Protecting Art Through Trade Secrets? Wu-Tang Clan Ruling Opens the Possibility

In a recent decision, a New York federal court refused to dismiss claims of trade secret misappropriation and ruled that, given its confidential and exclusive nature, Wu-Tang Clan’s single copy album—"Once Upon a Time in Shaolin”—could qualify as a trade secret under the Defend Trade Secrets Act and New York law.

On September 25, 2025, US District Court Judge Pamela K. Chen denied defendant Martin Shkreli’s motion to dismiss plaintiff PleasrDAO’s claims for misappropriation of trade secrets, finding that the album’s secrecy, limited duplication rights, and economic value derived from exclusivity were sufficiently alleged to meet the criteria for a trade secret.

“Once Upon a Time in Shaolin” is a single-copy album that members of Wu-Tang Clan recorded in secret over a six-year period. The group created the album as “a historically unique musical compilation” and as a protest to what they saw as “the devaluation of music in the digital era.”

In 2015, the producers sold the album to Martin Shkreli for $2 million, making it the most expensive musical work ever sold. The original sale contract of the album imposed an 88-year prohibition on commercial exploitation and strict usage restrictions to preserve the album’s secrecy and rarity. As part of the purchase, Shkreli obtained a physical copy of the album, along with a partial ownership interest in the album’s copyright and renewal copyright in the album’s recordings and musical compositions.

In July 2021, crypto-art collective PleasrDAO purchased the sole physical copy and associated rights at an auction for approximately $4 million. PleasrDAO alleges that after acquiring the album it undertook significant measures to maintain the album’s secrecy. The album was purportedly always kept in a secure location protected by armed security guards and was under continual video surveillance. However, according to PleasrDAO, Shkreli retained a digital copy of the album and publicly livestreamed portions of the album to thousands of listeners online.

In June 2024, PleasrDAO filed a complaint against Shkreli accusing him of, among other claims, misappropriation of trade secrets under the Defend Trade Secrets Act (DTSA) (18 USC §1836) and New York law.

ANALYSIS

Judge Chen’s ruling breaks new ground by recognizing that an artistic work can fall within the scope of trade secret protection. The DTSA broadly defines a “trade secret” to include “all forms and types of financial, business, scientific, technical, economic, or engineering information” that the owner has taken reasonable measures to keep secret and that derives independent economic value from its secrecy. The court found that given the album’s extreme secrecy and exclusivity, “Once Upon a Time in Shaolin” fits within this definition of trade secret.

In reaching its decision, the court considered PleasrDAO’s allegations related to the following:

• The extent the contents of the album were known inside and outside PleasrDAO’s business
• The measures taken to guard the album’s secrecy
• The value of the album to PleasrDAO and its competitors
• The ability to acquire or duplicate the album

The court suggested there could be little debate as to whether PleasrDAO alleged it had taken reasonable measures to maintain the album’s secrecy. The court next focused on the allegations regarding the economic value of the album, stating, “[t]hough the Court agrees with Plaintiff on this factor, it cannot be understated that the application of trade secret doctrine to the unique facts of this case is uncharted territory.”

Specifically, the court noted that the independent economic value of the album allegedly comes from PleasrDAO’s ability to exploit the album’s exclusivity and create an “experience” that its competitors cannot, rather than from commercial release or other traditional forms of music distribution. The court also noted that the perpetual restrictions on the album (i.e., an 88 year no-commercialization clause) were built into the album’s very concept. In other words, the album’s intrinsic value stems directly from the secret and exclusive nature of the album.

The court’s holding is in sharp contrast with other unreleased artistic works that courts have refused to treat as trade secrets. In prior cases involving the unreleased recordings by artists such as Prince and Janet Jackson, the recordings were found to lack independent economic value because “the only economic value of the recordings derives from the right to sell the recordings to the public,” so the plaintiffs could realize no economic value by maintaining the secrecy of the recordings.

TAKEAWAYS

While trade secrets have typically been limited to information such as customer lists, technical specifications, and proprietary software, Judge Chen’s ruling could have significant implications for owners of exclusive or non-traditional assets. While this decision merely addressed the sufficiency of the pleadings, and may be subject to later appellate review, the ruling opens the door for creative works and other artistic or one-of-a-kind materials to be treated as trade secrets.