Pablo Star Ltd. v. The Welsh Government

In infringement suit involving photographs of Welsh poet Dylan Thomas, Second Circuit affirms denial of Welsh government’s motion to dismiss on sovereign immunity grounds after finding government’s use of photographs in tourism ads is commercial activity, because immunity does not extend to commercial activities carried out in United States.

Pablo Star Ltd. sued the Welsh government for copyright infringement arising from the government’s use of two photographs of the Welsh poet Dylan Thomas. Pablo Star alleged it owned the copyrights to the photographs of Thomas titled “Just Married” and “Penard” and that the Welsh government infringed upon its copyright by using the two photographs. The allegedly infringing materials included a brochure and map titled “Dylan Thomas Walking Tour of Greenwich Village, New York,” a collaboration between the Welsh government and the Thomas family  run by New York Fun Tours that charged $25 per ticket for the tour. The Welsh government also had a page on its website titled “Discovering the Welsh in America,” with a link to a PDF copy of a booklet called “Welsh in America 2010,” information about an exhibition that could be borrowed from the Welsh government in New York at no cost and a link to New York Fun Tours’ webpage regarding its Thomas walking tours. The Welsh government also provided copies of the Thomas photographs to U.S. media companies for use in articles about Dylan Thomas that promoted tourism to Wales. This all was part of a strategy by the Welsh government to attract tourism from multiple countries, including the United States. 

The Welsh government moved to dismiss this action under the Foreign Sovereign Immunities Act’s (FSIA) sovereign immunity provision, which the district court denied. The district court found that the allegedly infringing activities of the Welsh government fell under an exception to FSIA. The Welsh government appealed, and the Second Circuit affirmed the denial.

FSIA provides immunity to a foreign state from the jurisdiction of the courts of the United States subject to several enumerated exceptions, including the commercial activity exception. The commercial activity exception excepts from immunity any action that is based on commercial activity carried out in the United States by the foreign state. “Commercial activity” is defined as either a regular course of commercial conduct or a particular commercial transaction or act. Whether an activity is deemed “commercial” under FSIA depends on its “nature” rather than its “purpose,” where “purpose” is the reason why the foreign state engages in the activity and “nature” is the outward form of the conduct that the foreign state performs or agrees to perform. Moreover, the commercial activity must have “substantial contact” with the United States. The Welsh government argued that its activities were not commercial and were not carried out in the United States.

The Welsh government argued that it was not engaging in commercial activity by promoting its culture and tourism but rather acting as a sovereign state, because Welsh law mandated the promotion of tourism and because this promotion is an inherently governmental function, since it historically has been governments that perform these actions. The Second Circuit disagreed, reasoning that while the purpose of creating the materials may have been to serve a governmental function, the nature of creating the brochure and website resembled commercial activity. The allegedly infringing actions that the Welsh government engaged in—the publication and reproduction of advertising materials—were actions also performed by those in the travel industry and therefore commercial in nature. 

Because under FSIA, commercial activity is deemed to have been carried out in the United States if it had substantial contact with the United States, the Second Circuit rejected the Welsh government’s argument that because all relevant activity took place in Wales or the United Kingdom, the activities were not carried out in the United States. Rather, the Second Circuit found that there was substantial contact—the Welsh government’s conduct reached beyond the confines of its national and consular borders, including through the distribution of the photographs to American media companies and collaboration on a brochure and map that used the photographs for a walking tour of New York. 

Because the Welsh government’s conduct was commercial in nature and occurred in the United States, the Second Circuit affirmed the district court’s denial of the Welsh government’s motion to dismiss.

Summary prepared by Linna Chen and Michael Segal