Trademark assignment/transfer in Nepal: selling a brand legally

 Selling a brand in Nepal is legally achievable, but it should be done through a properly documented trademark assignment/transfer and recorded at the Department of Industry (DOI) so the buyer becomes the recognized owner for renewal and enforcement. Nepal’s key statutory basis is the Patent, Design and Trade-Mark Act, 1965 (PDTA), which includes a joint-filing mechanism for permission/use and a resulting transfer of title when approved, along with prescribed government fees.

What “selling a brand” means legally

In business conversations, “selling a brand” can mean many things name, logo, reputation, customer list, domain, packaging, social media pages, distribution network but in law, the most valuable and enforceable asset is usually the trademark registration (or pending application).
In Nepal, trademarks are administered through the DOI, and the ownership reflected in DOI records is what typically matters when enforcing rights, renewing registrations, or responding to conflicts.
So, a proper transaction must align commercial reality (who uses the brand) with legal reality (who is recorded as owner), otherwise the buyer may pay for a “brand” but still lack clear legal control.

Trademark assignment vs trademark licensing

A trademark assignment transfers ownership (seller exits; buyer becomes the new owner).
A trademark license grants permission to use the mark while ownership remains with the licensor; licensing can be appropriate for franchises, distributors, or a temporary expansion arrangement.​
Nepal’s PDTA contains a practical route widely relied upon for permission/use arrangements through joint submission to DOI, and it also links that permission approval to a resulting transfer of title to the permitted person.

When to choose which:

• Choose assignment when the buyer is paying to acquire the brand permanently, wants exclusive control, or wants to raise investment using the brand as a core asset.

• Choose licensing when the owner wants royalties, wants to keep ownership, or is testing a partner before a full sale.​

Legal foundation in Nepal (PDTA)

Trademarks in Nepal are governed by the Patent, Design and Trade-Mark Act, 1965.
The PDTA provides that for a registered trademark, when the owner wants another party to use the trademark, both parties must file a joint application with prescribed fees at the DOI; if permission is granted, the title to the trademark is transferred to the permitted person.
The PDTA also provides that a trademark registration is valid for seven years from the registration date and can be renewed, making ownership continuity and clean recordal essential when a brand changes hands.

What can be transferred in a brand sale

A solid brand-sale structure usually covers more than the trademark certificate alone. Depending on the deal, the transfer package may include:

• Trademark registrations and/or pending applications (word mark, logo/device mark, tagline) and all relevant classes.

• “Goodwill” (the commercial reputation tied to the mark), which is often central to the price and should be expressly addressed in the assignment deed.

• Brand identifiers: product labels, trade dress, packaging templates, brand guidelines, marketing creatives, and signboard designs (commercially important, even if not always IP-registered).i

• Digital assets: domains, websites, social media handles, e-commerce storefronts, and marketplace brand pages (often where customer trust actually lives).​

• Contracts linked to the brand: distributor agreements, influencer/endorsement contracts, and manufacturer agreements, especially where the brand name appears in the contract text.​

Step-by-step: trademark assignment/transfer process (practical roadmap)

Below is a practical roadmap used in many Nepal transactions (the exact sequence can vary by case complexity and negotiation leverage).

1) Confirm the trademark status (due diligence)

Before money changes hands, verify:

• Whether the mark is registered or only applied for, and in which class(es).

• The recorded owner name/address matches the seller entity (companies often forget to update details after restructuring).

• Whether renewals are due soon (since registrations run for seven years and renewal continuity matters).

• Any vulnerabilities, including non-use risk PDTA allows cancellation if a registered trademark is not brought into use within one year from registration after DOI inquiry.

2) Decide the transfer structure: asset deal vs business deal

A brand can be sold via:

• Asset sale: only the brand/IP assets are transferred (common when selling just a product line).​

• Share sale: the company owning the mark is sold; technically the trademark owner stays the same entity, but corporate ownership changes (often easier for continuity, but heavier for liabilities).​

3) Draft the Deed of Assignment (the backbone document)

The assignment deed should clearly state:

• Exactly which marks are assigned (registration numbers, classes, representations of the logo).​

• Effective date (signing date vs DOI recordal date), price, payment schedule, and tax responsibilities.​

• Whether goodwill is included, and whether the seller will stop using confusingly similar branding.​

• Warranties: seller owns the mark, has authority to sell, and has not already licensed/assigned it elsewhere.​

• Indemnities: who bears pre-transfer infringement liabilities, product recalls, and ongoing disputes connected with historical use.​

4) File the joint submission to DOI and pay fees

Nepal’s PDTA emphasizes joint submission and prescribed fees for permission/use that results in title transfer when granted.
The PDTA’s government fee schedule lists an assignment fee for trademarks (NPR 2,000), which is a key compliance checkpoint for a lawful recordal.
In practice, recordal is the step that aligns “ownership on paper” with the commercial deal, and it is essential for enforcement and renewals going forward.

5) Post-transfer clean-up (the step people forget)

Once recordal is complete (or as soon as contractually permitted), the buyer should:

• Update packaging/labels, distributor price lists, invoices, and warranty cards to reflect the new owner.​

• Update online properties (domain registrant, social media page admin, e-commerce brand registry where applicable).​

• Put an enforcement plan in place: market monitoring, cease-and-desist templates, and a strategy for counterfeit control.

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Costs, timing, and practical expectations

Government fees are prescribed under the PDTA and include a trademark assignment fee (NPR 2,000), though overall transaction cost also depends on legal drafting, due diligence, and complexity (multiple marks/classes, foreign parties, or disputes).
Timing varies depending on the quality of documents submitted and administrative processing, so transactions often use staged payments (e.g., deposit on signing, balance after DOI recordal).​
For higher-value brands, buyers often insist on a brief transition support period (seller’s cooperation on supplier introductions, handover of creatives, and customer communications).​

Common mistakes that create disputes

• Only selling the domain/social media without assigning the trademark this can leave the buyer unable to stop imitators or renew the mark because DOI records still show the seller as owner.

• Ambiguous scope: transferring a logo but not the word mark (or vice versa), or forgetting key classes, leading to gaps competitors can exploit.​

• Non-use exposure: buying a mark that has weak evidence of genuine market use, where cancellation risk exists under PDTA.

• No covenant on seller’s future branding: seller later launches a confusingly similar brand, triggering costly disputes.​

How Axcel Law can support a clean brand sale

Axcel Law can assist end-to-end brand/IP due diligence, selecting the best structure (assignment vs licensing vs corporate transfer), drafting the assignment deed and transaction documents, preparing filings for DOI recordal, and advising on post-transfer enforcement strategy.
This approach helps ensure the “brand sale” is not just a business handshake but a legally defensible transfer that survives scrutiny from competitors, distributors, and future investors.