Runlayer, a startup building a secure Model Context Protocol (MCP) gateway, has filed a lawsuit against HR software company Rippling, alleging that Rippling copied its product after an extensive, year-long product trial. The complaint, seen by TechCrunch, describes a mutual NDA and a product trial agreement with a standard clause forbidding copying or derivative works. Runlayer claims that Rippling‘s evaluation involved deep engineering collaboration, including access to Runlayer‘s roadmap and source code. After the two failed to agree on pricing and Runlayer ended the trial, Runlayer alleges a Rippling insider texted its CEO to inform him of an internal project to clone Runlayer essentially one-to-one. Runlayer‘s suit asserts trade secret misappropriation, unfair competition, and breach of contract. Rippling confirmed it is launching its own MCP gateway but denied using Runlayer‘s IP, calling the lawsuit a panicked attempt to avoid competition. Rippling claims its product is built solely on proprietary information. Runlayer has retained law firm Sullivan & Cromwell, lending optical credibility to the suit.

The article frames the lawsuit as a cautionary tale for AI infrastructure startups selling to enterprise customers, especially other tech companies that may have the engineering capability to build in-house instead of buying. It highlights the inherent tension in enterprise sales: deep trials give prospects intimate knowledge but also risk IP exposure. MCP gateways, which add control and security to Anthropic’s open-source MCP protocol for connecting AI models and agents to external data, have become a crowded market since Runlayer launched in mid-2024 and raised $42 million from Khosla Ventures and Felicis. Even after a thorough trial, an enterprise may decide to build its own tool, leaving the vendor in a difficult position. The suit provides a rare inside look at the perils of selling complex AI infrastructure, particularly when the prospective customer is itself a well-resourced tech company.