Wu-Tang Clan produced a single physical copy of the album “Once Upon a Time in Shaolin,” which was never publicly released. In 2015, Martin Shkreli purchased the album.
Under the Original Purchase Agreement (OPA) Shkreli paid $2 million to acquire the album and 50% of copyrights. The OPA imposed stringent usage limits: Shkreli could duplicate the album “for private use” and exhibit (i.e., play) the work in limited venues such as his home, galleries, small spaces. However, Shkreli was prohibited from duplicating the album for other purposes. The OPA required that the same terms be imposed if Shkreli were to resell the album.
In 2018, following Shkreli’s conviction for securities fraud and conspiracy to commit securities fraud, US District Court for the Eastern District of New York ordered forfeiture to satisfy a $7.36 million money judgment. The order restrained Shkreli from diminishing the value or marketability of forfeited assets, which included the album. After its forfeiture, the United States sold the album to Plaintiff, PleasrDAO.
Shkreli was released from prison in May 2022. Following his release, Shkreli repeatedly stated on social media that he had retained digital copies of the album. Shkreli allegedly played the album online, sent copies to others, and threatened to torrent it. During a June 2024 social media “Spaces” session, Shkreli allegedly streamed the album to roughly 4,900 listeners.
In June 2024, PleasrDAO sued Shkreli for enforcement of the forfeiture order, and alleged, inter alia, federal statutory and New York state common law claims for misappropriation of trade secrets. Following the issuance of a temporary restraining order and preliminary injunction, which restrained Shkreli from “possessing, using, disseminating, or selling any interest in the Album,” Shkreli moved to dismiss all claims.
Case Information
PleasrDAO v. Shkreli, 1:24-cv-04126 (E.D.N.Y. September 25, 2025)
- Plaintiff: PleasrDAO — A Cayman Islands “foundation company” that “collects and publicly displays culturally significant media and materials with the intent of creating ecosystem experiences that encourage participation and interaction throughout the United States and other countries.” PleasrDAO purchased the only physical copy of Wu-Tang Clan’s album “Once Upon a Time in Shaolin,” the exclusive right to play the audio, copyrights, and exclusive exploitation rights in the recordings.
- Defendant: Martin Shkreli — Former pharmaceutical executive and prior owner of the one-of-a-kind album, who forfeited the album following his criminal conviction and forfeiture order. After release from prison, Shkreli allegedly retained and distributed digital copies of the album, despite the forfeiture and subsequent sale to PleasrDAO.
Analysis and Outcome
PleasrDAO’s trade secret claims are brought under the federal Defend Trade Secrets Act and New York common law. The claims allege that the album itself, as well as its data and files, are protectable trade secrets. The court acknowledged this unusual application of trade secrets concepts, noting “the Album’s data and files arguably fall somewhere between information used in running Plaintiff’s business and information that is its product.” Nonetheless, the court reiterated trade secrets could “include all forms and types of business information,” so long as the necessary secrecy and economic value elements are satisfied.
The court concluded that the album qualifies as a protectable trade secret. Despite Shkreli’s defense that he did not maintain secrecy of the album when it was in his lawful possession, the court accepted as true, the plaintiff’s assertion that “the Album is confidential and proprietary, and the contents of the Album’s data and file remain unknown to the public at large.” The court noted that the original OPA imposed significant restrictions on Shkreli’s ability to distribute the album. Further, the court concluded that PleasrDAO has plausibly alleged reasonable measures to maintain the secrecy of the album since becoming its owner. Specifically, PleasrDAO asserts that “at all relevant times,” it “moved the Album by secure transport and/or kept the Album in a secure location.” “The security measures undertaken included the use of armed security guards, secure entrance and exit points, and continual video surveillance, oversight and checks on the Album’s condition.”
Because PleasrDAO pleaded with facts sufficient to support the conclusion that the album qualifies as a protectable trade secret, the court denied Shkreli’s motion to dismiss as to Plaintiff’s trade secret claims.
Additional Authors: John M. Hindley and Nicole Curtis Martinez