Runlayer sues Rippling over MCP gateway intellectual property

Intellectual Property Dispute in AI Infrastructure Market

Runlayer, a startup offering secure API gateways for the Model Context Protocol (MCP), has initiated legal proceedings against Rippling, an HR and IT management software vendor, according to a complaint reviewed by TechCrunch AI. The filing centers on accusations that Rippling misappropriated confidential product design and engineering documentation shared during an unsuccessful enterprise sales negotiation.

According to TechCrunch AI, Runlayer founder and CEO Andrew Berman alleges that Rippling gained access to his company’s roadmap and codebase throughout roughly twelve months of joint technical evaluation. Both organizations executed a mutual confidentiality agreement, and Rippling additionally consented to a product trial addendum explicitly prohibiting derivative works and unauthorized replication of intellectual property—language standard in enterprise software evaluation deals.

The Triggering Event

The complaint identifies a message received by Berman from an internal Rippling contact, which allegedly described the company’s initiative to build what he characterized as “a 1 to 1 copy” of Runlayer’s offering. Runlayer’s legal argument rests on three claims: misappropriation of trade secrets, tortious interference, and breach of contract.

Rippling issued a statement to TechCrunch AI pushing back on these allegations. A company representative contended that Runlayer’s lawsuit reflects “panicked effort to avoid competition” and asserted that Rippling’s MCP gateway represents “a superior product” developed “using only our proprietary information.” The HR software vendor expressed confidence in its legal position.

The case has attracted representation from Sullivan & Cromwell, a prominent white-shoe law firm, lending procedural weight to the action—though, as TechCrunch AI notes, counsel prestige does not guarantee trial outcomes.

Why This Matters

This dispute exposes structural vulnerabilities in AI infrastructure sales cycles, particularly when selling to engineering-capable enterprise buyers. Organizations with in-house development teams can evaluate products deeply, extract architectural insights, and—once cost-sharing negotiations stall—internalize the design themselves. MCP gateways occupy an increasingly crowded niche following Anthropic’s November 2024 open-source launch of the protocol standard. For early-stage vendors in this space, the lawsuit signals a cautionary precedent: enterprise trials demand clearer boundaries and enforceable safeguards, or the trial itself becomes competitive intelligence gathering. The outcome will likely influence how AI infrastructure companies structure their evaluation agreements going forward.