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COVER STORY |
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COVER STORY |
INTELLECTUAL
PROPERTY RIGHTS Intellectual Property (IP)
rights is the latest buzzword in international trade. Including copyrights as well as
industrial property rights, IP intends to protect and promote creativity. Long suffering
from piracy and violation of rights, Nepalese creators and entrepreneurs are clamoring for
strict protection from the state. As Nepal prepares to join the World Trade Organization,
which includes respecting IP rights, it needs legislative as well as administrative
instruments. A new copyright act has come into force and initiatives are under way
to†introduce new act to govern industrial property rights as well. Respecting IP
rights also makes economic sense, as curtailing piracy would rake in millions of rupees in
extra revenue and promote creativity and entrepreneurship, which will, in turn, trigger a
cycle of growth By SANJAYA DHAKAL If you go to any music store and buy a
cassette of your favorite singer, chances are that you will end up buying a pirated one.
Unless you give a serious look at the label of your cassette, you may never recognize it.
The music sector in Nepal is marred by piracy. Sixty percent of the market is usurped by
the pirates, says a leading music entrepreneur. You may think that piracy does not affect
you. It is the rich music businessmen who may lose few hundred thousand rupees, you may
think. You are wrong.
When you buy a pirated cassette, you
will be inflicting serious damage to several sectors. Just consider this: you like a
particular singer and buy his/her songs. Indirectly, you are trying to promote the singer
so that he/she will continue to create more songs that you would like to listen to. When
you buy a pirated cassette, the singer will not even get a penny. All the money will be
eaten up by the unscrupulous pirates at the cost of the original creator. Moreover, the
pirated cassettes, almost invariably, are of inferior quality. This will lead to the
collapse of genuine music producers and entrepreneurs. Besides, you will be hurting the
national economy as pirates do not pay revenues. In one stroke, you will be hurting the
creator, entrepreneurs and the state. Worse, you will also be encouraging the pirates. Music is just one example. Pirates have
swarmed into almost all sectors of creativity and entrepreneurship, including films,
books, inventions and consumer products. Tens of millions of rupees are lost annually by
the country due to such piracies. Piracy is not limited within the boundary
of a nation alone. It affects international trade as well. To root out piracy, the United
Nations has formed the World Intellectual Property Rights Organization (WIPO). Likewise,
the World Trade Organization (WTO) has a special provision called Trade Related Aspects of
Intellectual Property Rights (TRIPS) which intends to root out piracy from international
trade. The WIPO says that the intellectual
property plays an important role in an increasingly broad range of areas, ranging from the
Internet to health care to nearly all aspects of science and technology and literature and
the arts. Understanding the role of intellectual property in these areas - many of them
still emerging - often requires significant new research. What Are Intellectual Properties? Intellectual Property embraces a vast
network. According to the WIPO, it refers to creations of the mind: inventions, literary
and artistic works, and symbols, names, images, and designs used in commerce. IP is divided into two categories:
industrial property, which includes inventions (patents), trademarks, industrial designs,
and geographic indications of source; and copyright, which includes literary and artistic
works such as novels, poems and plays, films, musical works, artistic works such as
drawings, paintings, photographs and sculptures, and architectural designs. Rights related
to copyright include those of performing artists in their performances, producers of
phonograms in their recordings, and those of broadcasters in their radio and television
programs.
