Court May Determine Punitive Damages Base Based on Industry Profit Margin Under Evidence Obstruction

WISECODE Take

Many business owners mistakenly believe that withholding sales records during trademark litigation can prevent courts from calculating damages. In military terms, this is like burning one's own fields but exposing the defense line; in the case between Gu-mou Company and Yu-mou Toy Factory, the Fujian High Court applied a 58.9% industry average profit margin due to the defendant's 'evidence obstruction,' upholding a 5 million RMB triple punitive damages award. Passive defense only surrenders tactical initiative to the opponent. We advise, first, maintaining compliant financial records, and second, actively presenting reasonable damage assessments rather than ignoring court orders. Concealment only leads to defeat, and proactive defense is key; we suggest consulting and evaluating Zhidian's trademark monitoring services.