The legal battle highlights the risks inherent in selling complex AI infrastructure to large tech companies. Runlayer, which has raised $42 million from backers including Khosla Ventures and Felicis, claims that an internal source at Rippling alerted its CEO, Andrew Berman, to the project, describing the new tool as a one-to-one copy of their proprietary software. The suit, filed with the help of law firm Sullivan & Cromwell, accuses Rippling of trade secret misappropriation, unfair competition, and breach of contract.
In section Startups & Technology
Runlayer Sues Rippling Over Alleged MCP Gateway Theft
During a year-long product trial, Runlayer shared its roadmap and source code with Rippling under a strict non-disclosure agreement. Now, the AI infrastructure startup has filed a lawsuit, alleging that Rippling exploited that access to build a near-identical clone of its Model Context Protocol gateway after price negotiations failed.
Rippling has confirmed the launch of its own MCP gateway but vehemently denies the accusations. A company spokesperson dismissed the litigation as a desperate response to business failure, asserting that their product relies solely on their own proprietary information. The outcome of this case may set a precedent for how startups navigate the delicate balance between intensive enterprise trials and the threat of being out-engineered by their prospective clients.
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