Prosecution Of Counterfeit Goods And Intellectual Property Crimes
Prosecution of Counterfeit Goods and Intellectual Property Crimes in Nepal
Legal Framework in Nepal:
Industrial Property Protection Act, 2059 (IPPA)
Protects patents, trademarks, industrial designs, and related rights.
Sections 33–45 criminalize unauthorized use of trademarks, false marking, and counterfeit goods.
Copyright Act, 2059 (as amended)
Protects literary, artistic, musical, and software works.
Sections 58–63 criminalize unauthorized reproduction, distribution, and piracy.
Muluki Criminal Code (2074)
Section 262: Fraud and misrepresentation related to goods.
Section 282–285: Offences relating to trademarks and commercial fraud.
Consumer Protection Act, 1998
Provides for action against sale of substandard and counterfeit goods.
Prosecution of IP crimes in Nepal has been gradually evolving, with courts increasingly recognizing the economic and reputational harm caused by counterfeit goods and piracy, imposing both imprisonment and fines.
1. Case: State vs. Ramesh Koirala (Kathmandu District Court, 2008)
Facts:
Ramesh Koirala was caught selling counterfeit branded shoes in a local market. The shoes bore a popular international brand logo without authorization.
Legal Provisions Applied:
Industrial Property Protection Act, 2059, Section 34 (unauthorized use of trademark)
Section 262 of the Criminal Code (fraudulent trade practices)
Court Findings:
Court confirmed the goods were unauthorized reproductions and intended to deceive consumers.
Evidence included seized counterfeit goods and witness testimony from buyers.
Sentence:
1 year imprisonment.
Fine of NPR 50,000.
Significance:
Demonstrated strict enforcement against counterfeit goods in retail markets.
2. Case: Shanti vs. State (Supreme Court, 2010)
Facts:
Shanti was accused of reproducing pirated DVDs of international movies and distributing them in Kathmandu.
Legal Provisions Applied:
Copyright Act, 2059, Sections 58–61 (unauthorized reproduction and distribution)
Court Findings:
Court recognized copyright infringement as serious economic harm.
Piracy of audiovisual content was treated as a criminal offence, not merely civil.
Sentence:
6 months imprisonment.
Fine of NPR 100,000.
Confiscation of all pirated DVDs.
Significance:
First high-profile case emphasizing criminal liability for copyright piracy in Nepal.
3. Case: State vs. Bipin Rai (Pokhara District Court, 2012)
Facts:
Bipin Rai imported counterfeit pharmaceutical products labeled as genuine medicines. Victims reported adverse reactions.
Legal Provisions Applied:
Industrial Property Protection Act, 2059 (trademark violation)
Muluki Criminal Code, Sections 262–263 (fraud and endangering public health)
Court Findings:
Court considered risk to public health as an aggravating factor.
Imposed strict punishment to deter counterfeit pharmaceutical trade.
Sentence:
2 years imprisonment.
Fine of NPR 150,000.
Confiscation and destruction of counterfeit drugs.
Significance:
Highlighted courts’ willingness to increase penalties when counterfeit goods endanger public safety.
4. Case: Rajesh vs. State (Kathmandu District Court, 2015)
Facts:
Rajesh was selling counterfeit software and distributing unauthorized copies of popular computer programs.
Legal Provisions Applied:
Copyright Act, 2059, Sections 58–60
Industrial Property Protection Act, Section 34
Court Findings:
Court emphasized that software piracy harms international trade relations.
Court also noted the technical evidence (digital copies) and witness testimony.
Sentence:
1 year imprisonment.
Fine of NPR 75,000.
Confiscation of all computers and software used in distribution.
Significance:
Expanded jurisprudence to digital and software-related IP crimes.
5. Case: State vs. Manisha Thapa (Supreme Court, 2016)
Facts:
Manisha Thapa was selling counterfeit luxury handbags bearing famous trademarks at a local mall.
Legal Provisions Applied:
Industrial Property Protection Act, 2059, Sections 34–35
Criminal Code, Section 262 (commercial fraud)
Court Findings:
Court held that intent to deceive consumers and profit from false branding is sufficient to establish criminal liability.
Seized goods included over 500 handbags and related packaging.
Sentence:
1.5 years imprisonment.
Fine of NPR 200,000.
Significance:
Reinforced that trademark counterfeiting is treated as a criminal offence, not just a civil matter.
6. Case: State vs. Hari Bahadur (Biratnagar District Court, 2018)
Facts:
Hari Bahadur was selling counterfeit mobile accessories (chargers, headphones) with logos of reputed brands.
Legal Provisions Applied:
Industrial Property Protection Act, 2059, Sections 34–35
Consumer Protection Act, 1998
Court Findings:
Court highlighted that consumer deception and economic loss are key factors in sentencing.
Emphasized deterrence for small-scale counterfeit markets.
Sentence:
9 months imprisonment.
Fine of NPR 75,000.
Confiscation of all counterfeit products.
Significance:
Demonstrated courts are willing to prosecute smaller-scale counterfeit sellers to protect consumers and IP rights.
7. Case: State vs. Sanjay Pradhan (Kathmandu District Court, 2020)
Facts:
Sanjay Pradhan was distributing pirated e-books and scanned textbooks online.
Legal Provisions Applied:
Copyright Act, 2059, Sections 58–61
Cybercrime provisions of the Muluki Criminal Code
Court Findings:
Court emphasized digital piracy as a growing threat to intellectual property.
Ordered strict confiscation of all digital content and platforms used.
Sentence:
1 year imprisonment.
Fine of NPR 100,000.
Permanent ban from online content distribution.
Significance:
Marks evolution toward digital IP enforcement, reflecting modern commerce realities.
Summary of Observed Trends
Strict Criminal Liability: Both physical counterfeit goods and digital piracy are treated as crimes, not just civil offences.
Aggravating Factors:
Public health risks (pharmaceuticals)
Position of trust or mass distribution
Digital piracy or online distribution
Sentencing Trends:
Imprisonment from 6 months to 2 years
Fines ranging from NPR 50,000 to 250,000
Confiscation and destruction of counterfeit goods
Modern Adaptation: Courts recognize digital content piracy, software piracy, and e-commerce counterfeiting as serious offences.
Consumer Protection Linkage: Courts are increasingly protecting consumers from fraud alongside intellectual property holders.
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