Really? I would have thought it is fair use, but I guess no Machinima producers have true tested the law in this regard? Certainly Blizzard attempts to control the use through the TOU and restrict derivative content to non-commercial use only.
But it's not Machinima... it's just a broadcast of their product being used exactly as it is intended. Wouldn't that be like a baseball bat manufacturer telling someone to take videos of their Little League game off of YouTube?
In the USA, fair use legal precedent has mostly been superseded by laws such as the DMCA. I don't agree with it, but that's the legal situation we're in these days.
