What Can a Wu-Tang Clan Album Teach Us About Artists’ Rights Management?

Remember when the Wu-Tang Clan auctioned the one-of-a-kind album Once Upon a Time in Shaolin?  You may also remember that the auction buyer was none other than Martin Shkreli, a so-called “pharma bro” who was later convicted of securities fraud and sentenced to seven years in prison.  In connection with his sentencing, the U.S. government obtained a $7.36 million forfeiture judgment against Shkreli and seized the album from him.

Recently, the U.S. government sold the album at auction to an anonymous buyer for an undisclosed sum of money.  While the terms of the sale have been kept confidential, according to a press release issued by the federal prosecutors, the proceeds of the sale satisfied the remaining balance Shkreli owed to the government under the forfeiture judgment. 

According to news reporting, the undisclosed buyer is bound by the restrictions in the original sales contract, which contained an 88-year prohibition on the commercial release of the album. Could it be that the recording artists/producer, or individuals or entities close to them, purchased the album? If so, that would definitely merit another blog post on this work!

Take-Away Points

What can artists learn from this saga?  Obviously, when an artist decides to sell an artwork at public auction, the artist has no control over who the buyer will be, and it can always come to pass that a buyer will later fall into disrepute, be convicted, have assets seized, and other fill-in-the-blank unfortunate events, casting uncertainty onto the future of an artwork.  An artist should think carefully about the sales channel into which the artist places her work and the manner in which the work is marketed and sold.  Moreover, while the terms of the Wu-Tang Clan album sale are themselves unique, artists should carefully consider whether to convey any copyright interest or license in the unique piece being sold (typically copyright is reserved to the artist when a physical work is sold), whether to retain any artist proof of the work, and whether to place any contractual restrictions on the buyer in connection with the sale.

As to managing an artist’s legacy, artist studios and estates can actively monitor upcoming sales of works, by setting up Google alerts, monitoring auction sales, and otherwise keeping track of the market.  Where feasible and desirable, they may want to consider acquiring their important works either directly or with the assistance of trusted collaborators when the works surface for resale.  Artists can also endeavor to maintain provenance records for their works, by requesting information from the galleries with which they work where feasible, and through independent research.