Calculating Trade Secret Damages in Chinese Courts
Chinese courts calculate trade secret damages through actual losses, infringer profits, or license multiples, applying apportionment and punitive multipliers up to five times base losses.
Evidence Production Order
Meaning
A procedural directive issued by Chinese civil courts compels a litigating party to surrender specific accounting ledgers or operational records held within its exclusive custody. Judges issue an evidence production order when a rights holder demonstrates that essential proof regarding infringement scale or damages calculation lies beyond its legal reach. The target entity must produce the designated records within a strict judicial timeframe or face statutory procedural consequences.
This order bridges evidentiary imbalances between foreign IP owners and domestic manufacturers.
Application Threshold
Moving parties must satisfy specific threshold requirements before courts grant formal production directives. Applicants present initial evidence establishing a prima facie case of underlying liability alongside concrete proof that the requested records exist. Precision in identifying requested documents prevents fishing expeditions into confidential corporate archives.
Court filings must specify account ledgers, tax declarations, custom shipping manifests or ERP database exports rather than broad categories of internal communications. Judges verify that the applicant made reasonable independent efforts to obtain records before seeking judicial intervention.
Compliance Mechanism
Surrender of ordered documentation occurs under court supervision with protective measures for trade secrets. Target parties submit raw financial ledgers, tax filings or technical specifications directly to the judicial panel or designated appraisal team. Redaction of sensitive commercial details unrelated to the litigation scope is permitted upon judicial approval.
Mandatory confidentiality undertakings signed by legal counsel prevent corporate disclosures to external market competitors.
Sanction Consequence
Refusal to obey judicial directives without legitimate grounds activates negative evidentiary presumptions against the non-compliant entity. Courts adopt the moving party’s damages calculations or production volume assertions as established legal fact under statutory adverse inference rules. Direct monetary fines apply to non-compliant corporate officers and legal representatives under civil procedure regulations.
Repeated obstruction of judicial collection procedures leads to administrative detention or criminal investigation for obstructing justice.