The dispute itself isn’t unique: three scientists are accused of stealing trade secrets after they left a research institute for positions in industry. But this dispute is taking place in China, where the outcome may have an important impact on the future of entrepreneurship in a state-controlled economy. The China Research Institute for Printing Science and Technology has accused three senior researchers of taking with them their work on advanced typesetting software when they accepted jobs with a Chinese firm, Stone Corp., in 1986. A four-year-old collective company located near 150 other technology firms in China’s “Silicon Valley” northwest of Beijing, Stone exports sophisticated printer equipment and has been extolled by the official media as a model of nonstate enterprise. China’s Intermediate People’s Court, asked to rule on the institute’s complaint, could find itself in a lose-lose situation. Observers say that a decision in favor of Stone would tempt scientists...

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