A federal judge has ordered Martin Shkreli, the controversial former pharmaceutical executive, to personally testify about whether he copied and distributed Wu-Tang Clan's ultra-rare album Once Upon a Time in Shaolin. The order, issued by Judge Pamela K. Chen of the Eastern District of New York, comes as part of a lawsuit filed against Shkreli by PleasrDAO, a collective that purchased the album from federal authorities after Shkreli forfeited it following his conviction for securities fraud.

The judge's ruling requires Shkreli to appear in court next month to clarify what happened to the album's tracks. The legal proceedings revolve around allegations that Shkreli might have copied and shared the exclusive album with others, violating both a federal forfeiture order and trade secrets law.

Shkreli, who first purchased the one-of-a-kind Wu-Tang album in 2015 for $2 million, was forced to forfeit it to help pay his restitution after his 2017 fraud conviction. In 2021, PleasrDAO acquired the album for $4 million from the federal government and later secured full copyrights for an additional $750,000, maintaining the album's unique, exclusive status.

However, recent developments have called that exclusivity into question. PleasrDAO's lawsuit, filed in June 2024, accuses Shkreli of threatening to release the album publicly, which would violate the terms of their purchase and the legal stipulations that originally came with the album. Shkreli, in prior statements, has said that while he owned the album, he created private copies and shared the music with others through social media.

Although Shkreli claimed in a sworn statement that he had searched all his devices and turned over any remaining copies, he admitted that he couldn’t fully account for who else might still possess copies, saying that he likely shared it with various people over the years. This vague disclosure, which Shkreli provided in September, raised concerns from PleasrDAO's attorneys, who argued that his statements fell short of the judge's earlier demands for full transparency.

In response, Judge Chen scheduled the upcoming hearing and stated that Shkreli must testify under oath to address the incomplete nature of his previous disclosures.

This case highlights the legal complexities surrounding the ownership and distribution of Once Upon a Time in Shaolin, a singular album wrapped in legal stipulations preventing its release to the public until 2103. Created in secret by Wu-Tang Clan, the album was sold with strict terms regarding its use and dissemination, making Shkreli’s alleged actions the center of this legal battle.

In the ongoing lawsuit involving Martin Shkreli and the rare Wu-Tang Clan album Once Upon a Time in Shaolin, federal trade secret laws are particularly relevant due to the unique nature of the album's legal stipulations and ownership rights. The lawsuit accuses Shkreli of violating the Defend Trade Secrets Act (DTSA), a federal statute that protects confidential and proprietary information, including trade secrets, from unauthorized use or disclosure.

Under the DTSA, a trade secret is defined as proprietary information that derives independent economic value from not being generally known to or readily accessible by others who could obtain economic value from its disclosure or use. In this case, Once Upon a Time in Shaolin qualifies as such because of its rarity, the exclusivity of its release, and the explicit contractual terms limiting its distribution until 2103. The album's value is tied to its secretive nature and the restrictions on public access, making any unauthorized reproduction or sharing of the album a potential violation of trade secret protections.

Shkreli allegedly copied and shared portions of the album, undermining the exclusivity that was part of PleasrDAO's acquisition. By creating unauthorized copies and threatening to release the album publicly, Shkreli is accused of "misappropriation" under the DTSA, which refers to the improper acquisition, disclosure, or use of a trade secret. Even after forfeiting the physical album to satisfy his restitution requirements, Shkreli may have retained digital copies, further complicating the case.

Federal trade secret laws provide remedies for the unauthorized use or distribution of protected information, including injunctive relief and monetary damages. In this case, PleasrDAO is seeking to prevent further unauthorized distribution of the album through court-ordered injunctions, as well as compensation for any financial harm caused by Shkreli’s actions. The court has already granted a preliminary injunction, which obliges Shkreli to hand over all copies of the album, a step towards protecting the trade secret status of the album.

Ultimately, the DTSA is central to this case because it allows the album’s current owners to safeguard the exclusive rights they purchased, ensuring the album remains a confidential and protected asset in line with the original sales agreement.

Shkreli, who rose to infamy for his controversial pharmaceutical practices, now faces potential legal repercussions for his handling of the album. PleasrDAO has expressed concerns that Shkreli’s actions have jeopardized the uniqueness of their $4 million investment.

The upcoming hearing will determine whether Shkreli’s actions violated any laws regarding the album's distribution and whether he still retains unauthorized copies. The court will also address questions about his compliance with federal trade secrets law.