Forensic Profit Apportionment and Statutory Damages Caps under Revised AUCL Claims
Revised AUCL Article 17 enforcement requires isolating net technical profit contributions while leveraging judicial adverse inference to trigger maximum damages caps.
Article 31 Evidence Rules
Meaning
Judicial guidelines within the Chinese civil procedure system establish the procedural standards for the submission and verification of evidence in disputes concerning intellectual property ownership and infringement. These article 31 evidence rules mandate that a party holding relevant evidence requested by an opponent must produce it if the court finds the request justified. The provision targets the information asymmetry common in patent and trade secret litigation where data on sales volumes, production costs or technical processes reside within the internal records of the defendant.
This rule applies specifically to civil proceedings and provides a mechanism for plaintiffs to access documents they cannot obtain independently. It stops applying once the court determines that the evidence is not necessary for the determination of the case or when the request constitutes a fishing expedition for confidential trade secrets.
Document Authority
Legal standing for these procedures is derived from the Provisions of the Supreme People’s Court on Evidence in Civil Litigation as revised in recent years. The article 31 evidence rules function as binding instructions for all levels of the judiciary and integrate with the broader Civil Procedure Law of the People’s Republic of China. These instructions clarify how judges should handle applications for evidence preservation and production orders.
By setting a uniform standard across different jurisdictions, the documents ensure that foreign and domestic litigants face the same evidentiary requirements in specialized courts. The authority of these rules is absolute within the trial stage and governs the interaction between the parties during the discovery phase.
Procedural Burden
Applications for an order under this provision require the requesting party to demonstrate that they have exhausted reasonable means to acquire the information. If the plaintiff shows that the article 31 evidence rules are applicable, the judge evaluates the relevance of the specific documents and the necessity of their disclosure for the calculation of damages. The defendant must then either provide the records or submit a formal objection based on privilege or irrelevance.
If the objection is overruled, the obligation to produce is fixed. This process prevents defendants from simply denying the existence of records that are standard in commercial operations.
Sanction Limit
Penalties for refusing to follow a production order include the use of adverse inferences regarding the facts the evidence was intended to prove. When a company ignores the article 31 evidence rules, the court may accept the claims of the plaintiff regarding profits or infringement scale as true. Fines and judicial detention are also available as tools for the court to ensure compliance with its orders.
These sanctions are directed at the entity and the individual managers responsible for the withholding of data. However, the court must balance these penalties against the right of the defendant to protect unrelated business secrets. The boundary of the sanction is reached when the punishment becomes punitive rather than corrective.
A court will not typically grant a full win to a plaintiff based solely on a failure to produce evidence without some corroborating facts. The judicial discretion involved in the application of these rules ensures that the outcome remains tied to the merits of the legal dispute. This approach maintains the integrity of the judicial system while providing a fair path for owners of intellectual property to prove their losses in a controlled environment.