Trademark Assignment vs. License in Nepal: The Difference That Decides the Deal
Trademark assignment vs. license in Nepal: transfer of ownership versus permission, the NPR 2,000 DOI recordals for each, and why confusing the two is costly.
A Kathmandu brand owner is offered two deals in the same month: a franchise partner asking to use the mark, and a buyer asking to take it over entirely. Both are 'trademark deals'; they could not be more different on the register.
Assignment and licence answer different questions — who owns the mark, versus who may use it — and in Nepal each carries its own paperwork, its own DOI recordal and its own failure mode when confused.
In short
A trademark assignment in Nepal transfers ownership itself — recorded at the Department of Industry for NPR 2,000 per mark, it changes the proprietor on the register. A trademark licence grants permission to use while ownership stays put; recording the licence (also NPR 2,000) underpins royalty repatriation through Nepal Rastra Bank. Trademark assignment vs. license is the difference between who owns and who may use — the deal and the recordal must say the same thing.
Trademark assignment vs. license: the core difference
Two instruments answer two different questions: an assignment answers 'who owns the mark?', a licence answers 'who may use it?'. The distinction decides the paperwork, the fees, the renewal duty and what happens when the relationship ends.
An assignment moves ownership. The owner executes a written assignment deed, and the change is recorded at the Department of Industry so the register names the new proprietor — the recordal costs NPR 2,000 per mark under the current fee schedule. After recordal, the assignee renews the mark (the 7-year term and its 35-day renewal window are now their problem), enforces it, and can assign it onward. Transfers are governed by the PDTA's provisions on trademark transfers (Section 21D), and an unrecorded assignment leaves the register pointing at the seller — a defect that surfaces at renewal, in enforcement and in any diligence.
Licence: permission with ownership intact
A licence leaves ownership where it is and grants defined permission: scope, territory, duration, quality control and royalty. The licensor keeps the renewal duty, the enforcement decisions and the register entry; the licensee gets a right that exists only inside the agreement. Recording the licence at the DOI (again NPR 2,000 per mark) does practical work: it publicises the permitted use, and for foreign-owned brands it is the step that supports repatriating royalties through Nepal Rastra Bank under the licensing framework — an unrecorded licence is a weaker instrument precisely where the money moves.
| Question | Assignment | Licence |
|---|---|---|
| Who owns the mark? | The assignee, from recordal | The licensor, throughout |
| DOI recordal | NPR 2,000 per mark — proprietor changes | NPR 2,000 per mark — permission noted |
| Renewal duty (35-day window) | Assignee's | Licensor's |
| Quality control | Not applicable — owner uses its own mark | Essential: the licensor polices how the mark is used |
| If the other side defaults | The mark is yours regardless | Termination rights; the mark never left |
| Typical use | Sale of a business or brand line | Franchising, distribution, royalty deals |
The recordal sequence, step by step
Whether the deal is an assignment or a licence, the register work follows the same shape:
Execute the instrument
The written deed or agreement — assignment language or licence terms, consideration recited, and for licences the royalty mechanics that NRB-facing recordals will need.
File the recordal at the DOI
Lodged through the agent of record with the NPR 2,000 per mark fee — assignment recordal or licence recordal, as the instrument dictates.
Confirm the register reflects the deal
The register entry should name the new proprietor or note the permission. An unrecorded deal leaves the register telling a story the contract contradicts.
Re-route what follows
Renewals, correspondence and enforcement follow the register: the assignee takes the 7-year renewal calendar; the licensee keeps looking to the licensor's calendar.
The failure modes of confusing the two
The mis-drafts are predictable. An 'assignment' drafted as a licence leaves the seller on the register — and able to mortgage or re-sell a mark the buyer believed they owned. A 'licence' drafted as an assignment hands over the register entry while the parties behave as licensor and licensee, and the licensor discovers at renewal time that the 7-year window now belongs to someone else. Distribution agreements deserve special care: an exclusive distributor in Nepal is usually a licensee, not an owner, however exclusive the territory — and the agreement should say so before the relationship does.
Drafting the deal the register can follow
Three habits keep the paperwork and the register aligned. State the character of the deal in one unambiguous sentence — 'assigns' or 'grants a licence' — and let every other clause follow it. Recite the consideration and, for licences, the royalty mechanics that NRB-facing recordals will need. And record whatever was agreed at the DOI while both parties are cooperative: recordals cost NPR 2,000 and take effect on the register, while disputes about unrecorded transfers cost far more than the filing ever would. Whether the deal is an assignment or a licence, the principle is the same — the register should tell the same story as the contract.
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This article is general information, not legal advice.