Martin Shkreli Must Face Lawsuit Over Wu-Tang Album, Judge Rules
A judge says Wu-Tang's legendary Once Upon a Time in Shaolin could qualify as a federal "trade secret" – and that the infamous Pharm Bro potentially broke the law.
Martin Shkreli must face a lawsuit over Wu-Tang Clan’s one-of-a-kind album Once Upon a Time in Shaolin, after a federal judge refused to dismiss a case over “the most expensive musical work ever sold.”
In a ruling Thursday, Judge Pamela K. Chen ruled that Shkreli had potentially violated federal protections for trade secrets by retaining copies of the ultra-rare rap album after he forfeited it to prosecutors as restitution after he was convicted of securities fraud.
The ruling went in favor of PleasrDAO, a group that bought Once Upon at auction from prosecutors and has been trying to monetize it over the past two years. Pleasr sued Shkreli last year after he threatened to leak copies on the internet.
Related
Much of the ruling turned on a novel legal question: Whether a music album could qualify as a “trade secret,” which more often applies to proprietary information guarded by companies against competitors. After much legal wrangling, Judge Chen said that Once Upon could indeed fit under that law.
“The secret and exclusive nature of the album is a large part of its intrinsic value,” the judge wrote Thursday. “There can be no serious debate that the value of the album … was largely based on its secret and exclusive nature.”
But she also acknowledged that the circumstances surrounding Once Upon – a legendary, one-of-a-kind album bound by an 88-year secrecy clause that was later seized and resold by federal agents – created a truly strange set of facts for a federal judge to analyze.
“Though the court agrees with plaintiff … it cannot be understated that the application of trade secret doctrine to the unique facts of this case is unchartered territory,” she wrote.
Wu-Tang’s fabled album was recorded in secret and published just once, on a CD secured in an engraved nickel and silver box. In addition to the bizarre trappings, it came with strict legal stipulations — namely, that the one-of-a-kind album could not be released to the general public until 2103.
In 2015, the album was purchased for $2 million by Shkreli — soon to become the infamous “Pharma Bro” who who intentionally spiked the price of crucial AIDS medications. But after he was convicted of securities fraud in 2017, he forfeited it to prosecutors to help pay a huge restitution sentence.
PleasrDAO, a collective of early NFT collectors and digital artists, then bought Once Upon from the government in 2021 for $4 million, and in 2024 acquired the copyrights and other rights for another $750,000. The group has been playing it at private events and has sold extremely limited access.
Pleasr sued Shkreli in June 2024 after he made threats to release the album publicly, claiming it would destroy the exclusivity that the company had purchased. The lawsuit accused him of both breaching the federal forfeiture order and violating federal trade secrets law, which protects valuable proprietary information from misappropriation.
In Thursday’s decision, Judge Chen rejected that first claim – ruling that a private company had no standing to enforce an agreement that Shkreli had struck with federal prosecutors. But she ruled that Pleasr could move ahead with the trade secrets claim, as well as another claim seeking the return of property.
In a statement Friday, Pleasr’s attorney Stephen Cooper said: “The Judge wrote a thorough and well-considered decision and we are pleased that we will be able to fully and aggressively proceed with our case against Mr. Shkreli.” Shkreli’s attorney did not return a request for comment.
Despite Pleasr’s best efforts at secrecy, copies of Once Upon might already been floating around the internet. Last year, Shkreli said in court filings that he had turned over all copies that he could find, but that he also didn’t know exactly who he had shared it with.
“Because I shared the musical work several times several years ago, I cannot recall each and every time that I have shared the musical work,” he told the judge. “It is possible, and indeed I find it highly likely, that one of the many people who viewed, heard, or otherwise accessed the musical work via my social media recorded the musical work and retains a copy of the same.”
What's Your Reaction?
