The members of PleasrDAO are, well, pretty displeased with Martin Shkreli.
The “digital autonomous organization” spent $4.75 million to buy the fabled Wu-Tang Clan album Once Upon a Time in Shaolin, which had only been produced as a single copy. The album had once belonged to Shkreli, who purchased it directly from Wu-Tang Clan for $2 million in 2015. But after Shkreli became the “pharma bro” poster boy for price gouging in the drug sector, he ended up in severe legal trouble and served a seven-year prison sentence for securities fraud.
He also had to pay a $7.4 million penalty in that case, and the government seized and then sold Once Upon a Time in Shaolin to help pay the bill.
The album was truly “one of a kind,” a protest against the devaluation of music in the digital age and the kind of fascinating curio that instantly made its owners into “interesting people.” The album came as a two-CD set inside a nickel and silver box inscribed with the Wu-Tang logo, and the full package included a pair of customized audio speakers and a 174-page leather book featuring lyrics and “anecdotes on the production.
In a complicated transaction, PleasrDAO purchased the album from an unnamed intermediary, who had first purchased it from the government. As part of that deal, PleasrDAO created a non-fungible token (NFT—remember those?) to show ownership of the album. The New York Times has a good description of what this entailed:
To tie “Once Upon a Time” to the digital realm, an NFT was created to stand as the ownership deed for the physical album, said Peter Scoolidge, a lawyer who specializes in cryptocurrency and NFT deals and was involved in the transaction. The 74 members of PleasrDAO… share collective ownership of the NFT deed, and thus own the album.
Makin’ copies…
But after purchasing the album and sharing the collective ownership of its NFT, PleasrDAO discovered that its “one of a kind” object wasn’t quite as exclusive as it had thought.
Shkreli had, in fact, made copies of the music. Lots of copies. On June 30, 2022, PleasrDAO said that Shkreli played music from the album on his YouTube channel and stated, “Of course I made MP3 copies, they’re like hidden in safes all around the world… I’m not stupid. I don’t buy something for two million dollars just so I can keep one copy.”
Shkreli began taunting PleasrDAO members about the album, telling one of them, “I literally play it on my discord all the time, you’re an idiot” and claiming that PleasrDAO was concerned about an album that “>5000 people have.” Shkreli claimed on a 2024 podcast that he had “burned the album and sent it to like, 50 different chicks”—and that this had been extremely good for his sex life.
Shkreli even offered to send copies of the album to random Internet commenters if they would just send him their “email addy.” He also told people to “look out for a torrent” and hosted listening parties for the album on his X account, which reached “potentially over 4,900 listeners.”
We know all of these details because PleasrDAO has sued Shkreli, claiming that he is acting in violation of the asset forfeiture order and that he is misappropriating “trade secrets” under New York law.
Shkreli “knew that by distributing copies of the Album’s data and files or by playing it publicly, his actions would decrease the Album’s marketability and value,” said PleasrDAO. They have asked a federal judge to stop Shkreli—and also to get them a list of everyone he has distributed the album to.
Not a secret
Shkreli’s response to all this is, in essence, “so what’s the problem?”
When he purchased the album for $2 million in 2015, he also acquired 50 percent of the copyrights to the package. Before the album was seized by the government, Shkreli says he took advantage of his copyright ownership to make copies as he was “permitted to do under his original purchase agreement.” The government, he says, seized only the individual, physical copy of the album, and Shkreli was within his rights to retain the copies he had already made.
As for trade secrets, well—a trade secret actually has to be “secret.” Thanks to his own actions, Shkreli has made sure that the album is not a secret. “Because Defendant legally purchased and shared the work before the Forfeiture Order and the Asset Purchase Agreement, the work is no longer a trade secret,” his lawyers wrote in his defense.
The Empire State strikes back
On August 26, 2024, a federal judge in Brooklyn issued a preliminary injunction (PDF) in the case as the two parties prepare to battle things out in court. The injunction prevents Shkreli from “possessing, using, disseminating, or selling any interest in the Wu-Tang Clan album ‘Once Upon a Time in Shaolin’ (the ‘Album’), including its data and files or the contents of the Album.”
Furthermore, Shkreli has to turn over “all of his copies, in any form, of the Album or its contents to defense counsel.” He also must file an affidavit swearing that he “no longer possesses any copies, in any form, of the Album or its contents.”
By the end of September 2024, Shkreli further must submit a list of “the names and contact information of the individuals to whom he distributed the data and files” and say if he made any money for doing so.
