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From Intellectual Property Law Daily, April 1, 2019

Owners of Dylan Thomas photos overcome Welsh Government’s sovereign immunity defense

By Pamela C. Maloney, J.D.

The commercial activity exception to the Foreign Sovereign Immunity Act applied to copyright infringement claims brought against the Welsh Government for its use of two photos of Dylan Thomas in a tourism promotion campaign that was directed toward the United States in general and New York residents in particular.

The federal district court in New York City has determined that media companies claiming ownership in two photographs of the poet, Dylan Thomas, had provided sufficient evidence to establish that their copyright infringement claims based on the Welsh Government’s unauthorized use of those photos qualified for the commercial activity exception to the Foreign Sovereign Immunity Act. Therefore, the district court denied the Welsh Government’s motion to dismiss those claims on the ground that it was immune from suit under the doctrine of sovereign immunity (Pablo Star Ltd. v. The Welsh Government, March 29, 2019, Oetken, J.).

Several related media companies organized and registered under the laws of Ireland and the United Kingdom claimed ownership rights to the two photographs of Dylan Thomas. They filed a copyright infringement action against the Welsh Government—a political subdivision of the United Kingdom—alleging that in order to encourage tourism and to promote Wales as a tourist destination, the government had published, displayed, and distributed copies of the photos in advertisements, publications, and other promotional materials that were specifically targeted toward the United States in general and New York residents. These materials included the Visit Wales website, as well as a downloadable map and guide depicting a "Dylan Thomas Walking Tour of Greenwich Village, New York" which included one of the photos. The complaint further alleged that the Welsh Government had provided unauthorized copies of the photos to various media companies—the Tribune Content Agency, LLC, the Pittsburgh Post-Gazette, E.W. Scripps, Co., the Journal Media Group, Inc., Treasure Coast Newspapers, the Richmond Times Dispatch, and the Miami Herald Media Co., which were reproduced and displayed on the publishers respective websites and in print publications. On March 16, 2016, the district court granted the Welsh Government’s motion to dismiss on the ground of improper service and venue. Two years later, the district court granted the copyright owners leave to file a second amended complaint against the Welsh Government and the various publishers, holding that the copyright owners had alleged sufficient infringing activity taking place in the Southern District of New York for the amended complaint to survive a motion to dismiss for improper venue. Before the court was the Welsh Government’s motion to dismiss the second amended complaint on the ground that it was immune from suit on the basis of sovereign immunity.

Sovereign immunity. After concluding that the Welsh Government had made a prima facie showing that it was a political subdivision of a foreign state within the meaning of the Foreign Sovereign Immunities Act (FSIA), the court determined that the copyright owners had provided sufficient evidence to support their contention that the FSIA’s commercial activity exception applied in this case and, therefore, that the Welsh Government was not immune from the jurisdiction of U.S. courts.

In order to satisfy the commercial activity exception, the copyright owners were required to show that (1) a commercial activity had been carried on by the foreign state; (2) there was a nexus between that activity and the basis of the claims asserted; and (3) there was a geographic connection with the United States. The essence of the copyright owners’ complaint was that the Welsh Government’s unauthorized use of the two photographs as part of its campaign to promote tourism to Wales violated the Copyright Act. The Welsh Government’s alleged acts of copying and distributing the photos qualified as commercial activities within the meaning of the FSIA in that these acts were indistinguishable from the manner in which private citizens also distributed the photos. The Welsh Government’s argument that because it did not use the photographs for profit, but instead used them to carry out its public mission to encourage economic development, culture, and tourism to Wales, which was a uniquely sovereign objective, while persuasive, was only tangential to the court’s inquiry. The question before the court was not whether the foreign government was acting with a profit motive or with the aim of fulfilling a uniquely sovereign objective but, rather, whether the actions performed by the foreign state were the type of actions engaged in by private parties. Because the copyright owner’s evidence showed that the Welsh Government’s acts of copying and distributing the photos were the same acts a private party would engage in, the court did not and must could not consider the purposes behind the alleged infringing acts.

The copyright owners also provided sufficient evidence to show that the Welsh Government’s commercial activities were carried on in New York and in the United States, and that some of the Welsh Government’s infringing materials were published in the United States by U.S. news outlets in furtherance of the Welsh Government’s attempts to promote tourism to Wales. The Welsh Government itself bolstered the copyright owners’ evidence by representing that at least some of the allegedly infringing materials were developed by the government in New York and were available for free distribution in New York. The Welsh Government also confirmed that it maintained an office in New York.

On the other hand, the Welsh Government contended that all activities related to its promotion of tourism and culture were conducted entirely from Wales and that it had never offered copies of the photos for sale nor were they distributed for profit. In addition, the Welsh Government expressly forbade its licensees from using the photos for promotion of non-tourism related, non-inward investment related or commercial products. However, these representations were immaterial to the issue of the nexus between the commercial activity and venue. According to the district court, all that mattered was where the relevant copies of the photos were made and distributed, and the Welsh Government had failed to rebut the copyright owners’ evidence that the former had played an active role in the development and distribution of the promotional materials, which included copies of the two photographs, in New York.

In addition, the evidence showed that the Welsh Government had contracted with private businesses located in New York City to publish, print, display, and distribute the allegedly infringing promotional materials, including the walking tour, which was descried as a collaboration of the Welsh Government in New York with the family of Dylan Thomas, and the Welsh in America display panels. Taken as a whole, the evidence persuasively demonstrated that the Welsh Government’s commercial activity had substantial contacts with the United States as required to qualify for the commercial activity exception to sovereign immunity.

This case is No. 1:15-cv-01167-JPO.

Attorneys: Kevin Patrick McCulloch (The McCulloch Law Firm, PLLC) for Pablo Star Ltd. and Pablo Star Media Ltd. Richard James Oparil (Porzio, Bromberg & Newman, PC) for The Welsh Government, Gracenote d/b/a Tribune Media Service and Tribune Content Agency, LLC.

Companies: Pablo Star Ltd.; Pablo Star Media Ltd.; Gracenote d/b/a Tribune Media Service; Tribune Content Agency, LLC

MainStory: TopStory Copyright NewYorkNews

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