IP Rights Violation In Nepal The violation of intellectual property
rights in Nepal is a serious and burgeoning issue. Until a few years ago, awareness of the
need to protect IP rights was almost non-existent. Presently, due to several initiatives,
there is a fair understanding of this need. The government has assigned the Ministry of
Tourism, Culture and Civil Aviation (MoTCCA) to look after the aspects of copyright
protection. Likewise, the Department of Industry looks after the industrial property
aspects. Creative artists and entrepreneurs, too,
have started to demand protection from the state. "We are bleeding. Unless the
government takes some concrete steps against pirates, the creators will be
frustrated," said Kumar Basnet, senior singer and president of Nepal Music
Association. He says the state, too, is losing millions of rupees thanks to piracy. Agrees Rajendra Khetan, a leading
industrialist and spokesperson of the Federation of Nepalese Chamber of Commerce and
Industry (FNCCI). "At lot of our brands and industrial property are being exploited
unfairly. There is not enough regulatory and monitoring control on issues of patent
rights," he says. Even government officials agree that there
is a need to protect IP rights better. Surya Bhandari, registrar of the copyright
protection section at the MoTCCA, says, "We are working together with the respective
stake-holders to effectively protect copyrights." Legal Situation Nepal is in the process of updating its
laws regarding the IP rights protection. Bound by the Berne Convention (relating to
copyright) and Paris Convention (relating to industrial property right), the government
has shown willingness to replace its old laws with progressive ones. Parliament passed the Copyright Protection
Act 2002 early this year. "This new law is compatible with the international
standards including the TRIPS," says Bhandari. He adds that the government has
already formed a task force to come up with necessary regulations to effectively enforce
the act. "The target is to come out with the regulation within the year 2002."
The latest copyright act intends to protect creators and their financial rights. It
envisages a separate royalty collecting body that will scientifically collect and
distribute them. However, on the industrial property front,
the country is still guided by the outdated act that was introduced way back in 1965.
"We know that we need a new act and we are working to introduce it as soon as
possible," says Madhusudan Poudyal, director at the industrial property section at
the Department of Industry (DoI). "Our patent right rules are old and as
per WTO regime, well, protection has not been spelt out," says Khetan, adding that
the FNCCI is currently working with the government and lobbying hard to bring out
progressive laws. Prominent corporate lawyer Bharat Raj
Upreti also says that there is a need to sharpen the legislative tooth to effectively
counter the violation of IP rights. "Recently, the new copyright act has been
introduced. But the trademark acts are very outdated. The government will not be able to
meet its commitment without new and polished laws." According to Upreti, there are many cases
pending at the DoI regarding the violation of industrial property rights. "The fact
is that the DoI does not have specialized manpower to deal with the cases. As a result,
there are many cases that are pending for three years or more. As far as protecting IP
rights is concerned, we need to address twin concerns: that of updating laws and laying
down effective dispute settlement mechanism." Financial Aspects Of IP Rights It is not for nothing that there has been
such a hue and cry over the need to protect IP rights. Tens of billions of dollars are at
stake in the international trade. International piracy is a billion-dollar business. As it is clear that violation of IP rights
is occurring in Nepal as well, it is safe to assume that we are also losing millions of
rupees to piracy. There are regular news reports of how spurious products are harming
genuine industries. ìThe cheap, imitated and fake products have been flooding our
markets. Because of apparent lack of awareness on the part of consumers, these products
are bought by unsuspecting buyers,î said a businessman. "Though we have not done any research
to find the exact loss, we can say it is in millions of rupees," says Poudyal. In fact, Santosh Sharma, the director of
Music Nepal and general secretary of Copyright Protection Society of Nepal (CPSN), puts
forth an interesting analogy. "The earnings from copyright contributes a whopping 5
percent of the total GDP of the United States. Whereas in Nepal it is way below even one
percent. Imagine how much we are losing." According to him, if the government
effectively protects IP rights, it can increase its revenue by a huge margin.
"Protection of IP rights is a win-win proposition. There is nobody who lose by this
except the unethical and unscrupulous pirates. The government, entrepreneurs, creators,
consumers all stand to gain. Besides, if we respect IP rights, the image and credibility
of our nation will vastly improve in the eyes of international community." Just to give an idea how much the state can
gain by enforcing copyright, Sharma cites the example of the music industry. According to
him, the music industry conducts transactions worth 150 million rupees and the
broadcasting agencies conduct transactions worth 350-400 million rupees. As per the
international tradition, these two sectors should be providing royalty worth 20 to 25
million rupees. Apart from these two, there are many other places where music are played
like in restaurants, theaters and even abroad from where additional 5-10 million rupees
can be collected as royalty. The control of piracy also leads to astronomical growth of
the industry, entrepreneurs and creators. Conclusion Nepal is preparing to enter the WTO regime.
