On Feb 24, the first working day after the Spring Festival, Yashu Information Technology (Shanghai) Co received a 10-million-yuan ($1.45 million) loan secured by its trade secrets, marking Shanghai's first completed trade secret pledge financing case.

The company became the first in Shanghai's internet security service sector to obtain financing by pledging trade secrets, opening a new channel for intellectual property-based lending for innovation-driven growth.

Trade secrets are technical or business information that is unknown to the public, commercially valuable, and protected by confidentiality measures. Yashu's key assets include algorithm models, security architecture designs, system engineering methodologies, and data capabilities accumulated over years of operation.

Previously, such assets were difficult to use as collateral. Since intangible property was difficult to transfer or control, valuing and confirming rights posed challenges for regulators and banks.

In Shanghai's Xuhui district, authorities leveraged China's Civil Code and Anti-Unfair Competition Law, and registered certain trade secrets as data product IP under Shanghai's interim measures, confirming rights without disclosing confidential content.

Following regulatory guidance, the Shanghai Xuhui Sub-branch of the Agricultural Bank of China partnered with the National Platform (Shanghai) for International Service of Intellectual Property Operation to carry out the valuation and issue the 10-million-yuan revolving loan.

Yashu plans to invest roughly 20 percent of its annual revenue in research and development, using the funds to upgrade algorithms, advance product engineering, optimize platform architecture, and recruit high-level technical talent, helping in reinforcing Shanghai's innovation ecosystem.

Source: Shanghai Intellectual Property Administration