Flexport lawsuit accuses Freightmate AI of copyright infringement

“Lacaillade left Flexport first to commence the company’s operations, while Zhao remained behind as a secret agent, to exfiltrate tens of thousands of sensitive commercial documents containing Flexport’s trade secrets,” Flexport stated in its complaint. “Zhao downloaded hundreds, sometimes thousands, of files per day onto personal USB drives or cloud storage, employing techniques to hide his tracks.”

The complaint alleges that days before Zhao left Flexport, he was established as Freightmate’s co-founder with Lacaillade and then downloaded its proprietary Flexport Platform source code.

“Within weeks, Freightmate launched a competing product,” the complaint stated. “Freightmate then boasted about ‘partnering with over three times the number of freight forwarders that [it] anticipated by this time,’ a feat virtually impossible to achieve so quickly without Flexport’s stolen information.”

Flexport stated Zhao and Lacaillade admitted to taking confidential documents without permission.

“They confessed to using Flexport documents to understand how generative AI digitizes shipping documents,” the complaint continued. “They admitted to retaining a complete backup of Zhao’s Flexport laptop, downloading Flexport data onto personal USB storage, and transferring files to a personal cloud. But Defendants were not fully forthright with Flexport. They refused to allow any review of Freightmate source code to determine the extent to which it is derived from Flexport’s proprietary information, claiming falsely that Flexport’s confidential files ‘were inadvertently retained and not accessed or used by Freightmate.’”

The complaint stated that Freightmate AI still illegally has Flexport’s intellectual property.

Flexport is suing Freightmate AI, Zhao and Lacaillade for trade secret misappropriation and copyright infringement. It is also suing Zhao and Lacaillade for breach of contract. 

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

U.S. District Court Judge Rita Lin was assigned on Monday to preside over the case after Freightmate AI declined on Friday to have the case seen before a magistrate judge.

Freightmate AI left stealth mode in June 2024. In late January, the company announced it had raised $5 million in investments to build its freight forwarding management system.

Flexport told FreightWaves via email it could not comment on ongoing litigation.

“We dispute Flexport’s claims and intend to vigorously defend ourselves in court,” a spokesperson for Freightmate AI told FreightWaves via email.