As someone that actually has experience with copyright law (I have a copyright lawyer because my images are regularly stolen online) I can tell you a few things.
1. Just deal with it. It is now 2016 and if your put your images online and they're worth taking, they will be taken. It's just a fact of life. If you don't want your images used without your permission then your only options are to watermark them to oblivion or tell search engines not to index your images. We make custom products and take great pictures of all of them. Yet still, every competitor of ours including hundreds of Chinese manufactures on Alibaba and similar websites blatantly use our images. Some don't even bother to edit out our watermark. Some will email us trying to sell us products and attach our own stolen images. It's just the name of the game now and you have to pick your battles.
2. Even when someone blatantly steals your copyrighted work and passes it off as their own, you're still essentially screwed. Many people are under the impression that if I'm a photographer and someone steals an image from my site and passes it off as his own somewhere else, like his blog, then I can just make a few calls to the copyright office and let them know of his infraction and poof, he owes me thousand of dollars. It just doesn't work that way.
The cold hard fact of the matter is it's going to cost you way more to to enforce your copyright than you can ever recoup in court.
-First, you'd have to send them a cease and desist letter. You can do this yourself but it's much more effective from a lawyer. Assuming your lawyer won't immediately slap you with a $5000 retainer for the letter alone, it will cost you anywhere from $500-$1000 just for them to write and mail a letter. Still worth the trouble? If so, continue.
-After they ignore your cease and desist, you'll have to sue them. Now you definitely need a lawyer and you'll probably be in for a $5000 retainer right off the bat. Still worth it?
-You've reached the courts, lawyer at your side. Now, you need to prove damages. You must show that the theft of this image has somehow hurt your business and has caused a loss in revenue that you otherwise would have had if the image had not been taken. In this case, the guy using the image on his blog, that is not possible. Mainly because your business hasn't been damaged in any way and you could never prove that it has. Even in the case of the topic of this thread you simply could not prove that because this guy used his image without permission or payment, that Michael's businesses irreparably suffered. Even if the judge decided in your favor (which he wouldn't explained below) the most he would get is the rate at which he sells his images for. Now that he's $5,000-$10,000 to his lawyer, recouping $2000 hardly seems worth it.
This is the case with the vast majority of copyright theft now days. It's simply not worth enforcing because the lawyers and court costs are beyond extreme it's almost never worth it unless your a deep pocketed corporation with lawyers waiting to sue people for the smallest infractions. Besides, is most cases a well written cease and desist solves the problems. I've had my lawyer write 7 in the last 5 years. Every time the person has complied instantly even though I would never pursue legal action because it'd be a massive waste of time anyways. In reality, filing DMCA complaints with Google, Bing, Yahoo, Wordpress, Godaddy or whatever host the website uses, and having their content either removed from search engines or removed from the host's servers, is a far more effective strategy than lawsuits.
3. This wrap fails squarely inside fair use and transformative.
-He's not selling the actual artwork. He's selling the wrap and merely made the graphic for his client which is much different than him selling 1000 copies of this image on tshirts.
-He transformed the orignal image and completely changed it's meaning and purpose.
-He added additional value to the artwork
-The original image only takes up a fraction of the entire graphic.
All of those things combined without a doubt put his new artwork inside the transformative category. If you're still not convined, try searching for the "artist" Richard Prince. Or, go here:
http://www.theverge.com/2015/5/30/8691257/richard-prince-instagram-photos-copyright-law-fair-use
I don't condone theft of original work. Especially since my company is the victim of it every day. However, to me what this guy did is hardly a crime worth such public shaming and people should really take the time to learn a thing or two about copyright laws before they scold someone else for something they know absolutely nothing about.