Swastik Fragrance vs. Dharmapal Satyapal: Lessons on Preemptive Trademark Squatting
A Nepali company registered India's Rajnigandha mark and kept it — through the DOI and the courts. The case that shows why foreign brands must file in Nepal before they arrive.
Rajnigandha is one of India's best-known pan masala brands, owned by Dharmapal Satyapal Limited. It is also, in Nepal, the registered trademark of a Nepali company — Swastik Fragrance — which filed the mark years before the Indian owner ever sought protection here.
Dharmapal Satyapal fought. And lost — through the Department of Industry and up through Patan. The case is the standing warning: Nepal is first-to-file, and the first filer does not have to be the true owner.
In short
Swastik Fragrance, a Nepali company, registered the RAJNIGANDHA trademark in Nepal roughly fourteen years before Dharmapal Satyapal Limited — the Indian owner of the famous brand — sought registration there. Dharmapal Satyapal's challenge failed at the Department of Industry and again at the then Patan Appellate Court, which ruled for Swastik. The case illustrates the mechanics of preemptive squatting in Nepal's first-to-file system: registration follows the application, not the reputation; a well-known mark acquired genuine fame abroad faces a local registrant's paper priority, and the true owner must displace a valid registration through opposition or cancellation on narrow grounds rather than simply claim what is 'theirs'. The lessons: foreign brands must file in Nepal BEFORE market entry (the filing costs hundreds of rupees; the buy-back costs millions); monitoring the Bulletin catches squatted filings inside the 90-day opposition window, where they are cheapest to stop; and reputation evidence alone does not reverse a registration — bad faith and well-known-mark arguments help, but prevention beats litigation every time.
How the squat happened — and why it worked
The mechanics of the case are mundane, which is the point. Swastik Fragrance applied at the DOI for RAJNIGANDHA — a name with a registered, famous owner in India — and the application proceeded: accepted, published, unopposed (the true owner was not watching Nepal's Bulletin), registered. Years later, when Dharmapal Satyapal's products and ambitions reached Nepal, the register already had a legally valid owner of the mark.
The Indian company's legal position was not 'this is our famous brand' — in a first-to-file system that is a starting point, not a conclusion. It was: the registration injures our reputation, the adoption was in bad faith, the mark is well-known and entitled to Article 6bis protection. Those arguments are real — Nepal's courts have accepted well-known-mark protection in other cases — but they must be proved, in proceedings, against a paper priority that was filed correctly and aged into strength.
- Filed first, published, unopposed, registered — the default pipeline
- First-to-file makes paper priority real property in Nepal
- Fame abroad is evidence to be pleaded, not a trump card
Legal references
- Patent, Design and Trade Mark Act, 2022 (1965) — English translation (PDF) — WIPO Lex
- Department of Industry — Industrial Property Section — Government of Nepal
The litigation: why the challenge failed
Dharmapal Satyapal pursued the dispute from the DOI to the then Patan Appellate Court — and lost, with the courts upholding Swastik's registration. The reported reasoning tracks the system's structure: the local registration was validly obtained under the Act; the foreign owner's reputational fame in India did not, by itself, invalidate a Nepalese registration; and the evidentiary burden of proving bad faith or well-known status at the relevant time is heavy.
Contrast Kansai Nerolac, where the foreign brand ultimately won: there, the evidence of bad faith and deceptive similarity was compelling enough to invoke the no-limitation rule for mala fide registrations. The two cases are the same problem with different facts — and the difference between winning and losing was the evidence of the squatter's bad faith, not the fame of the brand.
| Kansai Nerolac (won) | Rajnigandha / Swastik (lost) | |
|---|---|---|
| Mark status | Foreign brand locked out before entry | Famous brand challenged after registration |
| Decisive evidence | Bad faith at registration, deceptive similarity | Reputation abroad; thin proof of mala fide adoption |
| Forum outcome | Supreme Court: no limitation on bad-faith revocation | DOI and Patan: registration upheld |
| Lesson | Bad faith, proved, kills squatting | Fame alone does not displace a valid registration |
Legal references
The economics: hundreds vs. millions
The asymmetry of the case is the lesson. Filing a trademark in Nepal costs NPR 1,000 per class to file and NPR 5,000 to register — a rounding error against any market-entry budget. Recovering a squatted mark costs: opposition or cancellation proceedings (years), possibly a buy-out at whatever price the squatter's leverage supports — and reported practice in Nepal includes squatters demanding large sums to return foreign brands' names, with some investors simply declining to enter. Reliance's reported refusal to invest in Nepal after finding its mark already locally owned is the scenario every brand counsel should price.
The discipline that prevents all of it costs almost nothing: file before entry — the application date, not the launch date, is what matters; watch the Bulletin — a squatted filing caught inside the 90-day window is an opposition, not a saga; and screen the register before assuming a name is free because no one uses it locally yet.
- Filing: ~NPR 6,000 per class. Buy-back: whatever the squatter asks
- Squatters demand payment; some FDI never arrives
- File before entry; watch the Bulletin; screen the register
If it has already happened to you
The remedial sequence for a brand facing an existing squatted registration: gather the evidence — home registrations dated before the Nepalese filing, product history, market recognition, and anything showing how the squatter knew of the mark (distribution relationships, prior dealings, company filings); screen the squatter's portfolio — squatters file patterns, and related applications help prove intent; choose the forum fight — cancellation on bad faith and deceptive similarity is the register-level route (with Kansai Nerolac's no-limitation rule available where mala fides can be shown), while non-use cancellation is the quiet alternative where the squatter never traded; and negotiate from strength — the buy-out price falls when the squatter's registration is provably vulnerable.
None of it is cheap, and none of it is certain — which is precisely why this case is taught as a prevention lesson. The Rajnigandha registration stands today because someone filed first and no one was watching. Your brand's version of that story is optional.
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This article is general information, not legal advice.