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If Mr. Korz would do illegal activities, Palm or the respective owner of the source code would have sued them by now. Since this hasn't happened yet we can assume he is doing it the legal way.
Not necessarily. Access is a Japanese company, and their animation industry has been incredibly slow to prosecute mass copyright infringement in overseas territories. Then there's the license dispute Bernd had with Gobe. He says, they say. My take is Bernd is manipulating grey areas, which is why no proof is forthcoming.
The parallels between this situation and the high profile insurance and pension scams of the 1980's and 1990's rings too clearly in my ears. Barlow Clowes bent the law and Maxwell pulled the charisma line, and we know how that ended. Publish the contract that Bernd claims gives him "rights", and the audit trail that shows where he got the source from.
So far, this is just embrassing. No proof can only make it worse.