ground Refusal

1. Obtain the cited earlier mark details

Review the prior mark’s wording, design, goods, filing status, and registration scope. Nepal objections may be concise, so applicants should request or compile the comparison record carefully.

2. Compare the marks holistically

Prepare a side-by-side analysis addressing visual, phonetic, and conceptual differences. The argument should focus on consumer perception rather than minute technical distinctions.

3. Address dominant elements directly

If the shared feature is weak or non-dominant, explain why consumers would rely instead on a different, distinctive element.

4. Differentiate the goods or trade channels

Show why the relevant consumers, uses, distribution routes, or market sectors reduce the likelihood of confusion.

5. Use evidence where appropriate

Evidence may include packaging, actual branding context, trade declarations, market segmentation, and any materials showing a different commercial impression. Actual confusion is not required, but contextual evidence can still help.

6. Defend in opposition if publication has occurred

A third party may oppose within 35 days under Section 21A(2). The applicant should answer with structured legal and factual submissions.

7. Appeal under Section 27

If the Department refuses, appeal within 35 days. Appeals are strongest where differences in dominant elements or goods relationship were insufficiently considered below.

Strategic Recommendations

• Recommendation: Run a clearance search that looks for similar marks, not only identical ones, because Nepal’s strict deception standard captures close imitations.
• Recommendation: Review the mark in English, Nepali, and script variants to identify phonetic or conceptual overlap that may not be obvious from spelling alone.
• Recommendation: For combined marks, test whether the dominant element survives on its own. If not, the mark may be structurally weak in conflict analysis.
• Recommendation: Consider narrowing goods or filing for a more distinctive variant if the mark sits close to an earlier registration.
• Recommendation: Monitor the Gazette and oppose third-party filings promptly within the 35-day period to preserve market space.

Common Mistakes

• Mistake: Assuming that a one-letter change avoids refusal in Nepal.
• Mistake: Focusing only on visual differences and ignoring phonetic or conceptual similarity.
• Mistake: Believing a logo automatically distinguishes a combined mark where the wording remains identical or dominant.
• Mistake: Ignoring related goods outside the exact same product description.
• Mistake: Failing to assess translation or transliteration equivalents across English and Nepali.

Key takeaway: Relative-ground analysis in Nepal is strict and practical: if consumers are likely to see, hear, or understand the marks as coming from the same source, refusal risk is high. Strong clearance work and attention to dominant elements are essential before filing.