Martin Shkreli must defend himself in court over alleged trade secret violations tied to the Wu-Tang Clan’s ultra-rare album Once Upon a Time in Shaolin, after a federal judge ruled Thursday that the case can proceed despite his efforts to shut it down.
Brooklyn U.S. District Judge Pamela K. Chen sided with PleasrDAO, the digital art collective that bought the one-of-a-kind album from the U.S. government in 2021, after Shkreli forfeited it as part of his sentence for securities fraud. The group sued Shkreli last year, accusing him of threatening to leak the album online, which they say would destroy its value.
Chen allowed the lawsuit to move forward under federal trade secret law, a rare application of the statute to a music album. “The secret and exclusive nature of the album is a large part of its intrinsic value,” Chen wrote. “There can be no serious debate that the value of the album … was largely based on its secret and exclusive nature.”
The judge acknowledged the legal novelty of the case, noting, “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.”
Once Upon a Time in Shaolin was recorded in secret by Wu-Tang Clan, pressed onto a single CD and encased in a hand-crafted silver and nickel box. It came with a strict clause barring public release until the year 2103. Shkreli bought the album in 2015 for $2 million, before he was dubbed the “Pharma Bro” for inflating the price of a life-saving AIDS medication.
After his 2017 conviction, Shkreli was ordered to forfeit the album to help satisfy a $7.4 million restitution order. PleasrDAO purchased it from the government for $4 million in 2021, then paid another $750,000 in 2024 to acquire full copyrights and related rights.
The group has since hosted private listening events and offered limited access to the music. But in June 2024, PleasrDAO filed suit after Shkreli hinted online that he might leak the tracks. They accused him of violating trade secret protections and breaching the terms of the forfeiture.
Chen dismissed the breach of forfeiture claim, ruling that only the government could enforce that agreement. But she allowed the trade secret and property return claims to continue.
Shkreli’s attorney, Edward Andrew Paltzik, said in a statement Friday, “Eliminating half of PleasrDAO’s case prior to discovery is a significant step forward in our effort to vindicate Mr. Shkreli, who we unequivocally believe engaged in absolutely zero wrongdoing.”
PleasrDAO’s lawyer Stephen Cooper responded, “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.”
Despite PleasrDAO’s attempts to keep the album under wraps, Shkreli admitted in court filings that he had shared the music years ago.
“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 wrote. “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.”
AllHipHop
