Yanzhong Beverage cuts IP financing deal over trademark

A Shanghai-based beverage company has recently pledged its trademark "Yanzhong" for a loan of about 50 million yuan (US$7.74 million), the Shanghai Intellectual Property Administration said.

The value of the trademark is estimated to be worth nearly 1 billion yuan, and it is the first time that a company mortgaged its intellectual property rights for such a large amount of money.

Obtaining loan funds by pledging intellectual property rights to financial institutions is the most typical way. This not only improves the financing efficiency of enterprises, but also reduces costs.

During the release, the administration revealed a new instruction to give full play to the important role of financial capital in realizing the value of intellectual property. This will especially benefit small and medium-sized enterprises in Shanghai, said Yu Chen, deputy head of the administration.

The instruction consists of 16 specific measures focusing on four main aspects, including improving the process of IP financing, promoting the improvement of IP financial service levels, increasing the intensity of IP financial publicity and training, and strengthening the work guarantee of IP financial services.

Shanghai launched a pilot program for IP pledge financing in 2006 and was one of the first regions in the country to implement it.

Sixteen banks in the city have launched IP pledge programs up to August with total loans worth 730 million yuan.

The types of IP that can be pledged include patents, utility model patents, trademarks, drug certificates and copyrights, according to the administration.