I recently got an app for my iOS device called "123D Design." It is a 3D model editor. Upon creation of an account, the application tell you that "your models may not be used commercially."
What exactly does this mean? If I were to create a 3D game and sell it, does this mean I cannot use any models made with that app in my game?
This seems quite ridiculous if it's true. Can companies do that?
Generally Yes, here No. The key reason is simple: you're told upon creation of an account. That's too late.
There's a large degree of contractual freedom in most of the Western World. Selling a product X under terms that disallow its use for goal Y is not an unreasonable limitation or in violation of any law.
However, contracts have fixed terms that generally cannot be modified unilaterally, especially when that would impact the reason for one of that parties to enter that contract in the first place.
I've checked the public Autodesk Terms of Service, and they do not appear to have such a limitation on commercial use of 123Design.
...refers to an activity or entity that does not in some sense involve commerce.
Selling the game involves commerce. Yes, companies are allowed to do that, the details of that aren't on topic here. You may want to look into a paid version of the software, which likely doesn't have the same restrictions. Alternatively, use a different tool that doesn't have those restrictions.
This is a very tricky question that heavily depends on jurisdiction and the specific circumstances.
As a general rule, the content you create belongs to you, and you can do whatever you want with it, no matter what tools you used to create it. Also, as a general rule, claims made by others are just empty words unless it's a law or a contract that you agree to.
This is probably the key question - do you have a valid contract with the toolmaker, where you give away those rights? "the application tell you ..." is not specific enough. I can make an application that tells you that you owe me $1000, and that doesn't mean anything. For example, if you go to the store and buy a paintbrush and afterwards see that it has a label on it "Paintings made with this brush may not be sold commercially", then again it doesn't mean anything.
However, if there is an EULA where the contract or T&C is shown to you before using the application, and you need to agree to it before using it - then it's complicated. It may be a valid contract, or it may be empty words, depending on where you live and the exact details of how it's done. In some locations, any terms shown to you after the purchase is made are null and void, but not in all of them - so you may need legal advice from a local lawyer.
Another specific rule that might apply - if the content you create includes content owned by others, then this is derived work and you require permission to distribute it - this applies to all kinds of game content where you use pre-made sprites/sounds/whatever in your game; or if you make a 3d model that includes parts of other models or ready-made templates, then it also may require that permission to distribute your creation - but it doesn't apply if you create a model 'from scrath' simply by using the tool; if you use a complex tool but the 'creativity' is 100% yours then copyright law doesn't require any permission from the toolmaker unless you have a binding contract where you agree not to do X.
your models may not be used commercially.
I think they key word here is "models", i.e. they don't want you to sell the models you create. So I don't think it should be any problem creating a game using the models.
But I do think such a restriction is pretty far fetched, and I have my doubts to whether or not they are legally valid. But I have no qualification to give such legal advice.
