Freightmate AI has settled a trade secrets lawsuit filed by San Francisco-based freight forwarder Flexport on terms that will keep the Bellevue, Wash.-based logistics software startup’s products on the market.
“We’re glad to have this resolved,” said Bryan Lacaillade, Freightmate’s CEO and co-founder. “I’m incredibly grateful to our team, customers, and partners for their support throughout this journey, and we’re excited about what’s ahead for Freightmate.”
The case raised a question that could become more common as employees leave big companies to start AI ventures: whether everyday business documents count as valuable trade secrets when they can be fed into AI models.
Confidential Documents and AI Testing
Lacaillade and fellow co-founder Jason Zhao, both former Flexport employees, acknowledged in a stipulated court judgment that they and the company acquired approximately 2,000 confidential Flexport shipping documents and used some portion of them. They denied Flexport’s claim that Freightmate’s product was built using these documents, and the court made no finding of liability.
The documents included bills of lading, arrival notices, and other paperwork from approximately 70 Flexport shipments. Court filings revealed that Lacaillade and another co-founder, Rishab Gadroo, tested OpenAI’s GPT-4o model by running five to 10 documents through it in 2024 to assess its ability to extract standard information.
Flexport argued in court filings that the use went further, saying the documents helped shape the prompts Freightmate wrote for its AI system, giving the startup a head start. Freightmate countered that its product was developed independently and that the documents were not trade secrets.
Settlement Terms and Financial Details
The companies notified the court of the settlement on October 5, avoiding a jury trial scheduled for October 19 in U.S. District Court in San Francisco. Financial terms were not disclosed, but Flexport’s claims for monetary damages were resolved in a confidential agreement. Each side will cover its own legal fees.
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“We’re satisfied with this result,” said Courtney Heger, Flexport’s vice president and head of marketing and communications. She noted that the judgment includes key admissions backed by a detailed forensic review conducted during the case. The findings of this review were not made public.
Settlement Impact on Product Sales and Legal Claims
Flexport had sought a court order that could have barred Freightmate from selling its main product for a period of time. Financial terms remain confidential, with each party covering its own legal fees.
Company Background and Future Steps
Lacaillade and Zhao joined Flexport from Amazon in 2021 and left in 2024 to start Freightmate, which came out of stealth that June with a $650,000 pre-seed round from Wischoff Ventures. The company emerged from stealth in June 2024 with a $650,000 pre-seed round from Wischoff Ventures and raised a $5 million seed round led by Fuse in January 2025.
Freightmate employs 17 people and sells AI-powered freight forwarding software, along with tools that handle customs paperwork and invoices. Its customers include major freight forwarding and logistics companies.
As part of the settlement, Zhao acknowledged acquiring Flexport confidential information, including trade secrets. Both founders agreed they knew or should have known that acquiring the shipping documents violated their agreements with Flexport.
Lacaillade emphasized that Freightmate and its founders deny liability and that the stipulated facts were agreed to solely for resolving the case. The judgment preserves Freightmate’s right to compete and independently develop its software.
A neutral forensic examiner will search Freightmate’s systems and cloud storage for Flexport documents. If any are found, the examiner will oversee their deletion and any necessary product changes. Lacaillade stated that Freightmate is fully cooperating with the review, which is expected to conclude by January 30, 2027.