Runlayer Sues Rippling Over Alleged Copying of Its MCP Gateway

Runlayer has sued Rippling, alleging that the human-resources software company used information from an extended product evaluation to build a competing Model Context Protocol gateway. Rippling confirms it is developing its own gateway but denies using Runlayer's intellectual property.

Runlayer says the companies signed a mutual nondisclosure agreement and a trial contract that prohibited copying or derivative work. During nearly a year of engineering collaboration, the startup says it shared source code, product plans and technical details. The parties did not agree on commercial pricing, and Runlayer ended the trial.

The complaint says an internal source later warned Runlayer that Rippling was creating a near copy. Runlayer alleges trade-secret misappropriation, breach of contract and unfair competition. Rippling called the claims fabricated and said its product was built with proprietary information.

MCP gateways manage how AI models and agents connect to external data and tools. The category has become crowded since Anthropic released the protocol in 2024. Enterprise customers often demand deep evaluations before buying security infrastructure, which requires vendors to reveal enough for technical testing without giving away the product.

The lawsuit may influence how startups structure proofs of concept. Time limits, isolated test environments and staged disclosure can reduce exposure, while escrow or third-party audits can verify capability without handing over an entire codebase. Those protections add friction to sales, but the alleged alternative is a year of collaboration that ends with a new competitor.

The dispute is a warning for startups selling into larger companies that may also build adjacent products. A long evaluation can expose architecture, customer language and product strategy before a contract exists. Buyers still need enough access to test a claim, so complete secrecy is not practical. Clear evaluation terms should define permitted use, personnel access and what happens to prototypes after the trial. Courts may decide whether protected material was taken, but the commercial lesson is immediate: a startup should know which information proves value and which information gives away the method.

The case will depend on specific evidence, not the similarity of two products in a fast-growing category. It also offers a warning for startups: trials should limit source-code access, define permitted testing and preserve records of what was shared. Enterprise buyers need confidence to evaluate software, but a long sales process cannot become an unprotected transfer of the vendor's core work.