Runlayer sues Rippling over alleged MCP gateway clone

Runlayer has filed a lawsuit against HR software startup Rippling, alleging that Rippling copied confidential information during an extended product trial to build a competing Model Context Protocol gateway.

According to the complaint seen by TechCrunch, the trial included the sharing of Runlayer’s product roadmap and source code. The parties had signed a mutual non-disclosure agreement, and Rippling also signed a product trial agreement that barred copying Runlayer’s intellectual property or making derivative works.

Runlayer says Rippling’s evaluation involved “nearly a year of intensive engineering collaboration.” The company says the trial ended after the two sides could not agree on a price.

Runlayer alleges that shortly after the trial ended, a “Rippling insider” told founder and CEO Andrew Berman that Rippling had started “a project internally to build essentially a clone o[f] Runlayer … it’s almost a 1 to 1 copy of Runlayer.” Runlayer says Rippling’s product must have been based on its intellectual property and therefore amounts to trade secret misappropriation, unfair competition, and breach of contract.

Rippling confirmed to TechCrunch that it is launching its own MCP gateway, but a spokesperson denied Runlayer’s allegations. The spokesperson said, “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.”

Runlayer has retained Sullivan & Cromwell. The article notes that this does not mean Runlayer will win the case, but that a prominent law firm can add credibility to a lawsuit.

The dispute also highlights how difficult it can be to sell complex AI infrastructure to enterprise customers, especially other tech companies with the engineering capacity to build the product themselves. Enterprise sales can take a long time because they often depend on deep, hands-on trials.

MCP gateways are becoming more crowded. Anthropic launched MCP as an open source protocol in November 2024. MCP gateway products add control, security, and other features for managing agents, and the field has become more competitive since Runlayer launched its product in the middle of last year and raised a total of $42 million, including from Khosla Ventures and Felicis.

Even after an intense trial, an enterprise may simply choose to build the tool in-house. The article says both sides are left stuck between a rock and a hard place.