Digital freight forwarding giant Flexport has filed a lawsuit against Freightmate AI for infringement, claiming that former Flexport employees conspired to form a competing company, Freightmate AI. Flexport accuses the former employees, who now lead the logistics software company, of stealing tens of thousands of sensitive business documents from Flexport.

The lawsuit, which is reportedly 23 pages long, was recently filed with the U.S. District Court for the Northern District of California. The complaint alleges that Freightmate AI founders Jason Zhao and Bryan Lacaillade established their company based on “openly stolen information and documents” from Flexport.

According to their LinkedIn profiles, Jason Zhao was formerly Flexport's Chief Technical Project Manager, and Lacaillade was the company's Director of Product Management. Lacaillade left Flexport in April 2024, and Jason Zhao followed a month later.

Flexport's lawsuit claims that months before their departure, the two secretly conspired to establish a stealth competitor.

The lawsuit states, “Lacaillade left Flexport first and began the company's operations, while Jason Zhao stayed on as a 'plant' to steal tens of thousands of sensitive business documents containing Flexport’s trade secrets. Zhao downloaded hundreds, sometimes thousands, of files daily to a personal USB drive or cloud storage and used technology to cover his tracks.”

The complaint also states that just days before Zhao left Flexport, he and Lacaillade became co-founders of Freightmate and subsequently downloaded the proprietary Flexport Platform source code.

"Within weeks, Freightmate launched a competing product," the complaint reads. "Freightmate then boasted that the 'number of collaborations with freight forwarders is more than three times what [it] initially expected,' a result that would have been nearly impossible to achieve so quickly without the stolen information from Flexport."

Flexport claims that Zhao and Lacaillade admitted to obtaining confidential files without permission. "They acknowledged using Flexport's documents to understand how generative AI digitizes freight documents. They admitted to keeping a full backup of Zhao's Flexport laptop, downloading Flexport data onto personal USB drives, and transferring files to personal cloud storage. However, the defendants did not fully cooperate with Flexport. They refused to allow an inspection of Freightmate's source code to determine how much of it was derived from Flexport’s proprietary information and falsely claimed that Flexport’s confidential files 'were inadvertently retained and were never accessed or used by Freightmate.'"

The lawsuit claims that Freightmate AI still illegally holds Flexport's intellectual property.

Flexport has sued Freightmate AI, Zhao, and Lacaillade for misappropriating trade secrets and copyright infringement. The company has also sued the two for breach of contract.

Flexport is asking the court to recover its property, award unspecified punitive damages, and issue an injunction prohibiting Freightmate AI from using or disclosing Flexport’s proprietary information.

U.S. District Judge Rita Lin was assigned to preside over the case on Monday, after Freightmate AI declined to have the case handled by a magistrate judge last Friday.

In June 2024, Freightmate AI came out of "stealth mode." The company announced in late January that it had raised $5 million in investment to build its freight forwarder management system.

Flexport told media via email that it could not comment on the ongoing litigation.

A spokesperson for Freightmate AI stated via email: “We dispute Flexport’s claims and intend to vigorously defend ourselves in court.”