Here's an interesting case. It seems Virgin Mobile in Australia used a photo from Flickr in their adverts. The photographer had posted the photo with a creative commons license. But the family of the girl, Alison Chang, in the photo are suing Virgin for causing her grief and humiliation.
"The picture of 16-year-old Chang flashing a peace sign was taken at an April church car wash by Alison's youth counselor, who posted it that day on his Flickr page, according to Alison's brother, Damon. In the ad, Virgin Mobile printed one of its campaign slogans, "Dump your pen friend," over Alison's picture.
The ad also says "Free text virgin to virgin" at the bottom.
The experience damaged Alison's reputation and exposed her to ridicule from her peers and scrutiny from people who can now Google her, the family charged in the lawsuit."
The case raise some quite tricky questions about intellectual property, attribution, damage to reputation and privacy. I suspect it is one of those that will be settled out of court but worth watching.