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, in a statement. “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.

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. But they denied Flexport’s claim that Freightmate’s product was built on them, and the court ultimately made no finding of liability.

The documents included bills of lading, arrival notices and other paperwork from about 70 Flexport shipments. Court filings show that Lacaillade and another co-founder, Rishab Gadroo, each ran five to 10 of the documents through OpenAI’s GPT-4o model in 2024 to test how well it could pull out 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 responded in its own filings that it built its product independently, and that the documents weren’t trade secrets in the first place.

The companies notified the court of the settlement Oct. 5. The case had been set for a jury trial starting Oct. 19 in U.S. District Court in San Francisco before Judge Rita Lin.

Financial terms of the settlement weren’t disclosed. The judgment says Flexport’s claims for monetary damages were resolved in a confidential agreement, and each side will cover its own legal fees as part of the resolution. Flexport had sought a court order that could have barred Freightmate from selling its main product for a period of time.

“We’re satisfied with this result,” said Courtney Heger, Flexport’s vice president and head of marketing and communications, responding to GeekWire’s email inquiry. She said the judgment includes key admissions that were backed up by a detailed forensic review conducted during the case. That review’s findings weren’t made public.

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. It raised a $5 million seed round led by Fuse in January 2025.

Freightmate has 17 employees, Lacaillade said in a follow-up email. The company sells AI-powered freight forwarding software, along with add-on tools that pull data from shipping documents and handle customs paperwork and invoices. Its customers include some of the world’s largest freight forwarding and logistics companies.

Flexport sued in March 2025, alleging that the founders secretly planned the startup while still at the company, as GeekWire reported at the time.

As part of the stipulated judgment, Zhao acknowledged that he acquired Flexport confidential information, including trade secrets, and both founders agreed that they knew or should have known that acquiring the shipping documents violated their agreements with Flexport.

They didn’t admit Flexport’s other allegations. Lacaillade said in an email that the stipulated facts “were agreed to as part of resolving the case” and only for purposes of the lawsuit.

He underscored that Freightmate and its founders deny liability, that nothing else in the judgment is an admission, and that it preserves Freightmate’s right to compete and to independently develop and sell its software.

Going forward, the judgment calls for a neutral forensic examiner to search Freightmate’s systems and cloud storage for Flexport documents. If any exist, the examiner will oversee their deletion, along with any product changes needed to remove Flexport data. Lacaillade said Freightmate is cooperating fully with the review, which is due to be completed by Jan. 30, 2027.

The startup’s focus, Lacaillade said, is on its customers and on building the company.