Runlayer sues Rippling over MCP gateway trial

Runlayer says it handed a prospective customer its roadmap and source code under contract—and ended up suing when that customer announced a competing product. According to TechCrunch, the startup has filed a lawsuit against HR software company Rippling over a Model Context Protocol (MCP) “gateway,” a security-and-control layer that helps AI agents connect to outside data and tools. The complaint describes a product trial that ran for months and involved what Runlayer characterizes as deep engineering collaboration.

MCP itself is not proprietary. Anthropic open-sourced the protocol in late 2024, and it has since become a basic interoperability layer for AI agents that need controlled access to internal systems, APIs, and data sources. The commercial fight is over the “gateway” products built around it: the software that enterprises buy when they want audit trails, access controls, and centralized management rather than a pile of bespoke integrations. That market has the usual enterprise gravity—long evaluations, heavy hand-holding, and a customer base that routinely asks vendors to reveal how the product works before deciding whether to pay.

Runlayer’s lawsuit sketches the sharp edge of that sales process. It alleges that Rippling signed both a mutual non-disclosure agreement and a trial agreement that, according to Runlayer, barred copying or derivative works. During the evaluation, Runlayer says it shared not only plans but “actual source code.” The companies then failed to agree on price, and Runlayer ended the trial. Shortly afterward, Runlayer says, a Rippling insider texted Runlayer founder and CEO Andrew Berman about an internal project to build a clone—described in the text as close to a “1 to 1” copy.

Rippling confirmed to TechCrunch that it is launching its own MCP gateway, while denying that it misused Runlayer’s intellectual property. A spokesperson called Runlayer’s claims fabrication meant to avoid competition, and said Rippling built a superior product using only its own information.

The case lands in a market where “build vs buy” is not a slogan but a procurement tactic. A vendor’s most valuable asset—how it actually implements security, control, and integration—often has to be demonstrated in detail to close a deal. Meanwhile, large software companies can afford to treat a year-long trial as paid research, because the cost of internal engineering is spread across a broad product suite and an existing customer base.

Runlayer has retained Sullivan & Cromwell and says it is pursuing claims including trade secret misappropriation, unfair competition, and breach of contract. The complaint’s most concrete allegation is also the simplest: a trial that ended over price was followed by a product announcement from the trial customer.