K&L Gates Advises ZipBy in First Circuit Victory Affirming US$4.5 Million Judgment

Global law firm K&L Gates LLP represented ZipBy USA, Inc. in securing a significant appellate victory before the US Court of Appeals for the First Circuit, which affirmed a US$4.5 million damages and attorneys’ fees judgment of the US District Court for the District of Massachusetts. The First Circuit upheld the district court’s judgment which followed a 2023 jury verdict in favor of ZipBy on claims against its former CEO, Gregory Parzych. The judgment included damages for breach of fiduciary duty, breach of confidentiality, trademark infringement, and over US$2 million in attorneys’ fees.

The case arose from the CEO’s undisclosed attempt during COVID-19 lockdown to take for himself a corporate acquisition opportunity that belonged to ZipBy. Although the district court enjoined the CEO from proceeding with the acquisition, the seller ultimately withdrew from the transaction, which prevented ZipBy from completing the deal. The CEO’s conduct violated agreements with ZipBy regarding use of confidential information and breached his fiduciary duty to ZipBy, resulting in the damages awarded by the jury.

With the First Circuit affirming both the damages and fee award, the ruling represents a validation of ZipBy’s claims following years of litigation. The defendant’s assets remain frozen and are expected to satisfy much of the judgment.

The K&L Gates team was led by Boston partner John Cotter with assistance from associate Joshua Andrews.

“ZipBy is very pleased that the appeals court recognized the former CEO’s misuse of confidential information and upheld the US$1.5 million damages award for that violation and the award of attorneys’ fees,” Cotter said.