In China, companies that need short-term liquidity to secure business during and after Covid-19 can easily secure a loan by pledging their intellectual property. Although this method is not new, it is gaining in importance in the crisis. According to the Chinese National Intellectual Property Administration, the total amount of financing through patent and trademark liens in 2019 has reached the value of about RMB 151 billion, an increase of almost 24% over the previous year.
Emphasis is placed on the pharmaceutical sector. In February 2020, the Market Surveillance Authority, the Medicines Agency and the Intellectual Property Authority jointly published new rules to support the resumption of work and production after the epidemic. The aim is to make more credit available in the short term to small and medium-sized pharmaceutical companies through the pledging of trademarks and patents so that they can get back on their feet quickly.
One example is the Arahelio Group, a supplier of non-invasive breathing apparatus, which received a loan of 5 million RMB through the patent pledge. The registration time for the patent pledge has been greatly reduced and the China Construction Bank in Guangzhou has completed the approval of a 30 million RMB loan to a local biomedical company within one day. In China, Covid-19 has accelerated the development of a systematized intellectual property financial services sector that encourages Chinese companies to strengthen scientific and technological research and development and improve their innovation capacity.
For more details on financing pharmaceutical companies through the pledging of intellectual property, please join our webinar on June 4, 2020 at 10:00 am CET. To register, please click here.