Absolute Grounds in Nepal Under Section 18(1): Prohibited Signs and Deceptive Marks

Absolute grounds in Nepal are concentrated in a relatively short statutory clause, but that brevity should not be mistaken for narrow practical effect. Section 18(1) of the Patent, Design and Trade Mark Act, 1965 gives the Department of Industry broad authority to refuse marks that offend morality, public conduct, prestige, national interest, or the reputation of another trademark, and Nepal’s treaty obligations fill gaps for official symbols and emblems. For applicants, these grounds present non-negotiable risk. A mark that falls within them may be refused during examination, attacked in opposition, or cancelled after registration. This article focuses on the categories most likely to trigger absolute refusal in Nepal: prohibited signs, official symbols, public policy and morality concerns, and deceptive or misleading marks.

The Legal Framework: Section 18(1), Section 18(3), and Treaty-Based Protection

• Section 18(1): The Department must refuse registration if the mark may hurt the prestige of any individual or institution, adversely affect public conduct or morality, undermine the national interest, hurt the reputation of another person’s trademark, or is identical to a trademark already registered in another person’s name.
• Section 18(3): Authorizes cancellation of a registration after hearing the registrant if the Section 18 restrictions apply.
• Section 21A: Publication and opposition mechanism through which third parties may raise absolute-ground objections.
• Section 27: Appeal right within 35 days from an adverse Department decision.
• Paris Convention Article 6ter: Relevant because Nepal must protect state emblems, flags, official signs, and protected emblems of intergovernmental organizations even though the domestic statute does not list each category expressly.
• TRIPS framework: Supports refusal of marks contrary to public order or morality and reinforces Nepal’s treaty obligations concerning official symbols and misleading signs.

Public Policy, Morality, Official Symbols, and Deception

The legal test under Section 18(1) is not codified as a multi-factor analytical framework, but the practical inquiry is clear: would registration of the proposed sign offend Nepalese public values, misuse protected official insignia, injure the dignity or prestige of a person or institution, undermine national interest, or mislead the public by copying or imitating another source indicator?

For public policy and morality, the Department of Industry applies a community-standards assessment. Marks containing profanity, obscenity, hate expression, or insulting religious or cultural content are highly exposed. Nepal is culturally and religiously sensitive, so examiners are likely to err on the side of refusal where the sign could be seen as offensive to public conduct or morality.

The prestige limb of Section 18(1) is unusually broad. A mark may be problematic if it disparages or exploits the name, standing, or dignity of an individual or institution. In practice, this could apply to names or symbols associated with public authorities, revered figures, or institutions whose identity should not be appropriated for private brand signaling.

Official symbols are not exhaustively enumerated in the statute, but Nepal’s Paris Convention obligations are decisive. National flags, coats of arms, official seals, state emblems, and protected insignia of intergovernmental organizations cannot be registered without authorization. The same principle extends to deceptive imitations. A stylized or partial reproduction may still be refused if consumers would recognize the protected symbol.

Deception in Nepal overlaps with relative-ground logic but is also treated as an absolute matter under Section 18(1) where the mark hurts the reputation of another trademark or misleads consumers. The practical question is whether consumers are likely to be deceived as to source, sponsorship, connection, quality, or institutional endorsement. A mark that falsely suggests governmental connection, falsely claims origin, or deliberately echoes another well-known mark is at high risk.

What the Department of Industry Considers Prohibited or Deceptive

Official and state-linked symbols

The Department of Industry is expected to refuse use of the Nepal flag, state emblems, official seals, and comparable protected symbols. Similar treatment applies to protected foreign state emblems and intergovernmental organization insignia under Paris Convention Article 6ter. Even indirect imitation may be enough if the symbol remains recognizable.

Marks contrary to morality or public conduct

Words or images that are obscene, vulgar, defamatory, hateful, violent in an inflammatory sense, or religiously offensive are high-risk. Examiners may not issue long theoretical opinions; they often rely on straightforward common-sense assessment.

Prestige of individuals and institutions

Marks that trade on or diminish the dignity of institutions or notable persons may be refused. This concern can arise with names, portraits, references to public office, or symbols tied to institutional authority.

