Runlayer sues Rippling over alleged theft of MCP gateway product idea
MCP startup Runlayer has filed a lawsuit against HR software company Rippling, claiming that after a year-long trial, Rippling copied its product instead of licensing it.
Runlayer, a startup offering a secure Model Context Protocol (MCP) gateway that allows AI models and agents to safely access external data and tools, has filed a lawsuit against HR software company Rippling, according to a complaint reviewed by TechCrunch.
The lawsuit details an extensive product trial conducted by Rippling as a prospective customer. During the trial, Runlayer shared everything from its product roadmap to actual source code. Both parties signed a mutual non-disclosure agreement, and Rippling also signed a product trial agreement containing a standard clause prohibiting copying or creating derivative works from Runlayer's intellectual property.
Runlayer claims the evaluation involved “nearly a year of intensive engineering collaboration.” However, the two companies could not agree on a price, leading Runlayer to terminate the trial. Shortly after, Runlayer alleges a “Rippling insider” texted its founder and CEO, Andrew Berman, informing him of a project to build essentially a clone of Runlayer – “almost a 1 to 1 copy.”
In its suit, Runlayer asserts that Rippling's product must have been based on its intellectual property, constituting trade secret misappropriation, unfair competition, and breach of contract. Rippling confirmed to TechCrunch that it is indeed launching its own MCP gateway but denied the allegations.
“Runlayer's panicked effort to avoid competition by fabricating claims is not an effective way to deal with its business failures. Rippling is launching a superior product for connecting AI tools to business data using only our proprietary information — we have every reason to win in this market,” a Rippling spokesperson said.
Runlayer has retained the prestigious law firm Sullivan & Cromwell. While this does not guarantee a win, it lends credibility to the suit, similar to how a top-tier VC lends credibility to a startup.
The case offers a revealing look at the challenges of selling complex AI infrastructure to enterprises, especially other tech companies. Enterprise sales often take a long time due to deep, hands-on trials.
The MCP gateway space is becoming crowded. Anthropic released MCP as an open-source protocol in November 2024, and it is now a fundamental building block for AI interoperability. Runlayer launched its product in mid-2025 and raised $42 million from investors including Khosla Ventures and Felicis.
Even after an intensive trial, enterprises may choose to build in-house instead. Both sides are in a difficult position.
