This item comes from a loot card from the World of Warcraft TCG. It places a large flag in an enemy corpse with a thumbs down. It is awesome in PvP (oh, who am I kidding - it is awesome everywhere).
In Warlords of Draenor, this item will be added to the new Toy Box feature and no longer take up a bag slot. You will be able to "use" the item straight from the Toy Box interface. The Toy Box will be account-wide and therefore so will this item.