Here is a good example:
There was once a company called CoreCodec who had designed the fastest
H.264 decoder. They opened some of the code if I recall correctly. Then they stopped and closed sourced it.
The open source folks used their designs to incorporate some of the techniques and to gather ideas as to how it was done. The Open Source folks progressive efforts eventually paid off (through hard work) and eventually designed better decoders with higher efficiency.
That lead to widespread adoption of H.264 which until then was very near impossible to play on a normal PC without serious stuttering in the picture and playback. That spawned off dedicated "encoders" who worked with the pirates to rip thousands and thousands of movies into a highly compressed and efficient formats using the [open source] H.264 encoders and decoders.
That spawned alot of the big companies use of Online Video.
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The Closed Source company tried to sue the open source people a few times under the allegations of stealing IP. The Open Source folks laughed at them (some of the time) because they found out through reverse engineering of the software that they cut many corners to achieve their incredible performance. (Lots of allegations abound)
The closed source company CoreCodec eventually went on to sell their codec software and (I think) they were sufficiently successful. But what did they find when they went CES? (You know, where BFL is demoing non-existent ASICs)
They found that quite a few demo'ing companies in the other booths were using derivatives of their software. How did they know this? They figured it out because they put in easter eggs in their own software. While playing with the demonstration software, several companies were found to be using their IP....without payment...at CES.
They first asked and later persued some of them for misappropriation of their IP.
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Big or small, corporate or individual, some people do not honor IP. It's not a Chinese issue. It is all over the world.
Last I recall the Chinese Government was working pretty hard to crack down on IP violations and piracy in their hopeful admittance to the WTO (World Trade Organization) and becoming a member of something...which I do not recall what it was anymore.
Edit: Forgot what the WTO was called. It's been years!
http://en.wikipedia.org/wiki/WTO