The founder of MCP Runlayer accuses Rippling of stealing its brand idea

Runlayer, a startup that provides a secure gateway to the Model Context Protocol — a standard for allowing AI models and agents to securely pull data from external tools — has filed a lawsuit against HR software startup Rippling, according to a complaint seen by TechCrunch.

The case is a cautionary tale for anyone selling AI infrastructure to business customers, especially some tech companies, which increasingly have the engineering muscle to build this stuff themselves.

In that decision, Runlayer describes an extensive product trial run by Rippling as a potential customer, in which the MCP startup shared everything from its product roadmap to its original source code. The parties have signed a nondisclosure agreement and Rippling has signed a product testing agreement with a clause that prevents it from copying Runlayer’s intellectual property or making derivative works, which is common boilerplate in enterprise software testing.

Runlayer says in the complaint that Rippling’s testing involved “nearly a year of intensive engineering collaboration.” But in the end, the two couldn’t agree on a price, so Runlayer ended the product trial.

Soon after, Runlayer says a “Rippling insider” sent Runlayer founder and CEO Andrew Berman a message informing him of an “internal project to build a clone o.[f] Runlayer … almost a 1 to 1 copy of Runlayer.”

Runlayer alleges in the lawsuit that Rippling’s product was allegedly based on the startup’s intellectual property and therefore constitutes misappropriation of confidential money, unfair competition, and breach of contract.

Rippling confirmed to TechCrunch that it is indeed launching its own MCP gateway, although a spokesperson denied Runlayer’s allegations of misusing its IP.

“Runlayer’s panicked attempt to avoid competition by making claims is not an effective way to deal with its business failure. Rippling is introducing the best product to connect AI tools with business data using only our proprietary knowledge – we have many reasons to win in this market,” a Rippling spokesperson told TechCrunch.

Runlayer has retained white-shoe law firm Sullivan & Cromwell. That doesn’t mean Runlayer will, or should, win this suit, but in the same way that a tent VC lends a startup some credibility, a tent law firm lends the lawsuit some credibility, at least visually.

The most interesting part about this suite is the inside look it gives at the trials and tribulations of selling AI infrastructure to the enterprise, especially to other technology companies. Business sales notoriously take a long time to close, often because they depend on this type of intensive, hands-on effort.

MCP gates in particular are filling up. Anthropic launched MCP as an open source protocol in November 2024. It is now one of the foundations for building AI collaboration, providing models and agents with a secure way to access external data sources and services. MCP gateway products add control, security, and other features, especially for managing agents, and the sector has grown more competitive since Runlayer launched its product in the middle of last year and raised a total of $42 million in funding, including Khosla Ventures and Felicis.

Even after intensive testing, the company may choose to build the tool in-house. Both sides are stuck between the rock and the hard surface.