In Nepal, brand identity is a critical asset for businesses of all sizes. A common question arises among entrepreneurs and startups: Can two businesses use the same brand name? While company registration may prevent duplicate entity names, the reality of trademark law is more nuanced. Understanding confusion, trademark classes, and legal protection is essential for protecting your brand and avoiding disputes.
This article provides a comprehensive overview of whether two businesses can share the same brand name in Nepal, practical implications, legal frameworks, registration tips, and enforcement strategies. It also incorporates insights from Axcel Law Associates, Nepal’s leading IP law firm.
Understanding Brand Name Protection in Nepal
There are two key legal instruments that protect business identity in Nepal:
Company Name Registration – protects the legal entity under the Companies Act, 2006, ensuring no other company can register under the exact same name.
Trademark Registration – protects the brand as used in commerce under the Patent, Design and Trade Mark Act, 2022, administered by the Department of Industry (DOI).
Important Distinction: A company name does not automatically protect your brand in the marketplace. Two different businesses may register similar or identical company names, but a registered trademark prevents others from using confusingly similar marks for the same or related goods/services.
When Can Two Businesses Use the Same Brand Name?
The ability for two businesses to use the same brand name depends primarily on trademark classification and likelihood of consumer confusion.
1. Different Trademark Classes
Nepal follows the Nice Classification system, which divides goods and services into 45 classes. Each trademark registration applies only to the class(es) specified in the application.
Example:
Company A: “Mountain Fresh” registered for Class 29 – Dairy Products
Company B: “Mountain Fresh” registered for Class 3 – Soaps and Cleaning Products
In this case, both businesses may legally use the same brand name because their goods are in different classes, and the likelihood of consumer confusion is low.
2. Same Class or Related Goods
If two businesses attempt to use the same brand name in the same class, the Department of Industry will usually refuse the later application due to the likelihood of confusion.
Key points:
Likelihood of confusion: Consumers might mistakenly believe the products/services come from the same source.
Well-known marks: Even if in a different class, marks considered well-known can prevent use in unrelated goods/services.
Prior rights: First-to-file or first-to-use rules can impact enforcement and registration outcomes.
Example:
Company A: “Everest Coffee” registered in Class 30 – Beverages
Company B: “Everest Coffee” attempts registration in Class 30 – Beverages
DOI will likely reject Company B’s application due to confusion.
How Confusion Is Evaluated
When evaluating whether two businesses can use the same brand name, DOI considers:
Visual similarity – Are logos or wordmarks similar?
Phonetic similarity – Does the name sound alike when spoken?
Goods/services similarity – Are the products or services related or substitutable?
Market channels – Do both companies operate in the same distribution channels?
Consumer perception – Would an average consumer likely be misled?
Professional legal guidance can help assess risk of conflict before filing, saving time and costs.
Practical Steps for Businesses
Conduct a comprehensive trademark search across relevant classes to identify conflicts.
Choose a distinctive name to reduce the chance of confusion.
Register trademarks in all relevant classes if your brand spans multiple product/service categories.
Monitor new trademark filings to prevent others from registering confusingly similar names.
Consider licensing agreements if collaboration or shared naming is necessary.
Axcel Law Associates provides end-to-end support for searches, filings, and enforcement, ensuring businesses avoid potential conflicts in Nepal.
Costs and Timeline
Trademark application fee: Rs 2,000 per class
Registration fee: Rs 5,000 per class
Renewal fee: Rs 500 per 7-year term per class
Professional fees: Rs 10,000–50,000 depending on complexity
Timeline: Typically 6–12 months for registration if no objections arise
Note: Filing in multiple classes increases both government fees and professional costs.
Enforcement Against Conflicting Use
If another business uses a brand name similar to yours:
Send a cease-and-desist notice formally requesting cessation of use.
File an opposition with DOI if the conflicting mark is pending registration.
Initiate legal action in court if infringement persists.
Enforcement becomes easier with registered trademarks; relying solely on company names provides very limited protection.
Practical Examples
Two beverage companies with the same name may coexist if in different classes.
A coffee shop using the same name as a dairy company may be allowed because their goods are unrelated.
A tech startup and another IT service using the same name in the same market would face refusal or legal action.
Tip: Filing for a trademark early in the relevant class ensures priority rights and avoids costly disputes.
Conclusion
In Nepal, two businesses can sometimes use the same brand name, but it depends heavily on:
Trademark classes
Likelihood of consumer confusion
Prior registration and use
For entrepreneurs and businesses, registering a trademark in the appropriate class is the most effective way to protect brand identity. A company name alone is insufficient for market protection.
Professional guidance from firms like Axcel Law Associates ensures businesses navigate trademark classes, evaluate risks, and enforce rights effectively.
Key Takeaway: Always consider distinctive branding, trademark classes, and early registration to secure exclusive rights and avoid confusion in Nepal.
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