In a significant trademark opposition decision, Nepal’s Department of Industry (DoI) has clarified that trademark infringement may occur even when goods or services fall under different trademark classes, provided there is a likelihood of consumer confusion. The ruling in Nikai Gulf FZCO v. Yiwu Target Electric Appliances Co. Ltd. reinforces that trademark classification is administrative in nature and not decisive in determining infringement.
This decision marks an important development in Nepalese trademark jurisprudence and aligns domestic practice with internationally accepted principles of trademark law.
The respondent argued that its application for the trademark “NIKAI” under Class 8 did not conflict with the complainant’s earlier registrations under Classes 7, 9, and 11. However, the DoI rejected this argument, holding that the similarity of goods, trade channels, and consumer base outweighed the technical difference in classes.
The authority emphasized that consumers do not consider trademark classifications when purchasing products. Instead, they rely on brand recognition, overall impression, and perceived source of goods. Where identical or similar marks are used for related goods, confusion is inevitable—regardless of class distinctions.
The decision highlights that consumer perception and market reality are central to trademark infringement analysis. In this case, both parties’ products—electronic appliances and personal grooming devices—were marketed through similar trade channels and targeted the same consumers. The use of an identical trademark was therefore likely to mislead the public and dilute the goodwill of the earlier mark.
This approach reflects established international precedent, where courts consistently hold that trademark classes do not define the scope of protection when goods are commercially related.
A critical factor in the ruling was the finding of bad faith. The complainant’s trademark had been in long-standing use and registered in over sixty countries. The DoI concluded that the respondent sought to exploit this reputation by registering an identical mark in a different class, thereby engaging in unfair competition.
Notably, the DoI confirmed that prior reputation and international use can be sufficient to block later applications, even if the senior mark is not registered locally in the same class.
This decision sends a strong warning to businesses and trademark applicants:
Trademark searches must go beyond class numbers
Identical or similar marks for related goods carry high infringement risk
Bad faith adoption will not be protected by technical classification differences
For brand owners, the ruling strengthens enforcement strategies against infringers attempting to misuse class-based loopholes.
The Nikai vs. Yiwu decision firmly establishes that trademark protection in Nepal extends beyond rigid class boundaries. Where marks are identical, goods are related, and consumer confusion is likely, infringement will be found—even across different classes. This judgment reinforces the core objective of trademark law: protecting brand goodwill and safeguarding consumers.
Nikai Gulf FZCO was represented by Apex Law Chamber before the Department of Industry.