National interest

This is a broad residual ground. While not heavily elaborated in published guidance, it can support refusal of signs that undermine public order, falsely imply official backing, or misuse politically sensitive imagery.

Deceptive marks

The Department treats close imitation seriously. That includes marks that mimic prior registrations, marks that falsely imply affiliation with famous brands, and marks that misstate origin or quality. Language equivalence matters here as well. A translation or transliteration may still deceive if Nepalese consumers would connect it to another source.

Combined marks and dominant elements

In a composite sign, one prohibited element can sink the entire application. A neutral word cannot save an emblematic logo. Likewise, a harmless design cannot neutralize offensive text. If the dominant element is prohibited or deceptive, the whole mark is vulnerable.

Key Case Law

Kansai Nerolac Paints Ltd. v. Rukmini Chemical Industries [NKP 2077] — The Supreme Court took a strict approach to deceptive similarity, indicating that even copying one letter or symbol may support a finding of deception. The case is central to Nepal’s intolerance of close imitation.

Madan Prasad Lamsal v. Repsona Publications [NKP 2068] — Reinforces the significance of registration in determining rights and disputes, indirectly supporting strict protection against deceptive appropriation of registered marks.

No leading Nepal cases have been published specifically addressing official symbols or morality refusals under Section 18(1). In those areas, the statutory language and treaty obligations remain the principal legal authorities.

The Procedure for Responding to an Absolute-Ground Refusal

Absolute-ground refusals are often difficult to overcome, but the response path should still be disciplined.

1. Determine whether the refusal is curable

If the objection concerns an official emblem, obscenity, or a plainly prohibited sign, amendment or refiling is usually more realistic than argument. These are often fatal defects.

2. Clarify the commercial meaning of the sign

If the issue is alleged morality, prestige, or public interest, provide context showing that the sign has a benign commercial meaning and no insulting or institutional reference.

3. Address deception directly

If the concern is deception, explain differences in appearance, pronunciation, meaning, trade context, and commercial presentation. If the sign allegedly suggests false origin or endorsement, provide evidence to negate that impression.

4. Remove or replace problematic elements

For a combined mark, the applicant may choose to abandon the problematic word or design and refile a revised version.

5. Participate fully in any opposition inquiry

Absolute-ground objections may also arise after publication. The applicant should respond with written argument, evidence, and where appropriate, revised branding rationale.

6. Appeal under Section 27

If the Department refuses registration, an appeal may be filed within 35 days. Appeals are most viable where the office has overextended a broad concept such as prestige or morality rather than where the mark contains a clearly prohibited emblem or plainly deceptive imitation.

Strategic Recommendations

• Recommendation: Screen all proposed marks for flags, seals, crests, official insignia, and imagery that could be mistaken for state or intergovernmental symbols.
• Recommendation: Assess the mark for cultural, religious, and linguistic sensitivity in both English and Nepali before filing.
• Recommendation: Avoid names, titles, or visual references that imply official endorsement, institutional approval, or a relationship with public authorities.
• Recommendation: Conduct conflict review not only for identical marks but also for close imitations that could be characterized as deceptive under Section 18(1).
• Recommendation: For combined marks, test whether any single element would independently trigger refusal, because one defective component can doom the entire application.

Common Mistakes

• Mistake: Assuming a stylized or altered flag design is acceptable if it is not an exact copy.
• Mistake: Treating offensive slang in English as harmless because it is not in Nepali; examiners can still refuse on morality grounds.
• Mistake: Using the name or insignia of an institution in a way that suggests endorsement or hurts institutional prestige.
• Mistake: Believing that a small change to a famous or registered mark avoids deception concerns.
• Mistake: Waiting until examination to evaluate public policy concerns instead of screening branding earlier.

Key takeaway: Section 18(1) gives Nepal a powerful refusal tool against offensive, official, prestige-injuring, and deceptive signs. If a mark contains any hint of protected insignia, institutional misuse, or consumer deception, redesign before filing is usually the safer and cheaper course.