Runlayer Sues Rippling Over Alleged MCP Gateway IP Theft, Highlighting Enterprise AI Trial Risks

Runlayer, a startup that sells a secure Model Context Protocol (MCP) gateway, has filed a lawsuit against HR software giant Rippling, alleging trade secret misappropriation, unfair competition, and breach of contract. The complaint, seen by TechCrunch, describes a nearly year-long product trial in which Rippling acted as a prospective customer, gaining access to Runlayer's roadmap, source code, and other proprietary information under a mutual NDA and a product trial agreement that explicitly forbade copying or derivative works.

According to the suit, after the trial ended without a pricing agreement, a "Rippling insider" texted Runlayer's CEO Andrew Berman to alert him of an internal project to build "essentially a clone" of Runlayer, "almost a 1 to 1 copy." Rippling has confirmed it is launching its own MCP gateway but denies any misuse of Runlayer's IP, calling the lawsuit a "panicked effort to avoid competition."

This case is a cautionary tale for developers and startups selling AI infrastructure into the enterprise. The MCP ecosystem is getting crowded: Anthropic open-sourced MCP in November 2024, and gateways that add control, security, and governance are increasingly critical for production AI agents. With big players like Rippling entering the space, smaller vendors face the dual threat of long, expensive sales cycles and the risk that a prospective customer will simply build in-house — possibly using ideas gleaned during deep technical evaluations.

For developers, the takeaway is pragmatic: when you open your code and roadmap to a potential customer, you're betting on trust and legal protections. Runlayer's decision to hire Sullivan & Cromwell, a top-tier law firm, suggests they're serious, but the outcome is far from certain. As the MCP gateway market heats up, the line between competitive intelligence and IP theft will be tested in court — and the results could shape how AI infrastructure trials are conducted industry-wide.