If someone uses the iText library in an android application for PDF without purchasing license, how will iText know he did that? Since he will not be releasing the source code how will they know he used their library? how could they take legal action against him? Again I am not planning in doing this. I was just curious.
iText contains some visible fingerprints (e.g. the producer line) as well as invisible fingerprints (which we obviously do not share).
On a regular basis, we discover PDFs that were created using iText, but that can't be linked to a paying customer. In that case, we contact the person distributing the PDF.
Example one: a large publishing house in Germany was distributing PDFs created with iText. We contacted that company in a friendly way and explained that we wanted to talk to them about their use of iText. At first, they were surprised: they didn't know they were using iText. So we showed them the PDFs and as it turned out, the company had hired an external integrator to build an application. That integrator had introduced iText without purchasing a license. The first thing that happened was funny: suddenly the producer line was removed (which is not allowed), but we could still prove that iText was used (because of the secret fingerprints). So we explained the publishing house that we didn't really appreciate that. As a result, the integrator was offered the choice: either they complied and bought a commercial license, or the publishing house would never hire them again.
Morale of this story: it is very bad for your reputation and for your business if you are revealed as being a fraud. If we go to your customer and it turns out that you fooled him, you risk losing that customer.
Example two: a medium-sized company was using iText and other open source software without worrying about the licenses. At some point of time, this company was about to be acquired. The acquiring company obviously went through a due diligence process and discovered the mess. We were contacted by the medium-sized company because they needed a commercial license ASAP... In at least one case, the company didn't get acquired because of the mess.
Morale of this story: do the right thing. If you make money using our software, it is only fair that you pay for your use of our software.
Example three: a developer at a company using iText informed us that his management deliberately chose to use iText in an illegal way. He provided us with proof, and we contacted the legal department of that company. No legal action was needed: the company purchased a license and is now a very happy customer because they are now really benefiting from the commercial relationship we have with them.
Morale of this story: in most cases, it isn't even necessary to go to court. When faced with the evidence, it is less expensive to come to an agreement then to risk losing a case (and your reputation).
These three stories have one thing in common: honor.
I have come close to going to court a couple of times, but eventually, the problem solved itself because the people involved understood that it wasn't in their interest getting sued.
Also: it is counter-productive to sue somebody into paying a license. It is much better to create a win-win situation where the company using iText benefits from their business relationship with the iText Group. Especially now that we're winning awards (such as the BelCham Award and the Fast 50 Award), good PR is very important. The more iText Group grows, the more companies realize that it's important to work with us. The more companies realize this, the more we grow ;-)
I hope this helps. I also hope this explains why I can be very harsh towards people with nick. Most of the times there's a reason why people want to remain anonymous and that reason isn't always a good one.
Update: Our site tracks usage statistics. In many cases, we can see which companies are visiting our site; in some cases, we can even track individuals. A couple of years ago, a company was denying that they were using iText, but they were visiting http://itextpdf.com 200 times a year! Confronted with those numbers, they admitted that they had lied to us. When we look at the global scale, we see that India is #2 and China is #4 in visits, but both companies have a very low ranking in sales. That's why we've now opened an office in Asia. One of our sales people is now visiting India, Malaysia, and other countries in the East to talk to companies about their use of iText.