Already most member states of SAARC region are WTO members. Once it enters the WTO, Nepal
will have to abide by the TRIPS, which will come into force in 2006. It is prudent and logical for Nepal to be
fully prepared to abide by TRIPS before 2006. To be compatible with TRIPS, there is a need
to update certain laws. Already the new copyright act is in force. Once its regulations
are also adopted, it will be fully functional. In the domain of industrial property, a lot
needs to be done. The old act has to be replaced with a new one. Respecting IP rights is not only a matter
of international compulsion but also a domestic necessity. No country that does not
respect its creators, artistes and entrepreneurs can dream of marching ahead on the path
of prosperity. 'The New Act Has Provided Us With A Basis' — SANTOSH SHARMA
Santosh Sharma is the
general secretary of Copyright Protection Society of Nepal (CPSN). He is also the director
of the country's largest music company - Music Nepal. Sharma has long experience in
dealing with the issues of copyrights in the country. He spoke to SANJAYA DHAKAL about
various facets of copyright and the status of its protection in the country. Excerpts: What is the present legal status of
copyright protection in the country? The Copyright Protection Act 2002 has come
into force after it received the royal seal on August 16, 2002. But there is no
regulation. In the absence of regulation, it is not possible to implement the letter and
spirit of the act. As such, there is no material difference in the situation before and
after the introduction of the new act. Definitely, the act has provided us with a basis.
After the regulations are adopted, we will then have mechanisms and machinery to implement
it. When will the regulations come out,
then? Already a task force has been formed by the
government to draft the regulation. Officials from the law and culture ministries and
myself are members of that task force. We have also held few meetings of this task force.
In fact, I am currently studying regulations of different countries. We also want to first
organize a public discussion inviting the stake-holders so that we will get their version
and incorporate them in the regulations. Then, we would submit our conclusions to the
government for final scrutiny and adoption. I guess the process could take two months. What will be the opportunities for
the creators once this act is fully enforced? This act has been introduced for the sake
of creators only. The basic objective of the act is to protect their creativity. Different
units will be set up to realize it. According to the act, a separate entity called Royalty
Collecting Society - whose shareholders will be the creators themselves - will be formed.
This society will be headed by an independent management team appointed by shareholders.
This team will then be responsible for monitoring as well as collecting all royalty as
prescribed by the law. The royalty, thus collected, will ultimately be distributed to the
respective creators based on certain standard. This distribution standard is an
international software that will be provided by WIPO. Since TRIPS will come into force in
2006, how do you find our preparation in that direction? The TRIPS involves both the copyright as
well as industrial property rights. As far as copyright is concerned, the latest act is
fairly compatible with the TRIPS provisions and we have also joined the Berne Convention.
In the field of industrial property rights too, there are initiatives to draft a new act.
Besides, Nepal has also joined the Paris Convention in this regard. Indeed, there are many
controversial things that still remain to be clarified like in the case of biodiversity,
folklore and so on. We are very backward in this point. I think we should be able to take
maximum advantage of our knowledge. What is the history of copyright
protection in Nepal? The earliest official mention of copyright
violation was made by then minister and great poet Laxmi Prasad Devkota. In his visit to
then Soviet Union in 1959 he had mentioned that Nepalese creators were suffering due to
copyright violation. For the first time in 1965, the government introduced Copyright
Protection Act. Bhim Nidhi Tiwari was the registrar to deal with copyright issues that
time. But that act focused merely on literature and film. Besides, this act provided for
protection to only those creations that were duly registered. However in the international
arena, the copyright has a long history. In 1709, there was the Statute of Anne, which is
regarded as the first legislative intervention to protect copyright. When I established
Music Nepal company in 1982, I got a rude shock. Just as our music were getting popular,
we were being seriously affected by piracy. Then law provided very limited scope to
penalize the culprits. Ever since I launched a crusade against piracy together with
like-minded friends. We set up the Copyright Protection Society of Nepal. It was in 1996
that WIPO approached me with proposals for training. I received various training in this
field and then we focused on bringing in new act. Fortunately, we managed to introduce new
act this year. Now we have to move towards the second phase that involves the setting up
of infrastructures and training of manpower. For effective implementation, we need to have
capable manpower in police as well as customs. We are working in this area and have been
assured of cooperation from WIPO and other foreign countries. 'Violations Of Industrial Property Rights Have Immense Negative Impact' — MADHUSUDAN POUDYAL
Madhusudan Poudyal is
the director of Industrial Property Section at the Department of Industry. The section is
the focal body that deals with issues of industrial property protection. He spoke to
SANJAYA DHAKAL on the current situation of industrial property protection in the country.
