A copyright infringement case against the Welsh Government over the use of Dylan Thomas pictures will proceed to trial in New York.
A company claiming to own the American copyrights to two photographs of poet Dylan Thomas sued the Welsh Government back in 2015.
Pablo Star Ltd claims the Welsh Government used the images of the Swansea-born poet in American tourism advertisements without permission.
Earlier this week, the US Court of Appeals for the Second Circuit allowed the case to proceed to trial after finding that the use of the rare photographs was not protected by sovereign immunity.
Pablo Star Ltd claims to own the American copyrights to the two photos of Thomas and his wife Caitlin, which were taken by their friend Vernon Watkins some time after their wedding in Cornwall in 1937.
The lawsuit says the photograph appeared on the Visit Wales tourism site in 2012 and was later used in advertising and marketing material aimed at the American market.
It alleges: "Beginning in 2014, the Welsh Government began using unauthorised copies of plaintiff’s photograph in advertisements, promotion, brochures, and other tourism related materials, including materials directed specifically at residents of New York and intended to lure American tourists to Wales".
On Monday, a panel of three judges upheld a district judge's ruling that the marketing campaign fell within the "commercial activity" exception to the Foreign Sovereign Immunities Act.
The panel held that while the Welsh Government's actions advanced the "legitimate" sovereign purpose of enhancing the country's image, it did so in a way that was common to any number of private-sector businesses seeking profit from advertising.
Pablo Star Ltd is seeking lost licensing fees and damages from the use of the two photos.
Wales moved to dismiss the case on the grounds that the commercial activity exception to the Foreign Sovereign Immunities Act did not apply as its marketing strategy was an "inherently governmental" function.
A Welsh Government spokesperson said: "We are disappointed with the outcome in the US Court of Appeals but we continue to defend the Welsh Government's position."
