Judge Allows PleasrDAO to Sue Shkreli Over Wu-Tang Album

U.S. District Judge Pamela Chen’s 32-page decision represents a landmark moment in intellectual property law, treating Wu-Tang Clan’s unreleased hip-hop album as a potential trade secret—a legal category traditionally reserved for corporate recipes and business know-how. The ruling allows PleasrDAO to pursue trade secret misappropriation and property recovery claims against former pharmaceutical executive Martin Shkreli, while dismissing other allegations including forfeiture, interference, and unjust enrichment on copyright preemption grounds. Judge Chen explicitly found that Shkreli ‘unlawfully retained and distributed copies’ of the exclusive recording.

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.’ Sharma emphasized that the decision signals cultural assets built on ‘secrecy and exclusivity’ can find protection under trade-secret law while trimming away claims overlapping with copyright. The ruling also serves as a reminder that DAOs like PleasrDAO are operating in ‘uncharted, but very real legal territory,’ highlighting the evolving intersection between decentralized organizations and traditional intellectual property frameworks.

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 2015 Original Purchase Agreement gave Shkreli 50% of the copyrights but bound him to 88-year usage restrictions, creating a unique asset whose value depended entirely on its exclusivity and controlled access.

Following Shkreli’s securities fraud 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. The U.S. Marshals Service sold the album in July 2021 for over $2 million, with PleasrDAO acquiring both the physical asset and exclusive playback rights. The digital art collective later purchased the copyrights in January 2024 for approximately $750,000, completing their control over the unique musical property.

PleasrDAO’s lawsuit alleges that 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. The complaint details how Shkreli repeatedly played tracks for online audiences and offered to distribute files to social media users. The legal action gained momentum after Shkreli allegedly admitted in livestreams to copying the album and playing it for followers, with the lawsuit citing his response to a PleasrDAO member’s photo of the album on X: ‘LOL I have the mp3s you moron.’

In January, Shkreli filed a motion to dismiss arguing that 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.’ Judge Chen’s ruling rejected this argument for the trade secret claims while allowing PleasrDAO to pursue damages, profits, and return of any copies Shkreli still possesses. The court had previously granted PleasrDAO a temporary restraining order in June of last year, which immediately barred Shkreli from using, disseminating, or streaming the album.

The case establishes important precedent for how digital art collectives and DAOs can protect their assets under existing legal frameworks. By recognizing the album’s value as deriving from its secrecy rather than just its creative content, Judge Chen’s ruling opens new avenues for protecting exclusive cultural properties that don’t fit neatly into traditional copyright protection. This is particularly significant for NFT communities and digital art collectors who often rely on scarcity and exclusivity to maintain asset value.

The ruling also underscores the legal complexities facing decentralized autonomous organizations as they navigate intellectual property disputes. PleasrDAO’s ability to pursue legal action as a collective entity against a high-profile defendant like Martin Shkreli demonstrates the evolving legal recognition of DAOs, while the court’s careful parsing of trade secret versus copyright claims shows how traditional legal doctrines are being adapted to protect digital and cultural assets in new economic paradigms.