In recent years, the State Intellectual Property Office (hereinafter SIPO) took an active attitude towards the connection between intellectual property rights and financing. It is said that a model for financing through intellectual property for emerging innovative enterprises is to be explored in order to provide strong assistance to the development of the small and medium sized enterprises. The trial has been conducted in 20 regions across the country. According to the statistics released by the SIPO, 3,361 patents had pledged with a value of 31.85 billion Renminbi yuan in the periods from January 2006 to June 2011.
The attempt was first initiated at a joint meeting between SIPO and the People’s bank in 2006. Upon common understanding for asset evaluation, risk control and credit guarantee, a trial was then started in 2008. In 2010, 6 governmental agencies including SIPO and Ministry of Finance jointed issued the Notice of Strengthening they IP assets Pledge and Asset Administration, Support the Development of Small-medium Sized Enterprises. In October of 2010, Provisions for Patent Pledge and Administration was implemented which further promote the utilization of patent and capital funding.
In June of 2011, SIPO reached a strategic alliance with the bank of communication which set out a regular mechanism between the 2 agencies. Under the alliance, SIPO assists the bank of communications to develop the financing of IP among the small-medium sized enterprises. Currently, SIPO is working with the China Banking Regulatory Commission to draft a guidance on IP Financing within the banking industry, which will provide guidance to the banking industry to develop and regulate the loan business through IP pledge.
