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.

Intellectual properties : Vulnerable to piracy in absence of strong laws
Intellectual properties : Vulnerable to piracy in absence of strong laws
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.

Orginal cassettes along with pirated copies : Fake flood
Orginal cassettes along with pirated copies : Fake flood
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.