A. General background information
(i) Form of Government
1. Bhutan has a population of less than 700,000 people, of which approximately 10% are located in the capital, Thimpu. Its democratic institutions are relatively new, with the Constitution only adopted in 2008. It provides for a “Democratic Constitutional Monarchy”. The three branches of Government are clearly defined in the Constitution although there is no complete separation of powers. The King is the Head of State and the executive authority is exercised by a Council of Ministers or Cabinet. The legislative function is vested in Parliament which is composed of the King, the National Council and the National Assembly and the judiciary consists of a system of national and local courts, with the Supreme Court as the court of last resort in this judicial hierarchy. Of the institutions above-mentioned, only the Supreme Court is pending establishment.
2. The present National Assembly was democratically elected in 2008 and forms part of Parliament. There was a prior National Assembly that was created in 1953, which acted as both a law-making and advisory body to the King. Under this defunct National Assembly, Bhutan’s first IP law, the Trademark Law of 1997 came into being although currently, it has been superseded. This National Assembly was dissolved in 2007 to pave the way for democratic elections to elect the present National Assembly mandated under the Constitution.
(ii) External relations, Industries, Trade and Economic Cooperation
3. Bhutan does not have a strong industry-based economy. Its biggest export is hydropower with the main, if not the sole, recipient country being India. It imports a variety of goods from India, including food products and textile. India is its main trading partner. WTO states that: “India takes 96% of the (Bhutan’s) exports and is a source of almost 90% of the imports.”
4. Bhutan has established formal diplomatic relations with 22 countries. These are: Austria, Australia, Bahrain, Bangladesh, Canada, Denmark, Finland, India, Japan, Kuwait, Maldives, Nepal, Netherlands, Norway, Pakistan, Republic of Korea, Singapore, Sri Lanka, Sweden, Switzerland, Thailand and the European Union. Notably, it has no relations with the United States, which is a major player in international IP promotion and protection.
5. Bhutan is a member of two regional trading groups; the South Asian Association for Regional Cooperation (“SAARC”) and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (“BIMSTEC”). The treaties Bhutan entered into in respect of these two regional groupings do not contain specific IP-related provisions.
6. Of late, Bhutan’s growing movie and music industries have called for regulations to be put in place, in particular, as regards protection of copyright, as a result of reported incidents of piracy of local films and CDs. The issue of copyright is probably the most familiar area of IP rights protection among the general public on account of wide media coverage of the movie and music industries.
(iii) Membership of IP-related multilateral bodies
7. Apart from WIPO where it became a member in 1994 and is a contracting party to four WIPO Treaties - the Berne Convention, Paris Convention, Madrid Agreement (Marks) and Madrid Protocol - Bhutan is also a member of WHO (1982) and UNESCO (1982). It has pending negotiations in WTO since 1999 to accede to the WTO Agreements.
8. It is a member of around 50 other inter-governmental and regional organizations, including the UN (1971) and some of its specialized agencies such as UPU, ITU and WMO.
B. Bhutan’s IP system and laws
(i) Government regulatory agency
9. The Intellectual Property Division (“IPD”) under the Ministry of Economic Affairs (“MOEA”) is the regulatory arm of the government responsible for administering the IP system in Bhutan and for the promotion of IP rights and their protection. Its main registries are the Registry of Trademarks, Registry of Patents, Registry of Industrial Designs and Copyright Registry. Of these, only the registration activities for Patent are not yet functional while the Registry of Industrial Designs only came into force on May 1, 2009.
(ii) Regulatory framework and current issues
10. Paragraph 13 of Article 7 (“Fundamental Rights”) of its Constitution guarantees to citizens of Bhutan their economic rights over their intellectual property. It provides:
“Every person in Bhutan shall have the right to material interests resulting from any scientific, literary or artistic production of which he or she is the author or creator.”
11. There are two acts that constitute Bhutan’s current principal IP legislation. These are the Industrial Property Act of 2001 (which superseded the Trademark Act of 1997) and the Copyright Act of 2001. As implementing regulations, there is the Industrial Property Rules of 2001.
