Runlayer sues Rippling over alleged IP theft in MCP gateway dispute
The case shows how long enterprise AI trials can reveal confidential IP and fuel copycat competition in the growing MCP gateway market.
At a glance
- Runlayer alleges Rippling copied its MCP gateway IP after a nearly year-long product trial that included access to Runlayer's roadmap and source code.
- Both sides signed a mutual NDA and a product trial agreement barring IP copying; Runlayer says price negotiations ended the trial.
- Rippling confirmed it is launching its own MCP gateway and denied Runlayer's misappropriation claims.
- Runlayer has engaged Sullivan Cromwell; Runlayer previously raised about $42 million from investors including Khosla Ventures and Felicis.
The story
Runlayer, a startup that offers a secure Model Context Protocol gateway for AI models and agents, has filed a lawsuit against HR software company Rippling, the complaint seen by TechCrunch shows. The suit paints a cautionary tale for enterprises buying AI infrastructure, noting how extensive trials can expose intellectual property.
The complaint describes nearly a year of engineering collaboration during a product trial, conducted under a mutual non-disclosure agreement and a trial agreement that included a clause forbidding copying Runlayer’s IP. The two parties could not agree on a price, which contributed to ending the trial on terms unfavorable to Runlayer.
Runlayer alleges that an internal Rippling message indicated a project to build essentially a clone of Runlayer, describing it as “almost a 1 to 1 copy of Runlayer.” The claim is that Rippling’s evaluation involved confidential information that should have remained protected by the NDA and trial agreement.
Rippling confirmed it is launching its own MCP gateway and told TechCrunch that it denies Runlayer’s misappropriation claims. A Rippling spokesperson said the company is building a gateway “for connecting AI tools to business data using only our proprietary information – we have every reason to win in this market.” The company also said it takes IP protection seriously.
Runlayer has retained the white-shoe law firm Sullivan Cromwell, adding to the visibility of the case. The broader enterprise AI market for MCP gateways has been crowded since Anthropic opened MCP as an open-source protocol in 2024, and Runlayer had raised a total of about $42 million from investors including Khosla Ventures and Felicis prior to the dispute.
The suit is described as shedding light on the challenges of selling complex AI infrastructure into the enterprise, where long, hands-on trials often determine whether a product wins or loses in a competitive market.