Excerpts: What do you mean by industrial
property? The industrial property, as recognized by
the WIPO, include patents (inventions and innovations), design, trademark, geographic
indications of source, utility models and protection of secret information. Patents
pertain to inventions and technological innovation including both the new invention as
well as innovative use of existing material that can be commercially exploited. Design
relates to specific shapes or attraction that could be colored, sculpted or so on.
Trademarks are the signs, symbols, figures that introduce a certain product. To what extent does violation of
industrial property rights affect the country? Such violations have immense negative
impact and it hits on several fronts. A genuine producer will have spent huge amount of
money to advertise and promote their products. But the pirates escape this cost and sell
their products at the cost of genuine producer. So, the genuine producer will feel the
biggest impact. However, customers, too, will be equally hurt. They will be misguided and
waylaid to buy fake products that may not have the same quality as desired. Likewise, this
practice also erodes the revenue base of the government. The social ethics and minimum
norms of business stand thoroughly violated. So it has an all-round effect. How much money does society lose
due to such violation? There has been no research to find the
exact loss because of the violation of industrial property rights. But it is immense and
runs into millions. The piracy and violation has increased in our country along with the
increase in the trade volume. We have been making best use of the existing laws to
penalize the culprits. We regularly inform our custom officials on this aspect, as well.
But often we have seen that some unscrupulous persons attempt to protect these culprits. What are the existing legal
instruments to protect industrial property? Right now the Patent, Design and Trademark
Act 2022 B.S (1965 AD). is active. The Consumer Protection Act also has few provisions to
control unfair activities. So far, as the protection of audio-visual items and other
materials, a new Copyright Act has come into force. Are there any initiatives to bring
in a new act to govern industrial property rights? Definitely, we are in the process of
introducing new act to replace the Patent, Design and Trademark Act 2022 B.S. How do you find the trend of
registering patents, designs and trademarks in our country? Due to rise in trade volume, the trend is
increasing. There is an adequate demand for trademark registration. But as far as patent
and design are concerned, they are not much registered. Maybe there is a lack of knowledge
on our part. There is a tendency among us to flash and publicize new inventions before
patenting them. Whereas in other countries people flash their inventions only after
getting patent from the state, which grants them the monopoly to commercialize it. At
present, there are 17,500 trademark registration at the department. But there are only 50
patent and 60 design registration. What is the volume of complains the
department handles regarding the violation of industrial property rights? There are many complaints. The department
of industry is empowered to hear the complaints first. Only if the parties are not
satisfied, can they go to the court. How would the enforcement of TRIPS
affect us, then? Well the provisions of TRIPS are not much
than what we discussed above. It all boils down to protecting the aforementioned rights.
The TRIPS embraces these rights in the case of international trade. It intends to
forcefully implement the protection of these rights in the international trade. There are also concerns that
westerners are exploiting patent rights and have patented the use of our ancient herbal
medicines and so on. What do you say? There is much misunderstanding on this
point. Patenting cannot be done right away. It has to be backed by documents and proofs.
Patent involves novelty, inventive step and industrial applicability. No one can patent
something that is already in use. They may patent for innovative use of existing
materials. Patent can also be had for microbiological and genetic derivative. Whenever any
state grants patents on say some herbal medicines, they first publish facts and documents.
We need to study them and object if they are not true. One can always falsify patent
claims if they are not genuine. In fact, they have falsified the claims on few patents of
Basmati rice. What we can do is submit our documents listing the details of use of herbal
and ayurvedic medicines and things like that. This will help us from such undue patenting. |
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editor: spotligh@mos.com.np |
