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It's definitely true about things being made uglier. Although - I think that has to do with inexperience. A lot of the shops that DO steal art often don't know how to properly use it. The place that I worked had a print management team placed in HK, so they knew what print bureaus to use and who to stay away from. It still can happen, though.
A sales manager actually found a game that we had designed at a retailer that we had never done business with. He contacted the buyer and found that a printer in China that had been subcontracted stole the art/design and sold it as their own. My company then filed a 1.3 million dollar lawsuit against the supplier/printer. (they won easily, because the printer forgot to remove the copyright lines...oops)
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