Musical Trade Secrets: Wu-Tang Case Enters “Uncharted Territory”

PleasrDAO v. Shkreli, 24-CV-4126 (E.D.N.Y. Sept. 25, 2025)

Summary:
A recent decision in the Eastern District of New York examined the plausibility of trade secret claims centered on the world’s most exclusive hip-hop album: Wu-Tang Clan’s Once Upon a Time in Shaolin. Stressing the “unique facts” of the case, and acknowledging the “uncharted” nature of musical works in trade-secret law, U.S. District Court Judge Pamela K. Chen ruled a plaintiff has plausibly alleged the album’s trade-secret worthiness.

Background:

In 2015, notorious “Pharma Bro” Martin Shkreli purchased the world’s most expensive musical work—Wu-Tang Clan’s album Once Upon a Time in Shaolin. In a move designed to protest the devaluation of music in the digital age, Wu-Tang had pressed only a single physical copy for release as an exclusive boxed-set. The exclusive boxed set came with extravagant details, including custom artwork by British Moroccan artist Yahya, a gold-leafed certificate of authenticity, custom audio speakers, and a 174-page manuscript containing lyrics, credits, and anecdotes on the album’s production and recording of each song.

Shkreli purchased the album for a staggering $2 million, receiving a 50% copyright interest, though in doing so entered an agreement restricting the album’s use for a term of 88 years. Specifically, the agreement proscribed using or replicating the album for any commercial purpose and even most non-commercial purposes, though permitting Shkreli to exhibit the album for smaller groups in non-commercial settings (i.e., “such as [Shkreli]’s home, museums, art galleries, restaurants, bars, exhibition spaces, or other similar spaces not customarily used as venues for large musical concerts”).

Fast forward to 2017, and Shkreli’s well-covered convictions for securities fraud. After his sentencing and entry of a forfeiture order, the federal government seized Shkreli’s interest in Once Upon a Time in Shaolin and eventually sold it to PleasrDAO, a cryptocurrency collective engaged in the collection of digital art and cultural artifacts. PleasrDAO promptly sued Shkreli in the Eastern District of New York, leveling claims for his alleged retention and use of the album. Specifically, PleasrDAO alleged that Shkreli had played copies of the album’s musical works on live internet streams, redistributed copies for third parties, and boasted on social media and podcasts of sharing the works with thousands of people and hiding copies in “safes around the world.”

The legal twist? PleasrDAO asserted claims of trade secret misappropriation under the DTSA and New York law—alleging the album itself was a trade secret. Over Shkreli’s motion to dismiss, and in an apparent first for a musical work, Judge Chen agreed that PleasrDAO had plausibly alleged the album was deserving of trade-secret protection. Applying the Second Circuit’s Integrated Cash factors, Judge Chen agreed that allegations concerning the album’s confidential nature, strict contractual restrictions governing its use, and the elaborate security measures PleasrDAO has taken (armed guards, secure transport, video surveillance) to protect it support a plausible case for trade secret protection. The album’s staggering price—$2 million to Shkreli, $4 million to PleasrDAO—further bolstered an inference of the album’s independent economic value—event though it “does not fit squarely within a category of business information or data that is traditionally protectable as trade secrets.”

Faced with other decisions in which courts had declined to treat unreleased songs as trade secrets—including works by Prince and Janet Jackson—Judge found PleasrDAO’s “unique” business model it be a key distinguishing feature creating a plausible inference of a competitive economic advantage from the album’s secrecy—i.e.,  the “ability to exploit its exclusivity to create an ‘experience’ that its competitors cannot.”

Practice Note:
Although a potentially unique case, the court’s willingness to apply trade-secret protection to a guarded musical work invites artists and IP owners to think creatively about the commercialization of their works. Through limited access and distribution, taking reasonable measures to preserve confidentiality and security, and packaging their works as an exclusive experience, IP owners may leverage a lucrative revenue source with the potential to preserve the benefit of trade-secret protection—a protection otherwise forfeited by a release to the general public.