Blue: "US Copyright law allows for limited "fair use" of copyrighted materials. As such, not all copying is theft, and the distinction has to be made on an individual basis, not in blanket terms."
That may be, but SL is not the US.
You clearly state on the SL advertising that anything we create is ours to do whatever we wish with.
If, and only if, we release an item with full permissions, then we are allowing 'fair use' duplication.
If we relesae something free to the community, that is 'fair use'; reselling someone else's work for your own profit is not fair use.
Taking a copy of someone else's work which is no copy no mod no transfer, by the use of a third party tool, is *not* fair use under any right thinking person's interpretations.
You can't say on one hand that we retain full control over how our created content is used, then state that a clear ToS violating case of theft is not actually really theft.
Lewis