China boosts judicial shield for innovators

Innovators from China's private sector will benefit from stronger judicial protection, especially those working in new technologies and emerging businesses, under a guideline issued on Friday by the country's top court.

Reiterating the private sector's important role in the Chinese socialist market economy, the Supreme People's Court released a 25-article guideline requiring courts nationwide to focus more on intellectual property cases involving high-tech fields and to strengthen legal protection for key areas and core technological innovations.

The guideline also encourages judges to use punitive damages in IP cases to effectively combat violators and provide incentives for innovators.

Additionally, it allows courts across the country to foster the healthy development of the artificial intelligence industry, and conduct more research on safeguarding data rights while facilitating efficient data circulation.

The court said the guideline aims to ensure the accurate implementation of the Private Sector Promotion Law, which took effect on May 20. It is the country's first fundamental law in this regard, marking a milestone in bolstering private sector development and boosting entrepreneurs' confidence.

"Ensuring the equal protection of the legitimate rights and interests of private entities and their operators through adjudication is better to promote the sustainable, healthy and high-quality growth of the private economy," the court said.

While optimizing the rule of law environment for the private sector, the guideline also emphasizes the need to strengthen internal management within private enterprises.

For example, Chinese courts are mandated to tackle corruption within private companies with the same rigor as graft within state-owned enterprises. Judges are also tasked with providing stronger legal education and training for entrepreneurs to deter offenses such as bid rigging.

In shareholder disputes at private companies, courts at each level should patiently explain the laws and actively steer the parties toward a substantive resolution of business standstills through measures such as equity transfers, share repurchases, capital reductions and divisions. The goal is to prevent disruptions in corporate governance that could impede production and operations.

Before releasing the guideline, the top court disclosed several concluded cases to show judicial efforts to protect the legitimate rights of private firms and regulate the sector's development.

Earlier this month, it highlighted the successful mediation of several disputes involving three technological researchers, saying that resolving their problems at one time allowed them to focus on innovation rather than litigation.

It also mentioned a contract dispute between a company in Zhejiang province and a Spanish firm to show how Chinese courts have provided legal aid for domestic enterprises going global in line with the law.

The guideline also calls for the timely disclosure of such cases to help regulate private enterprise activities.