{{{{"DAZ models may not be used to create derivative, second-stage, or further stage derivative 3D models which can then be distributed in competition with the original DAZ product."}}}}

The key to this misunderstanding is actually in the above quote. It is the words "distributed in competition with the original". What this ruling means is that if I used a shrink wrap method to copy Vicki's body shape onto a new original mesh, built a face and head, made it into a posable character, and then sold it, I have actually created a product in direct competition with Vicki. She would likely be a huge success for me, because she could of course wear Vicki's clothing, and if I were creative in mapping the UV maps, maybe even use Vicki's textures. We have seen this done VERY recently in a 3rd party model.

But what does this do to DAZ? Is it fair to them? Do they have the right to say they own their own body shape, and you may not reproduce it through any means to compete with them? Of course they do. Just as I have that right in what I create that is my own original work.

However, what you all fear, that they are trying to stop folks from making clothing in support of their work is not happening. DAZ has always welcomed people creating products that enhance and support their original creations. I do not believe this stance has changed, since upon reading this it is clear they are only disallowing models that are made in competition, not as enhancement add ons.