[SME Technology Theft Trap] ④ [Exclusive] Policies Ineffective... Only 2.7% Utilization Rate for 'Damage Assessment Support Program'

<4> Policies Remain Ineffective... Only 2.7% Utilization of the Damage Assessment Support Program
Annual Budget for Damage Assessment Support Program: 360 Million Won
Average Cost per Case: 30 Million Won, Few Beneficiary Companies
Legal Support

Editor's NoteThe battles that small and medium-sized enterprises (SMEs) wage against large corporations after having their technology stolen leave only scars, regardless of the outcome. Not only is it difficult to pass through the narrow gate of winning a lawsuit, but even those who barely succeed often face such meager compensation that they are forced to shut down their businesses. This has given rise to an unspoken rule: "If your technology is stolen, it's better to do nothing and chalk it up to bad luck." No matter how hard they fight, it is difficult to win, and even a victory feels like a loss. About 300 such cases occur each year. The Asia Business Daily is publishing a five-part series examining the current state and causes of technology theft that drives SMEs to the brink of collapse, and exploring possible solutions.

The disadvantages SMEs face in technology misappropriation disputes can be summed up as "lengthy litigation periods, lack of legal knowledge, and low compensation amounts." Relevant ministries and agencies, such as the Ministry of SMEs and Startups and the Korea Commission for Corporate Partnership, are operating various support programs to alleviate these challenges. Nevertheless, there are criticisms that these government support programs are not being fully utilized due to insufficient publicity and budgetary constraints.

Lack of Budget and Low Awareness: "Limited Effectiveness"

According to the Korea Commission for Corporate Partnership, only eight cases utilized the "SME Technology Infringement Damage Assessment Support System" last year. Given that there were approximately 299 cases of technology infringement during the same period, the utilization rate stands at just 2.7%. This year, the number of cases rose slightly to 14, but remains low.

The SME Technology Infringement Damage Assessment Support System is a program overseen by the Ministry of SMEs and Startups and operated by Korea Technology Finance Corporation and the Korea Commission for Corporate Partnership. It is designed to help SMEs that are unable to properly prove the value of their technology and thus receive insufficient compensation for damages. Through this system, the government provides professional institutions to assess the value of the technology and calculate the damages. After a pilot run in 2023, the program has been officially operating since last year.

However, with an annual budget of only 360 million won, very few companies benefit from the program. According to a project official, the assessment cost varies depending on the subject and method of calculation, but it averages around 30 million won per case. This means that, in simple terms, the program can support a maximum of about 12 cases per year. A representative from the Korea Commission for Corporate Partnership stated, "Since the program is still new, awareness is low and the budget is not large," adding, "We plan to strengthen publicity so that more companies can utilize it in the future."

Other programs also face criticism for their lack of effectiveness on the ground due to insufficient publicity and budgetary issues. The "SME Technology Protection Legal Support Group" matches legal experts one-on-one with SMEs that do not have their own legal teams. The core of the program is to provide consulting for the prevention of technology theft, guidance on litigation strategies, and support in preparing legal responses. However, the support period is limited to a maximum of three months (up to 60 hours), which is seen as lacking continuity, given that it can take several months to a year just to establish a litigation strategy in technology misappropriation disputes.

Johanin Yulseven, CEO, who used this program in 2023 due to a technology misappropriation dispute with a partner company, said, "During the three months I used the program, I received help preparing documents needed for the lawsuit, such as the complaint. However, when the period ended, I had to turn to the Public Patent Attorney Center for assistance with the statement of opinion," adding, "It was difficult because I could not receive continuous support throughout both the first and second trials."

Johanin Yulseven, CEO, is demonstrating the company's flagship product, 'Rolling Puff.' In 2023, CEO Jo discovered that the partner manufacturer had copied the design drawings he sent for production and released a similar product, leading to the start of a legal dispute. Photo by Seohee Lee

The "SME Technology Dispute Mediation and Arbitration Committee," which aims to facilitate the prompt resolution of disputes before litigation, is also in operation. However, there are opinions that it falls short of achieving amicable settlements between the parties. According to an analysis by the office of Assemblyman Seo Iljun of the People Power Party, which reviewed 233 cases handled by the committee over the past ten years (2015-2025), more than half ended with "mediation failure or withdrawal of claim (51.5%)" without even preparing a mediation proposal. This indicates that either the conflict between the parties was too severe, or one party completely refused to participate in the mediation process.

Attorney Park Heekyung of the Gyeongcheong Foundation stated, "The committee's panel of experts needs to devote sufficient time to reviewing cases and must be able to present mediation proposals that are convincing to both parties, based on a deep understanding of specialized technologies such as IT and chemistry." She added, "The pool of experts in each field should be expanded and their expertise further strengthened." One SME representative commented, "Consideration should be given to providing litigation cost support not only to the applicant company but also to the opposing company, in order to encourage both sides to participate in the mediation process."

Fluctuating, but the Budget Remains Stagnant

Ultimately, the issue requires sufficient budget and manpower, but the budget for technology misappropriation at the Ministry of SMEs and Startups, the main responsible agency, has remained largely unchanged. According to data obtained by the office of Assemblyman Kim Won of the Democratic Party from the ministry, the budget for preventing and responding to technology leaks decreased from 10.2 billion won in 2023 to 9.6 billion won in 2024, then increased again to 10.6 billion won this year. Considering that the ministry's overall budget increased by 12.6% over the same period, from 13.5 trillion won to 15.2 trillion won, the allocation for technology misappropriation remains low.

A representative from the SME sector commented, "Given the rapidly increasing number of damage cases, there is still a shortage of budget and personnel," adding, "Currently, there are too many policy programs related to technology misappropriation, and they are fragmented. We should consider integrating these programs so that affected companies can receive more continuous support."