Flexport Alleges Freightmate AI Founders Stole and Used Its Trade Secrets to Build Company
Meghan Hall
4 min read
Flexport knows the business of parcel imports and exports. But now, it has taken issue with a different kind of export—data and documents.
In a California lawsuit, the freight forwarder alleges that two of its former employees, Yingwei (Jason) Zhao and Bryan Lacaillade, used Flexport’s trade secrets and copyrighted code to develop their own freight forwarding company, Freightmate AI, illegally.
The company alleges that Zhao, Lacaillade and, consequently, Freightmate, committed trade secret misappropriation under California law, infringed its source code copyrights and breached their contracts with Flexport.
That’s because, Flexport alleges, Zhao stole its data and proprietary information, making copies of the documents and storing them on personal devices to use later to develop Freightmate, and, as a byproduct, “to compete unfairly with Flexport using stolen Flexport intellectual property.”
For that reason, Flexport argues that Freightmate is “a product of theft, not ingenuity,” because it was “built on information and documents brazenly stolen from Flexport.”
“Flexport welcomes fair competition, even from former employees. But the actions of Freightmate and its founders were anything but fair—they were unlawful,” counsel for the company notes in the complaint.
Flexport alleges that, for the systems at issue—its core product and its Flexport Forwarding App (FFA)—it has spent “many millions” on development and has spent years developing the technology behind the systems, and that Zhao’s alleged theft and use of the code and data behind those systems damaged its reputation and caused it financial harm.
The company states in its complaint that it requires “promises of non-disclosure and non-misuse before disclosing any confidential information” and goes on to say that, for its proprietary data, it “allows access on only a ‘need-to-know’ basis, while adopting the ‘least privileged’ approach, which means that access is denied by default, absent a showing of need.”
Because Zhao and Lacaillade both worked on the development of FFA and other Flexport systems, Zhao purportedly had access to a slew of documents detailing the inner workings of such technology, and allegedly “saved to his personal storage without authorization over 70,000 confidential Flexport documents, which he later used to build Freightmate with Lacaillade.
Flexport further contends that Zhao and Lacaillade “did not dispute that Zhao downloaded Flexport documents prior to his departure from Flexport,” but noted that “defendants contested that any Flexport source code was exfiltrated and refused to allow any review of Freightmate’s source code.”
According to Flexport, Zhao and Lacaillade contend that they did not begin developing Freightmate until after their respective departures from Flexport. They allegedly began developing the technology underneath the company on June 7, 2024.
Flexport believes that the company’s subsequent product launch, which it states occurred on June 27, 2024, was “an incredible feat that Flexport believes and therefore alleges would not have been possible without the benefit and use of Flexport intellectual property.”
But, even if Freightmate didn’t use Flexport data as part of the process of building its technology, Flexport still takes issue with other ways Zhao and Lacaillade allegedly used the information, stating that they “conspired to take and took these materials to avoid the costs involved in researching and developing expertise and experience in the complex global logistics ecosystem, [and] to freeride off Flexport’s years of developing and refining strategies for expanding and promoting its business.”
“Defendants…admitted that, before developing Freightmate’s products, they secretly ran confidential Flexport documents ‘through ChatGPT to better understand how generative AI digitizes analog shipping documents.’ Defendants had no authorization to use Flexport’s proprietary information for their own benefit or to disclose it to third parties in this manner,” Flexport states.
And, according to Flexport, Zhao and Lacaillade still have its data and proprietary information in storage.
To that end, the company seeks preliminary and permanent injunctions which would prevent Freightmate, Zhao and Lacaillade from “possessing, using or disclosing Flexport’s trade secret” and from “altering or deleting Flexport’s trade secrets before returning them. If granted, such an injunction would also require the defendants to “turn over to Flexport any and all copies of Flexport’s trade secret, including any products or information derived therefrom.”
Flexport has also asked a judge to enjoin the defendants from violating its copyrights and seeks monetary damages in an amount to be determined based on lost profits and unjust enrichment.
A Flexport spokesperson told Sourcing Journal via email that it does not comment on active litigation.
A spokesperson for Freightmate said the company plans to continue the battle with Flexport.
“We dispute Flexport’s claims and intend to vigorously defend ourselves in court,” the spokesperson told Sourcing Journal via email.
