News / Flexport-Freightmate legal battle over document access heats up

© Titiwoot Weerawong

Despite being ordered by a judge to resolve issues over discovery, Flexport and start-up Freightmate.ai continue to argue over access to documents. 

Flexport is suing the AI-focused company, founded by two ex-Flexporters, for “brazenly” stealing trade secrets and data. 

The unresolved issue before the judge is whether Flexport can access the personal computers of all Freightmate staff. 

“Freightmate has a legal right to obtain documents from employees’ so-called ‘personal’ devices through IP Assignment Agreements, which provide that Freightmate owns “all . . . work associated with the business idea for which the company has been formed,” ” claimed Flexport. 

Freightmate has argued that it “has no right to materials from the personal devices/sources of its small group of international contractors”, mostly based in India. 

Flexport claimed: “Freightmate has multiple employees/agents, including outside the US, most of whom are not defendants in this lawsuit. It is unreasonable to require Flexport to independently subpoena each relevant agent (or seek discovery through the Hague process) when Freightmate could (and should) simply exercise its legal right to obtain and produce responsive documents from its agents.” 

 Co-founders Yingwei (Jason) Zhao, who left Flexport in May joined in June 2021 from Amazon, and Bryan Lacaillade left Flexport in April, where he was director of product management. 

Flexport claimed this month: “While still on Flexport’s payroll, Lacaillade and Zhao secretly built Freightmate products by accessing, using, and making unauthorised copies of Flexport’s confidential files. They downloaded over 70,000 files from Flexport’s secure repositories, including a massive file called ‘flexport-master.zip’, which contained nonpublic, trade secret, and copyrighted source code pertaining to Flexport’s flagship products.  

“Within weeks of leaving Flexport, defendants launched a competing product and then began destroying evidence of their malfeasance. They claim to have deleted the stolen data in batches over time, but evidence produced to date only shows that they deleted ~4,000 of the ~70,000 stolen files. Notably, the source code “flexport-master.zip” is not among the deleted files, and Freightmate has yet to provide discovery about when or how any deleted files were used (or copied elsewhere) before the alleged deletion.

“As a trade secret plaintiff, Flexport is entitled to learn how its stolen data was handled, including which devices may have been used to access, transmit or store the stole data. But Freightmate refuses to answer basic discovery about the devices it used to access, transmit and store Flexport’s files, while also withholding documents that should have been produced months ago.” 

For its part, Freightmate argued: “So why all the rigamarole, when Flexport can simply get these materials from the owners of the sources/locations? Because Flexport hopes to leverage a cursory argument packed into a short discovery letter brief, into an important merits victory: a ruling that freightmate (supposedly) has possession, custody or control of whatever Flexport materials Mr Zhao downloaded onto his personal devices.

“In other words, Flexport – which is alleging that Freightmate should face liability for alleged copying of Flexport documents by one of the individual defendants onto his personal (not Freightmate) devices—wants this court to deem his documents, Freightmate’s documents. The court should decline.”