The DOJ Now Has The One Of A Kind Wu Tang Album; But Don't Expect Jeff Sessions To Release The Album
from the not-how-it-works dept
Well, well, well. At the end of last year we wrote about the weird series of events that could possibly lead to the DOJ getting possession of a one-of-a-kind Wu Tang Clan album called Once Upon a Time in Shaolin. The short version: in 2014 Wu Tang decided to experiment with a different kind of business model: selling a single copy of an album to the highest bidder. Nearly two years later, just as the entire world was learning to absolutely loathe a pharma man-child named Martin Shkreli, it came out that Shkreli was the guy who forked over $2 million or so for the album.
Since then Shkreli has been arrested, and things haven’t gone well for him. As you may have heard, a week or so ago, the court ruled that Shkreli caused a loss of $10.4 million for investors. And, yesterday, Judge Kiyo Matsumoto further ruled on the DOJ’s asset forfeiture request, granting the request to seize a bunch of Shkreli assets… including Once Upon a Time in Shaolin. The order of forfeiture specifically lays out the following assets:
(a) $5 million in cash that is currently held in an E*Trade brokerage account ending in the digits ?0258? as security for the defendant?s bond, pursuant to orders of the Court dated January 7, 2016, August 24, 2016 and October 19, 2017;
(b) Vyera Pharmaceuticals (formerly known as Turing Pharmaceuticals);
(c) the album ?Once Upon A Time in Shaolin? by the Wu Tang Clan;
(d) the album ?Tha Carter V? by Lil Wayne; and
(e) a Picasso painting.
Of course, don’t think that this means that Jeff Sessions will now be releasing the album. I’m guessing he’s not a huge fan of Wu Tang Clan, first of all. But, more importantly, it’s likely that the DOJ will simply try to sell the album to get the cash value — which will make for one hell of an interesting asset auction. But… it also means that some other rich dude might buy the album and keep it all to himself as well. Or, alternatively, someone else might try to buy it and release it. As Sarah Jeong wrote years ago (predicting all of this), it’s still not clear what contractual obligations there are or if Wu Tang Clan retains the copyright:
The weird thing is that it’s not clear what happens to the contract that Shkreli signed when he bought the album. Presumably, the contract allowed him to transfer his limited distribution rights if he ever sold the physical record to another person. But what happens if the record gets seized by the federal government as part of a criminal forfeiture?
Let’s say the government seizes the record, sells it on GSA Auctions, and then I buy it and upload the whole thing onto the internet. If Shkreli had uploaded the whole album for free, Wu-Tang couldn’t sue him?as per the terms of the contract. But if I do it, there’s no contract preventing Wu-Tang from suing me, even though I’m now the rightful owner of the One True New Wu-Tang Album.
That is, unless the government manages to successfully seize Shkreli’s intellectual property rights in the Wu-Tang album.
But, as per the order, the forfeiture order appears to only cover the physical album and not the associated copyright.