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MCP startup Runlayer accuses Rippling of stealing its product idea

13 d ago

Runlayer, a startup providing a secure Model Context Protocol (MCP) gateway for AI models and agents, has filed a lawsuit against HR software company Rippling, alleging trade secret misappropriation, unfair competition, and breach of contract after an extensive product trial. The suit, seen by TechCrunch, highlights the risks of selling AI infrastructure to enterprise customers—especially tech companies that may choose to build internally. According to the complaint, Runlayer shared its product roadmap and source code during a nearly year-long trial under a mutual non-disclosure agreement and a product trial agreement prohibiting copying or derivative works. After Runlayer ended the trial due to pricing disagreements, a Rippling insider allegedly texted Runlayer CEO Andrew Berman about an internal project to build “essentially a clone” of Runlayer. Runlayer claims Rippling’s product must have used its intellectual property. Rippling confirmed it is launching its own MCP gateway but denied the allegations. A spokesperson said Runlayer’s claims are “fabricated” and that Rippling’s product uses only proprietary information. Runlayer has retained law firm Sullivan & Cromwell. The case offers a rare inside look at enterprise AI sales challenges. MCP, launched by Anthropic as an open-source protocol in November 2024, is a key building block for AI interoperability. MCP gateway products add security and control, and the space has grown competitive since Runlayer launched mid-2024 and raised $42 million from Khosla Ventures and Felicis. Even after deep trials, enterprises may opt to build in-house, leaving both vendors and customers in a difficult position.