Recently, Chinese drink maker Shanghai Yanzhong Beverage Co., Ltd. (“Yanzhong Beverage”) obtained a "Trademark Pledge Registration Certificate" issued by the China National Intellectual Property Administration (CNIPA). Yanzhong Beverage is eligible for a credit limit of 980 million yuan with the Bank of Shanghai with its “Yanzhong” trademark valuated and pledged as collateral and has been granted a 50 million yuan loan by the bank. This deal is unprecedented in terms of credit limit and loan size concerning intellectual property financing in Shanghai, let alone trademark financing.

This is a successful case brokered by the Baoshan District Intellectual Property Administration, also known as the Baoshan District Administration for Market Regulation. Baoshan District is a suburban district of Shanghai city. The Administration has been intent on providing financial services based on intellectual property for Baoshan-based enterprises these years.

Yanzhong Beverage was founded in 1997, specializing in the development, production and marketing of drinking water and beverages. Its products have been quite popular in Shanghai for years. The "Yanzhong" trademark owned by the company has become a household brand. An investigation conducted by the Baoshan District Intellectual Property Administration resulted in a proposal to pledge the trademark to gain access to credit.

The Administration brought Yanzhong Beverage and the Bank of Shanghai together and commissioned an institution to evaluate the "Yanzhong" trademark. The deal between the two parties was finally concluded. Zhang Lingfeng, General Manager of Yanzhong Beverage, said: "Intellectual property financing improves financing efficiency and reduces financing costs. It is very valuable for development-oriented technology companies."

The Baoshan District Intellectual Property Administration is aiming at replicating the experience gained through the deal in cases involving more local SMEs. So far, 11 companies have expressed categorical needs for intellectual financing and financial institutions such as the Bank of China, China Minsheng Bank, and the Bank of Shanghai have been listed as pilot financial institutions.