12. The Copyright rules and regulations is planned to be issued by end of 2009 to implement the Copyright Act. IPD has outsourced to an IP agent the conduct of a preliminary study and drafting of provisions for the enforcement of copyright.
13. Responding to the clamor from the movie and music industries for protection of their art and creation, IPD is setting up a voluntary registration of copyright to serve as prima facie evidence.
(b) Patents and utility models
14. While the Industrial Property Act was enacted in 2001 and covers Patents, Industrial Designs and Marks, only the latter two have entered into force. The part on Industrial Designs entered into force recently, on May 1, 2009. The part of the Act concerning Marks entered into force earlier. (Under paragraph 1, Part I of the Industrial Property Act, the MOEA determines the date of entry into force of the various parts of the Act.) The part dealing with Patents is still non-operational.
15. IPD is not planning to establish a patent registration anytime soon. It wants to focus on utility models given the stage of development in Bhutan where not much original innovation is taking place (as yet). IPD stated that the Inventors Association has approached it but thinks that what the inventors profess to have invented do not qualify for a patent but rather, could be registered as utility models. With WIPO’s help, IPD has prepared a revised Industrial Property Act that includes utility models (which is not covered under the present Industrial Property Act). It plans to submit the draft revised Act to the National Assembly in 2010.
16. IPD would have wanted to adopt utility model regulations in India since it patterns much of its business models after those in India, except that India has not yet legislated on utility models. IPD also recognizes that any eventual search and examination in connection with a registration system for utility models would have to primarily include India in light of a marked tendency to copy Indian ideas and inventions in Bhutan. IPD is conscious of pressure being exerted by the Inventors Association and its expectations that a registration regime will soon be established.
(c) Industrial designs
17. With the entry into force on May 1, 2009 of Part III (“Industrial Designs”) of the Industrial Property Act of 2001, IPD received its first inquiry about the registration of a furniture design. The designer has been given the relevant forms to complete. However, the IPD staff in-charge of registration candidly admitted that when the designer submits his application, an examination will need to be carried out, which is where the challenge lies.
18. The IPD reported that, since 1997, it has processed approximately 6,800 Madrid applications (international) and 2,800 applications through the national system. Since 2006, it has used the IPASS system for the registration.
(iii) Enforcement and Adjudication
19. Paragraph 23 of Article 7 of the Constitution guarantees to citizens of Bhutan the right of recourse to the highest courts of the land to enforce their rights, including material rights over their intellectual property.
20. Apart from the Civil and Criminal Procedures which are broad and general in application, there are no IP-specific procedures for enforcement of IP rights. There are no courts with specialized jurisdiction, especially since to date, there has been hardly any case dealing with violations of IP rights. IPD reported that the few that were filed with the courts ended in extrajudicial settlement. While all courts in Bhutan are courts of general jurisdiction, the High Court strives to have at least one justice in its ranks with some IP specialization.
(iv) Awareness building and education
21. College or post-graduate education in Bhutan is still relatively limited in the range of courses being offered although there is increasing awareness within the Government of the need to develop the country’s educational institutions and their capabilities. There is no full-fledged law school in Bhutan and IP courses are not built in to any curriculum. There are about four IP agents or practitioners in the capital who have undertaken some sort of training concerning IP rights. One of them has a law degree from India, where most Bhutanese go for further education. With the recent opening of Royal Thimpu College, there are now two main tertiary-level educational institutions in the capital. The more established one is the Royal Institute of Management under the Royal Bhutan College.
22. Discussions with professors and lecturers from the two colleges indicated the paucity of IP awareness amongst the educators themselves. Small steps are being taken to offer IP related subjects or short executive courses so as to provide general IP information since there is simply no expertise and knowledge for a more specialized and IP-focused curriculum.
23. IPD informed that it will issue brochures in July 2009 that provide information concerning trademarks, copyright, patent and utility models for the general public.
Date: June 2009
Source: Intellectual Property Division, Ministry of Economic Affairs of Bhutan
 Source: Bhutan Ministry of Foreign Affairs website - http://www.mfa.gov.bt/foreign-policy/bilateral-relations.
 IP agents are those authorized by IPD to make representations on behalf of applicants for IP licenses or registration titles.