Jury in Florida Federal Court Awards Kipu $19.5 Million, Finding Zencharts and its Principals Liable for Unfair Competition and Breach of Contract

MIAMI, FLORIDA, November 4, 2019Today a federal jury in Miami found ZenCharts and other defendants liable for breaching a contract with KipuHealth, an electronic medical records company, and also found that ZenCharts unfairly competed with Kipu in connection with Kipu’s proprietary electronic medical records system known as the “KipuEMR.”  These findings came after 9 days of trial, during which time the jury heard testimony and viewed access logs and emails indicating that certain defendants provided access to the KipuEMR system to a team of Bulgarian web developers, affiliated with ZenCharts, who used that KipuEMR access to create ZenCharts’ derivative EMR system.  The jury was also shown side by side comparisons of the two systems, some of which showed that portions of the ZenCharts EMR were directly copied from the KipuEMR.

“While we regret having to enter into litigation—the first in our company’s history—we are very pleased with the outcome of this trial,” said Kipu CEO Jeffrey Fiorentino.  “We want to thank the jury for carefully considering the evidence and verifying that the magic we have built into Kipu is unique.  A software platform of Kipu’s depth, based on years of investment in agile development, cannot be easily replicated.”

Fiorentino went on to say, “With the overwhelming evidence in this case, we simply had no choice but to protect our technologies on behalf of our employees, our clients, and the patients that they serve every day.

“Most importantly, we understand that this ruling may cause some concern for current ZenCharts clients. Please be assured, Kipu will endeavor to work with ZenCharts representatives to the extent that this verdict could result in a disruption to service.”

“At trial, we showed that the defendants pretended they were a legitimate customer, asked numerous technical questions, and obtained 'super administrator' access to the program in order to study and misappropriate Kipu’s workflows and proprietary technologies—all to further their ultimate goal:  creating a competing EMR system that they didn’t have the resources to develop,” said Christopher B. Spuches, Kipu’s trial counsel.

The KipuEMR is the most widely used e-records system for addiction treatment centers, handling all levels of care including detoxification, residential treatment, partial hospitalization programs, and intensive outpatient programs.

KipuHealth is represented by Christopher B. Spuches and Jason Martorella of Agentis PLLC and Javier J. Rodriguez of Saul Ewing Arnstein & Lehr.