A federal judge ruled Thursday that "Pharma Bro" Martin Shkreli can be sued for allegedly copying and distributing Wu-Tang Clan's one-of-a-kind album "Once Upon a Time in Shaolin," handing a partial victory to the digital art collective that owns the exclusive recording.
U.S. District Judge Pamela Chen allowed PleasrDAO to move forward with trade secret misappropriation and property recovery claims against the former pharmaceutical executive in a 32-page decision, while dismissing other allegations on copyright preemption grounds.
PleasrDAO’s lawsuit alleges Shkreli retained digital copies of the album after forfeiting it in 2018 to partially satisfy a $7.36 million judgment from his securities fraud conviction, then repeatedly played tracks for online audiences and offered to distribute files to social media users.
They won a temporary restraining order in June of last year, which immediately barred Shkreli from using, disseminating, or streaming the album.
Judge Chen wrote Thursday that Shkreli "unlawfully retained and distributed copies" of the album. The ruling allows PleasrDAO to pursue damages, profits, and return of any copies Shkreli still possesses.
Ishita Sharma, managing partner at Fathom Legal, told Decrypt the ruling is “remarkable because the court treated an unreleased hip-hop album as a potential trade secret—something usually reserved for recipes or corporate know-how."
Sharma said the ruling also signaled that cultural assets built on “secrecy and exclusivity” can find protection under trade-secret law and trim away claims overlapping with copyright, while reminding DAOs they are in “uncharted, but very real legal territory.”
Wu-Tang Clan recorded the 31-track album between 2007 and 2013 as "a protest to what they saw as the devaluation of music in the digital era," producing only one physical copy, accompanied by a 174-page leather-bound manuscript with lyrics and production notes.
The Original Purchase Agreement from 2015 gave Shkreli 50% of the copyrights but bound him to 88-year usage restrictions.
Following Shkreli's conviction, the court entered a forfeiture order requiring him to surrender the album and barring him from "taking any action that would have the effect of diminishing, damaging and/or dissipating" the asset or actions that would "affect the availability, marketability or value" of it.
The U.S. Marshals Service sold the album in July 2021 for over $2 million. PleasrDAO acquired the physical asset and exclusive playback rights, then purchased the copyrights in January 2024 for approximately $750,000.
PleasrDAO sued in June 2024 after Shkreli allegedly admitted in livestreams to copying the album and playing it for followers. When a PleasrDAO member posted a photo of the album on X, Shkreli responded, "LOL I have the mp3s you moron,” per the lawsuit.
Shkreli filed a motion to dismiss in January, saying Wu-Tang members Robert "RZA" Diggs and producer Tarik "Cilvaringz" Azzougarh should be joined as parties since they "maintain a property interest in the copyrights.”
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