Statute of Limitations on IP Fraud: Why Malicious Intent Voids the Clock

The rule and where it comes from

The limitation rule comes from the Kansai Nerolac decision (NKP 2077, Decision No. 10561), where the Supreme Court held, in terms, that no time limitation applies to revoking a trademark registration where: (a) a trademark — including a foreign trademark — was registered with bad faith; (b) the conduct of the company or the Office of the Company Registrar appears unfair from the beginning; or (c) the registration process seems malafide on its face.

The logic is the common law's oldest fraud principle — fraud unravels all — adapted to the register: limitation periods protect defendants who acted in good faith and relied on the passage of time. A registrant who knew the mark was another's, and filed to capture it, is not that defendant. The clock never starts because the equity never accrues.

• No limitation where registration was mala fide at origin
• 'Unfair from the beginning' is the operative window
• Time bars protect good-faith reliance — squatters have none

What counts as 'malicious intent'

Bad faith is proven conduct, not suspicion. The patterns that Nepalese practice and the case law recognise: preemptive filing of a foreign brand's exact name before the owner's entry (the Kansai Nerolac and Rajnigandha fact pattern); filing by insiders — distributors, agents, employees, JV partners who learned the mark through a business relationship; portfolio patterns — a filer holding dozens of famous foreign names, whose register footprint itself evidences intent; company-name mirroring — registering the mark as a company name at the OCR to deepen the capture; and demand letters — using the registration to solicit payment from the true owner, which converts the filing into extortion evidence.

The evidentiary sources are correspondingly concrete: OCR company records (dates, names, addresses of directors), the DOI file (the application's documents, POA, any claimed home registration), commercial records showing the relationship with the true brand, timing (filed weeks before a known market entry), and conduct after registration (non-use, or use only as leverage). Assembled, these turn 'malicious intent' from a pleading into a proof.

The strategic use of the no-limitation rule

For brand owners, the rule changes the strategy of delayed discovery. A mark you only learned about this year — registered a decade ago by a former distributor — is challengeable today, on bad faith, without any limitation argument to answer. The rule also reframes negotiations: a squatter whose registration is provably mala fide holds nothing of value, and buy-out prices should reflect that (they often do not, because squatters bank on the brand's ignorance of this rule).

The discipline the rule demands in return: move anyway. Delay is not a legal bar, but it is a practical cost — evidence ages, witnesses scatter, and intervening rights (licenses granted, goodwill built) complicate the unwind. And the pleading must be specific: 'bad faith' asserted without the evidentiary pattern fails exactly where the Swastik Fragrance case shows challenges failing — reputation without proof of mala fides loses to a valid registration. File promptly, plead precisely, prove the pattern.

• Delayed discovery is challengeable — no clock, but move anyway
• Negotiate knowing a mala fide registration is worth little
• Specific bad-faith pleading or the rule stays theoretical

The boundary: what the rule does not reach

The no-limitation rule is for bad-faith registrations. Ordinary register disputes — good-faith conflicting applications, descriptive-mark arguments, similarity claims without mala fides — remain subject to the normal procedural timelines of opposition (the 90-day window from publication) and challenge. Treating every adverse registration as 'bad faith' to escape a missed deadline is a pleading error the DOI sees often and discounts consistently.

The honest map: opposition inside the window is the primary defence; cancellation for non-use is the quiet route against registrations that were never used; bad-faith cancellation without limitation is the heavy weapon for the registrations that were never legitimate. Choosing the right instrument is the whole art — and the next guide in this series compares them directly.