The Ministry of SMEs and Startups and Korean Intellectual Property Office said Tuesday they would jointly support technological development and secure the intellectual property rights of small companies to help them protect their technologies from the influence of bigger rivals.

The government will set aside 10.4 billion won ($9.6 million) this year with a plan to support around 40 technological projects, according to a joint statement released by the two organizations.

The beneficiaries will be startups or small companies that were founded in the past seven years and develop technologies related to the “fourth industrial revolution” including artificial intelligence, big data, smart sensors and smart appliances. 

Each company can be supported with up to 280 million won for their technological development and provided with consulting for intellectual property rights. The consulting will be based on big data on patents globally.

“(Through the support), a startup can acquire the diverse intellectual property rights of their ideas and technologies to prevent the risk of technology theft and patent battles,” said Kim Yong-sun, chief of the Korean Intellectual Property Office’s industry property policy division.

The government’s latest plan came amid growing claims by small companies that they are losing their technologies to large companies but have to keep silent out of fear of retaliation.

According to a survey by the government on 8,219 small firms in 2016, 644 companies of the respondents said they had experienced technology theft by large firms. The combined damages stood at 345.6 billion won on average annually, according to the survey.

Despite such damages, many of them -- whose businesses solely rely on large firms and with less financial power to fight legal battles -- were not able to report to regulators.

From 2010 to date, only around 20 companies reported technology theft issues to the antitrust watchdog.

Among the few high-profile cases of a legal battle between a conglomerate and a smaller firm is the case involving car parts firm BJC against the nation’s largest carmaker Hyundai Motors, with the former claiming its technologies had been stolen.

Hyundai won the case in January but BJC appealed to the court and also reported to the Fair Trade Commission for further investigation.

On Feb. 12, the government met with the ruling Democratic Party of Korea to discuss how to root out technology theft issues. They decided to define technology theft as crime and to require large firms to pay up to 10 times when they are found to have stolen technologies of small firms.

By Shin Ji-hye (shinjh@heraldcorp.com)