Runlayer sues Rippling over alleged copy of MCP gateway

A year-long product trial turned contentious after Runlayer says Rippling copied its MCP gateway, raising fresh risks for AI infrastructure startups. Runlayer, a startup that offers a secure gateway for the Model Context Protocol (MCP) – a standard for the safe use of external data and tools by AI models and agents – has filed a lawsuit against the HR software startup Rippling, according to TechCrunch, citing the complaint. This case serves as a warning to companies selling AI infrastructure to enterprise clients, including other tech companies that are increasingly able to develop similar solutions in-house. In the lawsuit, Runlayer describes a lengthy product evaluation Rippling conducted as a potential client: during the assessment, Runlayer shared the product roadmap and source code. The parties signed a mutual nondisclosure agreement, and Rippling signed a trial agreement with a prohibition on copying Runlayer's intellectual property or creating derivative works. According to the complaint, the evaluation lasted 'almost a year of intensive engineering collaboration.' However, the parties did not agree on price, after which the trial period was terminated. Lawsuit Context and the Parties' Positions an in-house project that effectively clones Runlayer… this is almost a complete copy of Runlayer – Runlayer's lawsuit Runlayer contends that the complaint materials point 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 the accusations of using Runlayer's intellectual property. Runlayer's panicked moves to avoid competition by fabricating claims are not an effective way to solve their business problems. Rippling is launching a more sophisticated product to connect AI tools to business data, using only our own information – we have every reason to win in this market – Rippling spokesperson, TechCrunch Runlayer has enlisted the prestigious law firm Sullivan & Cromwell. While that adds some heft to the lawsuit, it does not guarantee victory in court. In the broader MCP gateway market context, competition is increasing: Anthropic launched MCP as an open protocol in November 2024, and it is now one of the foundational building blocks of AI interoperability, enabling models and agents to safely interact with external data and services. MCP gateway products add control and security, particularly for managing agents, and the sector has become much more competitive following Runlayer's launch last year and the $42 million investment from Khosla Ventures and Felicis. Even after intensive testing, an enterprise may decide to build the tool in-house. Consequently, the market underscores the difficulties of selling complex AI infrastructure in corporate environments.