Calculating Base Damages and Multipliers in Chinese Trademark Infringement
Base damages under PRC Trademark Law Article 63 follow strict evidentiary priority, with multipliers up to five times applied for willful infringement.
Statutory Spoliation Rules
Meaning
Evidentiary rules in Chinese civil procedure penalize a party that intentionally conceals or destroys financial ledger books and operational records required for judicial damage calculations. Applying statutory spoliation rules allows trial courts to shift the burden of proof regarding profit margins directly onto the non-compliant party under Judicial Interpretation No. 2 (2020) of the Supreme People’s Court. When a factory owner refuses to submit financial records during a court audit, the judge adopts the damages estimates provided by the plaintiff.
The rule stops applying if the destruction of records resulted from proven force majeure events or neutral disaster.
Adverse Presumption
Judicial tribunals issue explicit court orders commanding domestic manufacturers to produce accounting books and inventory logs. Refusal to comply triggers statutory spoliation rules, enabling judges to accept plaintiff profit calculations without further verification. In contract manufacturing disputes, foreign rights holders present customs data or market price samples as undisputed financial baselines.
Non-compliant factory defendants lose the legal right to challenge these accepted damages figures on appeal.
Production Order
Formal court orders for document production target physical ledgers and digital ERP systems held by corporate officers. Refusing access or claiming record loss without credible evidence triggers administrative fines against corporate legal representatives alongside adverse evidentiary rulings. Court-appointed auditors document non-cooperation in formal reports, providing clear justification for full judicial adoption of plaintiff accounting claims.
Evidentiary Implication
Compelling document disclosure through adverse inferences alters trial dynamics by preventing factory owners from hiding profit margins. Manufacturing entities face severe civil monetary liability when withholding accounting records.