Innovation | Universities | Research & Development | Intellectual Property Rights | Policy

Why are there a few patents in Nepal?

The country lacks in areas that give birth to ideas to begin with

- By Karan Poudel |

Photo by Alex Knight on Unsplash
Photo by Alex Knight on Unsplash

IT IS ESTIMATED THAT 50 MILLION PATENTS have been granted globally. So far more than 70 patents have been registered in Nepal, compared with Bangladesh’s 68 and Sri Lanka’s 356 and India’s more than 30,000 patents, in 2019. Like every other poor country, Nepal does too poorly in innovation to see a surge in patents. Reasons for a small number of patents are plenty. But only few stand out to explain this.

For poor countries, like Nepal, western-style patents bring many costs and few benefits. For example, with Intellectual property rights (IPRs) come higher-priced medicine or agriculture seed for the developing countries, making it more difficult for governments to reduce poverty. They are expensive to implement and need a lot of funding. Since Nepal doesn't have the expertise to draft patent laws that meet the international standards, there is a need to hire foreign services. 

Patents examiners need to be experts in their fields, such as electrical and pharmaceuticals, to identify the novelty of the claimed invention. Nepal does not yet have adequate resources to maintain qualified patent examiners in all the fields. With scarce money, it may rather opt to focus on other pressing concerns instead of polished intellectual-property rights. 

When there are no proper patent drafts–meaning a technical document that establishes novelty or non-obviousness of an invention–finding applications that are suitable for patent registrations becomes difficult. This, in turn, diminishes the ability of the country’s inventors to obtain patents. 

A lack of innovation or entrepreneurship is another reason. Nepal’s dismal performance in global competitiveness sheds light on the fact that it lacks in innovation capacity and skilled human resource and technological input. Its investment in research and development (R&D) is not very encouraging either. 

In 2020 Nepal invested 0.45% of GDP in R&D, up from 0.3% in 2009, but below South Asia’s average of 0.65%. Private sector’s investment in innovation is also very measly: a World Bank survey of Nepali firms shows that little innovation takes place in the domestic private sector.

Last year WIPO, an agency of the United Nations, ranked Nepal in the 111th among the 132 economies according to their innovation capabilities. The report shows that the country’s main weaknesses lie in human capital and research, institutions and knowledge and technology outputs. 

This is also evidenced by low quality and poorly funded universities in the country. At global scale though, universities and their research centers account for a considerable share of patents for new or improved products and processes.

The third reason is poorly designed intellectual-property protection laws. One such law that is in place is the Patent, Design and Trademark Act 1965. Under this law, for instance, patents are not subjected to the inventiveness criteria, leading to low quality patents registration or there is no protection against unfair competition and business practices.

Foreign companies are reluctant to build companies and invest in Nepal because of the prevailing copycat business environment. When imitations and infringements become the norm, it reduces the incentives for innovators to invent and invest in new ideas and research. In other words, new innovations will never see the light of the day.

Weak patents also cause firms, including locals, to work covertly for fear that somebody might steal their ideas. In such an environment, inventors are deprived from benefiting from their ideas. 

Some measures that Nepal could take to encourage more patent filings include understanding how the country would benefit from proper IP rights, and providing adequate resources, infrastructure and trained staff to the IP office to implement its responsibilities. Given the low level of IPRs awareness in the country, raising awareness among private and public stakeholders remains important. Investment incentives and research grants would encourage firms and universities to undertake research activities. 

Yet carefully worked-out policies for IPRs increase patent registrations and boost economic development receive little validation in poor countries. Some say patent protection doesn't work there because of their market dynamisms and subsequent low level of economic development. As a result, there is no intellectual property to protect. A study found little evidence of poor countries with strong patent policies benefiting from the implementation of such policies.

Nevertheless, policies that are applied in the right way and fit the country’s circumstance will nurture domestic industries and advance the sort of innovations that would benefit from patents. But protecting patents without stifling competition and innovation is a daunting task.

Karan Poudel is an Investment Writer/Editor at Ansu Group. He was a former writer-analyst at the_farsight.

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