SAN FRANCISCO — Runlayer, an artificial intelligence infrastructure startup, filed a lawsuit against HR software company Rippling, accusing it of trade secret misappropriation, unfair competition and breach of contract. The complaint alleges Rippling developed a direct copy of Runlayer's Model Context Protocol gateway following an extensive product trial.
The dispute began when Rippling evaluated Runlayer's MCP gateway as a prospective customer. During that period, which lasted nearly a year, Runlayer shared its product roadmap and source code with Rippling. Both companies signed a mutual non-disclosure agreement and a product trial agreement that prohibited Rippling from copying Runlayer's intellectual property or creating derivative works.
Runlayer claims the evaluation involved intensive engineering collaboration. The two companies ultimately could not agree on a price, and Runlayer ended the trial without a deal.
Shortly after the trial concluded, Runlayer alleges a Rippling insider texted Runlayer founder and CEO Andrew Berman to inform him of an internal project to build a product that was "almost a 1 to 1 copy of Runlayer."
Rippling confirmed it is launching its own MCP gateway. A Rippling spokesperson denied the allegations. "Runlayer's panicked effort to avoid competition by fabricating claims is not an effective way to deal with its business failures," the spokesperson said. "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."
The case exposes a structural risk in enterprise AI sales: closing deals often requires deep, hands-on product trials, which can put intellectual property in front of prospective buyers who have the engineering capacity to build competing products themselves.
Model Context Protocol gateways are becoming a foundational component for AI interoperability, allowing AI models and agents to securely access external data sources and services. Anthropic launched MCP as an open-source protocol in Nov. 2024. Commercial vendors, including Runlayer, compete by layering control, security and specialized features on top of that open standard — a market that is growing crowded.
Runlayer has retained Sullivan & Cromwell as legal counsel. The startup is seeking an injunction to prevent Rippling from using the disputed technology, as well as monetary damages for the alleged intellectual property violations and breach of contract.
