PleasrDAO v. Shkreli Provides a Roadmap to Protect Artistic Works Through Trade Secret Protection

Not every trade secret case involves a company that acquires culturally significant digital and physical assets to create interactive, community-driven experiences across the United States, a “tech-bro” who was sentenced to seven years in prison for securities fraud, a hip-hop group famous for hits like C.R.E.A.M., the most expensive musical work ever sold, and novel legal issues.

Indeed, most trade secret cases involve far more mundane disputes, such as customer lists, manufacturing processes, or employment agreements between competing businesses. However, a district court in PleasrDAO v. Shkreli found that, at the pleading stage, the only copy of Wu-Tang Clan’s album Once Upon a Time in Shaolin (the “Album”) can constitute a trade secret. While a unique application of trade secret law, it does illustrate that trade secret protection can be extended to almost any type of information, including artistic and creative works.

Background

Much of the underlying facts of this case have been widely and extensively reported in the mainstream press and concern the purchase in 2015 by Martin Shkreli of the only copy of the Album from the Wu-Tang Clan for $2 million. The purchase agreement entitled Shkreli to a share of any profits from the use of the Album, but for a period of 88 years Shkreli was permitted to “duplicate or replicate the Work for private use,” but not to “duplicate, replicate, and/or exploit the Work for any commercial or other non-commercial purposes” other than certain limited uses.

In 2017, a jury convicted Shkreli of securities fraud and conspiracy and sentenced him to seven years in prison and ordered him to forfeit almost $7.4 million in profits earned from hiking the price of a life-saving antiparasitic drug. The forfeiture order required Shkreli to turn over certain assets, including the Album. It also required him to preserve and maintain the assets. In July 2021, PleasrDAO purchased “the physical asset and exclusive right to play the audio tracks” for $4 million, and in 2024, it purchased the copyrights to the Album for an additional $750,000.

Because PleasrDAO was concerned that Shkreli was violating the terms of the Operating Agreement (OPA) by playing the Album, including on YouTube and on other publicly available platforms, it sought a preliminary injunction enjoining Shkreli from possessing, using, disseminating, or selling any interest in the Album, and to turn over all copies of the Album to PleasrDAO, which the court granted in August 2024. PleasrDAO then filed the instant contempt proceeding against Shkreli, asserting that he had violated the terms of the injunction. In January, Shkreli filed a motion to dismiss the Complaint, which the court granted on September 25, 2025, with the exception of two counts for trade secret misappropriation under New York law and the Defend Trade Secrets Act (DTSA), and one alleging recovery of chattel/replevin. The court applied the identical analysis under the DTSA and New York trade secret law, finding that the elements for the misappropriation of trade secrets are “fundamentally the same” under both statutes.

The Album Can Be Protected as a Trade Secret at the Pleading Stage

At the outset of its trade secret analysis, the court noted that the Album “does not fit within a category of business information or data that is traditionally protectable as trade secrets, such as an internal customer list.” However, the court was not troubled by the unique nature of the claimed trade secret, finding that the Album could generally constitute the type of information protectable by the DTSA and New York law so long as the pleading adequately established the existence of a trade secret. This includes the extent to which it is known by employees and others involved in the business, the measures taken to guard the Album’s secrecy, the value of the Album to PleasrDAO and its competitors, and the ability to acquire or duplicate the Album.

Turning first to the issue of whether the Album was known to others in the industry, the court set aside plaintiff’s claims that he did not maintain the Album’s secrecy when it was in his possession, finding that it did not have to reach this issue at the pleading stage and must accept well-pleaded facts in the complaint as true. The court found that the complaint pled that the one copy of the Album had never been publicly released and was subject “to significant restrictions regarding the distribution under the OPA.” Thus, the court concluded that PleasrDAO had met this requirement.

Next, the court turned to the measures taken to guard the Album’s secrecy. According to the complaint, after purchasing the Album, PleasrDAO securely transported the Album and kept it in a “secure location,” which included “the use of armed security guards, secure entrance and exit points, and continual video surveillance, overnight and checks on the Album’s condition.”  The court concluded that these efforts constituted reasonable measures to guard the secrecy of the Album.

