That's why digital pictures are such a strange animal and the laws have trouble covering them.
You can think of it this way:
Even with a watermark or copyright symbol and such on an image, it's just like an artist signing a painting. So let's say Vincent Van Gogh just signed a painting he finished. It is his creative artwork and it has his name on it. He owns the copyright to the design.
But let's imagine that someone has a magical keyboard back then and they click the artwork, press "ctrl + c", then "ctrl + v" and they make an exact (not just ALMOST exact, we're talking 100% accurate) duplicate. All of a sudden there are two exact paintings in Van Gogh's studio and Van Gogh doesn't know a copy has been made. Van Gogh still owns the design of this second one and his signature is still on the painting. The person with the magical keyboard takes the painting and leaves Van Gogh's studio, leaving Vincent not knowing anything has happened. Vincent sees an exact duplicate of his painting for sale on a street corner and gets upset. Ultimately, he still owns the copyright because this copy would be considered a stolen copy and illegal. This person with the magic keyboard just stole Van Gogh's painting and is going to lose in court. It was no different than stealing the original (theft) except he left Van Gogh unknowing that it was stolen.
But what if the person went through some trouble to remove the signature from the painting? Well, it would still be illegal, but as the painting went from owner to next owner and so on, eventually the painting will be impossible to track down, and the current owner of it will have no idea who painted it, where the artist is, or how to get in contact with him. This happens all the time on the internet. (I save hundreds of photos a year, and I have no idea where I've saved most of them from, so if the 'signature' is missing, I have no earthly idea who to give credit to. Nobody would be able to tell the image was stolen. An example of cases where images are considered stolen is when people get sued for taking pictures of cars at events where cars can't be photographed. Like at super secret stockholder events at GM's design studio. This happened with the 5th gen Camaro concept years ago, and a lot of other ones lately. These people DO get in trouble! Another example where you'll get in trouble is if there is a notice at your son or daughter's graduation that you can't take pictures. If you take pictures despite this notice, and you keep them yourself and give them away for free, or have them printed and give them away, you're fine. But if you take pictures there and then sell them, you are breaking the law.)
But in another scenario, let's imagine that Van Gogh wins the magic keyboard in court, or simply, let's imagine he already had his own magic keyboard. And Van Gogh starts making copies and giving them away to anyone who comes to his physical store (www. vincent's store for free paintings . com or whatever). And these people get his painting for free. Well, in effect, he has no legal course of action against these people, because he still owns the original... but oh wait... the original is exactly the same as what everyone else owns. Who owns the original now? They're all the effectively originals because there's no way to tell the difference between them, and they were acquired for free. How will Van Gogh prove he owns the original? Does he have a way to prove that? If he does, he might win in court, but if he has no proof (which is usually the case) he can't win anything.
But what if the people he gives the paintings away to alter the copies? What if someone paints flowers on them? What if someone cuts the painting into the shape of a circle? What if someone else changes the color of the wheat fields into something offensive like marijuana fields? Well, despite Van Gogh's displeasure with people doing this stuff, they are perfectly within their "creative use" right. Or are they? They are
likely protected by "creative use", even if they decide to sell copies of their modified paintings. However, court has certain restrictions on this (currently) and it basically comes down to... how creative were these changes? (...Can you measure creativity? How do you do this?) Was the original changed extensively enough that it is a completely new piece? (Or was it not changed enough, and therefore Van Gogh or the court has some legal recourse?) In most cases pertaining to images saved from the internet, the people who make modifications are perfectly within their right so long as their changes aren't offensive/defamitory/threatening/etc. if I remember correctly. But in most cases pertaining to things harder to copy, the piece better be pretty darn creative, or you're getting sued. If you just go out and make exact copies of Lamborghini body panels, you can't just paint them pink and say it's "creative use," you have to do something more to them like modify the shape.
Then again, back to the Van Gogh paintings story, what if someone just went to some trouble to remove the signature? And after a few weeks/months/years can't remember who made the painting they got for free? Or what if the painting didn't have the signature in the first place? Well then, that's pretty complicated (or simple, depending how you look at it). The original creator of the painting (Van Gogh) gets super angry about this person removing his signature on their copy when he finds out about it. He later finds out that this person is selling magnets made from his design (painting) which makes him even angrier!
What will the court do about it? Hard to say, because this person is skirting the "creative use" laws by removing the signature and making magnets, (or if the signature was never on there... they are just making magnets) and also, they still obtained the image legally as if it was a gift from Van Gogh. All they did was save a copy that Van Gogh was giving away for free. If they want to remove the signature from their property, it is their business. If they want to make magnets, it is there business if Van Gogh's signature isn't there. (Same thing goes for images without copyrights, watermarks, or logos). I believe in cases such as this, the most that is usually done is the request for credit. Van Gogh could request that he is credited for the image/painting, but once he gives copies of the painting away... his legal right to the paintings/images that he no longer owns at his studio/in-his-computer is completely gone (effectively). Another thing the courts can do is ask that the person who is selling these items stop. Just plain stop doing it.
Hopefully I wrote this example to make sense! I created it as I went along from my memory, so hopefully it is accurate.
This story is now (c) 2008 Brandon Brown. But oh crap, did I just give it away for free? I'm not sure...

;help