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.
Judicial Expertise Appraisal
Meaning
Situated within the evidentiary phase of Chinese civil and administrative litigation, a specialized technical evaluation provides independent factual findings on engineering or accounting issues. Chinese courts order judicial expertise appraisal when resolving trade secret scope, software source code similarity or financial damage calculations requiring specialized technical knowledge. Licensed appraisal institutions registered with judicial administrative authorities execute testing protocols and issue formal appraisal reports directly to the tribunal.
The resulting document forms primary technical evidence in technical property litigation.
Institutional Selection
Selection of the appraisal institution requires mutual agreement between litigating parties from an official court roster of certified technical agencies. Courts randomly select an qualified agency from administrative registries when opposing litigants fail to reach consensus within specified timeframes. Selected institutions must maintain strict independence, retaining no prior consulting arrangements or financial interests with either party.
Technical appraisers sign formal duty declarations subjecting themselves to perjury penalties for deliberate misrepresentation.
Evidentiary Weight
Appraisal reports carry significant persuasive authority in court determinations but do not bind judicial panels absolutely. Judges evaluate appraisal conclusions alongside party submissions, cross-examination findings and independent expert assistant testimony. Written reports must detail underlying testing methodologies, laboratory equipment calibrations, sample selection processes and mathematical formulas.
Technical findings lacking rigorous methodological explanation are returned for supplementary testing or rejected entirely.
Procedural Challenge
Litigants maintain the procedural right to challenge appraisal conclusions by filing written objections or requesting expert appraisers to testify at trial. Parties submit technical counter-arguments supported by private expert assistants to expose analytical flaws or improper testing parameters in the appraisal report. Courts order supplementary appraisals or select a new agency when initial reports exhibit fundamental procedural errors or contradictory scientific logic.
Cross-examination of the lead appraiser occurs during formal court sessions to verify testing validity and analytical rigour.