With regard to the value of the Album to plaintiff and its competitors, the court agreed with PleasrDAO that the Album “derived independent economic value, actual or potential, from not being generally known to . . . another person who can obtain economic value from the disclosure or use of the information” as required by the DTSA. According to the court, while “it cannot be understated that the application of trade secret doctrine to the unique facts of this case is uncharted territory,” there is no question that the Album “holds significant value to Plaintiff,” since, after all, it paid over $4 million for the Album.

Further, the court concluded that it is the secrecy of the Album that makes it valuable to PleasrDAO. Wu-Tang Clan only produced one copy of the Album, and the OPA set confidentiality usage restrictions for 88 years, including restrictions on duplicating, replicating, and exploiting the Album. PleasrDAO alleged that the OPA expresses the Producers’ intention to create only one copy of the Album “as a protest to what they saw as the devaluation of music in the digital era,” and “to keep ownership of the Album in one person’s hands at a time.” The court recognized that “the secret and exclusive nature of the Album is a large part of its intrinsic value.”

The court, however, recognized that several courts have not recognized trade secret protection of unreleased musical works. In particular, in Paisley Park Enters., Inc. v. Boxill, the court denied trade secret protection for five unreleased recordings of Prince songs because the “only economic value of the recordings derives from the right to sell the recordings to the public,” and thus the plaintiffs could not “realize any independent value by keeping the contents of the recordings secret.” Similarly, in Anderson v. Jackson, the court found that an unreleased Janet Jackson song was not a trade secret because among other reasons the “plaintiff failed to identify anything in or about the song that derived ‘independent economic value’ by virtue of its secrecy.”

The Wu Tang Clan court, while noting that the difference between these two cases and the instant case is only “a matter of degree,” found that plaintiff’s business model is unique and its “ability to exploit its exclusivity to create an ‘experience’ that competitors cannot, rather from a public commercial release or from traditional forms of music distribution that the courts in Paisley Park and Jackson seemingly considered.” The court determined that this is sufficient to “distinguish the Album from typical recorded musical works that might not otherwise be afforded trade secret protection.” This is consistent with the understanding that the type of information that may be a trade secret is virtually limitless.

The final factor considered by the court was “the ease or difficulty with which the information could be properly acquired or duplicated by others.” The court again found that the restrictions in the OPA were sufficient to satisfy this element, noting that the defendant “could only duplicate the work ‘private use’ and could only sell the Album to ‘a third party under the same terms and conditions’ as the OPA.” This distinguished this case from those cited by the defendant, where it was much easier for others to acquire the information.

Defendant asserted that he “did not maintain secrecy” when the Album was in his lawful possession. He claims that while the album was in his possession, he made copies of the Album and “they’re hidden in safes all around the world . . . I’m not stupid. I don’t buy anything for two million dollars just so I can keep one copy.” He also claimed that more than 5,000 people have heard the Album, offered to upload a copy in an email, and “sent it to like, 50 different chicks.” The court did not consider these claims because a court must accept the facts alleged in the complaint, which establish that the Album could be protected as a trade secret. However, it is axiomatic that once the information constituting a trade secret is no longer secret, it ceases to be a trade secret. Once the information that constitutes a trade secret is disclosed to others, the holder of the trade secret has lost the property interest in the information. Thus, should defendant’s claims be borne out in a summary judgment motion, for example, it seems unlikely that the Album would still be considered a trade secret. However, PleasrDAO may still have a claim against the defendant for damages.

Implications

Although the facts of this case are highly specific, it does open the door for owners of exclusive artistic assets to think creatively about how to use trade secret protections to create an additional layer of protection beyond copyright. For example, an owner of a website or the creator of a video game can provide access to the information to a limited number of people with prohibitions against disclosing or copying the information. Similarly, a filmmaker may be able to claim protection in an unreleased film or portion of the film until it has been officially released to the public. In short, the type of information that can be protected as a trade secret is virtually limitless.

Takeaway

PleasrDAO v. Shkreli expands trade secret protection into artistic works by recognizing that exclusivity-based business models can generate independent economic value from secrecy. However, trade secret status depends on maintaining actual secrecy; widespread distribution may destroy protection, regardless of contractual restrictions. Creative industries should consider whether their assets and business models support trade secret claims as a complementary measure to copyright protection and other forms of intellectual property protection.